Hello. Come on in. The daddy writes about current events, literature, music and, once in a while, drops something on you from back in the day to make you pause and ponder, stop and stare, and begin to wonder. Who knows? You may start to pace the floor, shake your head from side to side, then fall down on bended knees in a praying position and cry, "Lawd, have mercy! What is this world coming to?" Check yourself! But this blog is NOT about the daddy. It's about you: your boos, your fam, your hood, your country...our hopes and dreams of a better tomorrow. So let's make a pact: the daddy will put it on the track if you'll chase it down and hit him back. Together, we can definitely take it to another level. Shall we?"

Friday, October 10, 2008

The Financial Crisis-- Where's the New Deal?

"Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth...I pledge you, I pledge myself to a new deal for the American people...This is more than a political campaign. It is a call to arms."
-- Franklin Roosevelt, acceptance speech

The daddy is aware that economists have made many recommendations to the U.S. government to deal with this financial crisis. They've made some good ones: Guaranteeing bank deposits, guaranteeing lending among banks, injecting capital to under-capitalized banks. But will these moves keep the government from sliding into an deeper recession? Of course not.

Thinking of what will really provide confidence and inspire Americans to invest and reinvest in the American economy, the daddy has two basic questions:

1. What about specific steps to keep people in their homes? The daddy is talking about bailing out homeowners by the president signing an executive order, authorizing providing banks a certain amount of money to specifically address housing, including providing a short-term freeze on foreclosures of owner-occupied properties, giving bankruptcy judges authority to change mortgages for primary residences, and restructuring sub-prime loans under terms that are affordable to them.

2. What about specific moves to re-regulate the financial markets? The government has conceded that there were regulations that eliminated that made us more susceptible to a financial crisis. Why haven't they formed a committee to identify the regulations that were removed and made moves to reinstate them?

3. Beyond these moves, what about a plan that includes creating jobs for the poor and not just keeping jobs for criminals and criminal enablers on Wall Street? What about small businesses as well as huge corporations and global networks? What about infusing money into creating jobs such as working in parks and on the failing infrastructure in this country, i.e., what about a Rebuild America Package that would put money into the hands of all America, and not just a few people in banking? Where's our Roosevelt?

When Barack Obama becomes president, he will have many challenges. The financial crisis will be the most challenging of all. If he continues the Bush-Paulson top-down approach to the financial crisis, turning over monies to a small number people and institutions within the financial industry, he will likely fail middle and low-income America. On the other hand, if he comes up with a Roosevelt-like plan to rebuild America and maneuvers it through congress, he could be one of the U.S. greatest presidents since Roosevelt.

It will be up to us to push him to be our modern Roosevelt.


Anonymous said...

obama has the will and smarts to be our roosevelt. hell we don't even need a "new" roosevelt...the original policies and programs could serve us well

rainywalker said...

When the 700 billion runs out then we're going to get the New Deal. I really believe 100 ordinary Americans from around the country could have solved this problem by now. They are lucky the weekend is her or the market would drop another 1400 points.

Anonymous said...

If we had a bailout last week, it represents about 25% of what will need to be done. We'll need to upend regulatory structure, create millions of jobs, and protect the dollar. With the collapse of just ONE institution --Lehman Bros --here are the ramifications after selling off their "assets" yesterday. From John Carney: "So the final results from the Lehman Brothers CDS auction are in, and they're even uglier than expected. Finally price is 8.625 cents on the dollar.

Be prepared for the perma-bulls to start saying that all the money made by those getting paid out will be poured back into equity and the credit markets and save us all. And there are whiskey rivers on the Big Rock Candy Mountain.

This should result in another round of huge write-downs, and add paranoia to the market as everyone tries to guess who had the worst exposure to this disaster."

Anonymous said...

I'm so glad this is happening under Republicans and not Barack. Maybe things will begin to turn around at the beginning of next year, after he's sworn in.

sdg1844 said...

He's going to inherit a mess. No doubt about that. I believe that he will surround himself with the best and the brightest. It will take an engaged public to make sure we hold him and anyone else accountable for bad policy decisions.

Vigilante said...

A well-argued post. No one should endeavor to hold him accountable before winning the election. Details are not as critical nowadays as is the prospect of a massive, tsunami-sized electoral mandate repudiating Busheney epoch. Before his election, FDR was a centrist. Progressives should remember which inning we're in and keep in mind where their strike zone is.

MacDaddy said...

anon: I believe he has the smarts and the temperament, especially the ability to work with others-- to get the economy back on track. But he may need to be pushed by us.
rainywalker: You may be right. But I think it's a question of approach. We're taking a top-down approach to a problem that requires a bottom-up approach, starting with housing but moving on to employment, infrastructure building and generally putting money into the hands of ordinary folks to speed up the economy. Hopefully, that's where we will eventually go to.
"If we had a bailout last week, it represents about 25% of what will need to be done."
anon2: I agree.
sdg: Yes, he will inherit a mess. And he will have to level with the American people: let them know that some of the things he promised will have to be delayed, as he works to get the economy back on track.
"Progressives should remember which inning we're in and keep in mind where their strike zone is."
vigilante: I agree, but that shouldn't stop us from coming up with our own recommendations and pushing them once Obama gets in office.

Some people, including many of my friends, think that everything is going to be great when Obama gets in-- that happy days will be here again. We're going to continue to have a hard time; and we have to make sure Obama remains focused on the poor and the middle class. Centrist politicians are like a good drug, lulling us to sleep, making us forget high unemployment, the uninsured, the folks who have been at Guantanamo without a trial, and poor people being executed by the State who could very well be innocent like Troy Davis. We can't allow Obama or any other centrist politician to forget. Progressives pushed FDR, and we will have to push Obama.

Vigilante said...

Agreed! Totally!

Ray said...

Despite all the scary news and stats about layoffs, there are still millions of jobs posted on employment sites... (networking) (aggregated listings) (matches you to jobs)

Good luck to those looking for work.

SagaciousHillbilly said...

I believe Obama has the will and the intellect to be not a new Roosevelt, but the man who sets the tone for the 21st Century in America. The man who sets us on a righteous path and brings us peace and economic stability.
But will he have the support of the rest of the gov't? Will Amurkkkins be able to make the sacrifices up-front? Will Amurkkkins be able to embtace him as their leader. . . not a black leader but a leader of all Americans no matter what their race, class, color, ethnicity or religion?
It will take all that and more to put us straight.

MacDaddy said...

sagacious: I agree wholeheartedly. None of this racist crap from any group. It will take a coming-together attitude and a vision of looking out for working people first. One good note is that I've been following the websites and news about unions. The press isn't saying much about this, but they are stepping up big time for Obama, going door to door, confronting whites on their racism, saying we have to get pass it and think about what's in the best interest of working people. The two most impressive ones are the AFL-CIO and the SEIU. The Teamsters aren't bad either. They're starting to get credit for turning things around even in Pennsylvania. That's what will get Obama over in the constested states.

Kit (Keep It Trill) said...

Great post!!!

It will be up to us to push him to be our modern Roosevelt.

I'm guessing this is why they wrote the bailout bill the way they did. They're going to do as much damage as they can and write in as many loopholes to reward themselves before Inauguration Day.

MacDaddy said...

kit: Yes, they know what they're doing. People tend to forget that, though Treasury Secretary Paulson's face is in the news, Bush and his people are behind these bailouts. Paulson is just doing what his boss wants him to do. BTW: Thank you for the work you've been doing the financial crisis. It may not be sexsy to talk about, but it's important to all of us.