Obama pauses on economic plan
(REUTERS/Carlos Barria)
MIAMI -- As Wall Street and Main Street await details of the US government's massive mortgage bailout plan, Barack Obama announced this morning that he would wait on laying out his own proposed economic fix.
Obama, who is holding a confab shortly with his top economic advisers, reaffirmed broad principles he says any proposed solution must promote -- protections for homeowners and taxpayers, stricter government oversight for financial institutions, and cooperation with other leading industrialized nations. But despite hints yesterday that he would outline a sweeping economic plan this morning, Obama said that, after consulting with Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke, he would hold off.
"I have asked my economic team to refrain from presenting a more detailed blue-print of how an immediate plan might be structured until the Treasury and the Federal Reserve have had an opportunity to present their proposal," Obama said in a statement. "It is critical at this point that the markets and the public have confidence that their work will be unimpeded by partisan wrangling, and that leaders in both parties work in concert to solve the problem at hand."
So far this morning, we know that the Securities and Exchange Commission halted short-selling of some financial stocks and that the Federal Reserve will put up $50 billion to guarantee money market investments.
Obama did issue a statement laying out his broad principles and general support for the Fed-Treasury plan.
“The events of the last few days have made it clear that we must take further bold and decisive action to shore up confidence in our financial markets and avoid a deepening economic crisis that could jeopardize the life savings and well-being of millions of Americans. I support the effort of Secretary Paulson and Federal Reserve Chairman Bernanke to work in a bipartisan spirit with the Congressional leadership to find a systemic solution to our deepening crisis, and I will closely examine the specifics of their effort and the opportunities for swift action. As I review the emerging details of Fed-Treasury proposal with my top economic advisors this morning I will be guided by four basic principles:
“First, we cannot lose sight that we are in the midst of a broad economic crisis that also requires immediate action to create jobs and help support distressed homeowners and communities. For too long, this Administration has been willing to hit the fast forward button in helping distressed Wall Street firms while pressing pause when it comes to saving jobs or keeping families in their homes. Swift and unprecedented action to shore up Wall Street must come alongside equally swift and serious efforts to help struggling families on Main Street, create new jobs, and grow our middle-class once more.
“Second, any taxpayer-funded support must have as its focus protecting our nation's long-term interest in a stable financial market and a growing economy rather than rewarding particular companies or the imprudent decisions of borrowers or lenders. These extraordinary steps must be designed with only the public good in mind, not to enhance the personal gain of CEOs and management at taxpayers’ expense.
“Third, this plan must be temporary and coupled with tough new oversight and regulations of our financial institutions. There must be a clear process to wind down this plan and restore private sector assets into private sector hands after restoring stability to the system. Taxpayers must share in any upside benefit that such stability brings.
“Finally, this plan should be part of a globally coordinated effort with our partners in the G-20. We are facing a global financial crisis and the United States can take a leadership role in coordinating a global response to the present crisis, as well as greater regulatory cooperation and alignment to prevent future crises.
“As we move beyond immediate actions to stabilize financial markets, it is important that we build upon the ideas I have laid out over the last several years about how to modernize our financial regulation. Eliminating consumer protections and lax oversight contributed to the crisis we are in today, and establishing commonsense rules of the road for our financial system can help restore confidence in our financial system.
“Given the gravity of this situation, and based on conversations I have had with both Secretary Paulson and Chairman Bernanke, I have asked my economic team to refrain from presenting a more detailed blue-print of how an immediate plan might be structured until the Treasury and the Federal Reserve have had an opportunity to present their proposal. It is critical at this point that the markets and the public have confidence that their work will be unimpeded by partisan wrangling, and that leaders in both parties work in concert to solve the problem at hand.”
WHO IS ON OBAMA'S ECONOMIC TEAM?
It’s easy to blame the collapse of the two largest mortgage lending giants, Fannie Mae and Freddie Mac, on the consumer for chasing the American Dream and taking on more house than they could afford.
The Treasury Department has demanded the current CEO’s step down. Certainly those at the wheel have to bear some responsibility. But the pillaging was already in their rear view mirrors. Three of the main characters in this fiasco have strong ties to Barack Obama’s presidential campaign.
As Fannie Mae’s CEO (1999 to 2003), Franklin Raines pulled in over $90 Million, mostly in bonuses. He was sued by the SEC and OFHEO to recover $50 Million in bonuses due to Enron-like accounting practices overstating their earnings by $10.6 Billion. Franklin took “early retirement”, paid a hefty fine and forfeited stock options valued at $15.6 Million. He is now Obama’s economic advisor for housing policy.
Jamie Gorelick was vice-chairperson at Fannie. In 1998, she received a bonus of $779,625 amidst a scandal where signatures were falsified on accounting transactions to meet earning targets. She is a leading candidate for Attorney General if Obama is elected president.
Jim Johnson was Raines’ predecessor at Fannie. He resigned from Obama’s VP selection committee after revelations he accepted a sweetheart loan from Countrywide Financial while Fannie’s CEO. He remains as an Obama economic advisor.
As taxpayers, we are now liable for failures in a $5.2 Trillion loan portfolio to include $780 Billion in high-risk “Alt-A” and sub-prime loans. These are Friends of Barack we can ill afford!
In contrast, John McCain warned of the coming mortgage crisis as he pressed in 2005 for regulatory reform of Fannie Mae and Freddie Mac.
And Massachusetts, you’re not off the hook either. Your Representative Barney Frank (D-MA) is Fannie Mae’s patron saint and fought these reform attempts tooth and nail. In 2003, Frank rejected Bush administration and Congressional Republican efforts for the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis. Under the plan a new agency would have been created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. "These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis," Frank said. He added, "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." He remains blind to the whole fiasco!
The race is near the finishing line and gave up? I know John Mccain is running away with the gold.
RESIST -
Don't worry, as long as the pre-election polls show it's within 2-3 % pts between McCain and Obama (either way, doesn't matter) then it's a runaway for McCain on November 4th. The "Bradley Effect" will kick in at the polls on 11/4 and it will be McCain by anywhere from 5-10% pts for the win.
Mark my words. You may not agree with the racist overtones of this prediction but it will happen. Talk to you on November 5th.
Yes, Raines, John "I'm fundamentally a deregulator" McCain and "Get the government out of the way" Palin are surely the salve for this gaping economic wound. Amazing that the cognitive dissonance hasn't killed them yet.
McCain was the chair of the Commerce Committee. Looks like he showed some real leadership to head off this crisis. Anyone can "call for regulation", only those with real substance can actually get it done.
A McCain presidency is an economic nightmare.
He's going to wait to see what McCain is going to do first. Normal
"The original maverick" McSame was for deregulation for many years, and only now, when the deregulation chickens have come home to roost, is he finally against it. Sound like a "maverick?" Nope.
The economic meltdown we're watching happen before our eyes is a DIRECT result of all the policies of the republical president and congress. And who elected them? All of you republical tools who parroted out slogans like, "Deregulation!" "Less government!" And who could forget, "Let the market take its course!"
But rest assured you republical hypocrites and greed-mongers. You've nothing to fear. You're the majority in this unfortunate country. Most Americans are just as stupid as you are, with a collective memory of about six hours. Your group of spoiled children will get its way through lies and character assasination. My only wish is that the only children whose futures you steal to satisfy your own greed would be your own. Unfortunately, as I've seen too many times in the last thirty years, it'll be my child that pays the price as well.
Wait wait wait, McCain who has deregulated the markets for YEARS and this is Obamas fault.... Sucker please!
Yes, Obama has people working for him, but McCain cast of Lobbist and Crooked Economic Advisors is 10 times longer.
There is no scared cow in this race, lord know it sure is not McCain.
brilliant idea.. seriously isnt dat wat john mc.. should be doin... am a republican but sein wat john has been doin for the past few months .... it has really changed my mind ...from palin...not that i dont like her. nope.. but for tryin to make her look better.... just like the old republican's have done..then he also lies to the public wef his stupid ad's.... and now the ecomony this should be where he should say i stand out.. this is wat and wat i will do to help the most wonderful people in the world.. but wat does he do... nuffin but bring out noda ad.. sayin he's better... 4get it he has no clue nuffin.. and we want to vote for a man like dis...
come on America...
its better i vote for someone who know wat the people need not someone who thinks bein a war veteran makes him qualify for the white house..
sorry republican .... am for democrat this yr..
obama/biden... 08
aaahhhh.......hehemmm........ummmm.......my economic recovery plan is
.....aaahhhh......hahemmmm.......uuuuummmm.........go ask McCain.
I'm Barack Obama and I endorse this message.
Franklin Raines met Obama for about five minutes at an event they both attended. Raines has even gone on record that he is not nor has he been an adviser to the campaign.
Rick Davies, one of many of McCain's campaign workers, was a paid consultant to Fannie Mae/Freddie Mac at the tune of $30000 per month. McCain himself has pushed pushed deregulation in the financial market for some time now.
None is so blind as those who choose not to see!
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