President Obama and the financial crisis: ‘We’ll do it my way’


Through the near four years that President Obama has been in office, facing a financial crisis that was given to him by the Bush Administration, the 110th session of Congress, Christopher Dodd and Barney Frank, and the votes of then Senator Obama, we’ve heard Obama say that ‘their way’ (the GOP’s) drove us into this ditch.

“After they drove the car into the ditch, made it as difficult as possible for us to pull it back, now they want the keys back. No. You can’t drive. We don’t want to have to go back into the ditch. We just got the car out.”*

First of all, President Obama usually doesn’t define ‘their way’, for doing so might better define ‘his way’ to his adversaries, but let’s assume when he says ‘their way’ he’s talking about dealing with a financial crisis is through free market principles and deregulation. I think this is a safe assumption, based on some of the follow up explanations he and his supporters have made concerning ‘their way’.

I have no problem with a candidate, or a subsequent administration, deriding the way things were done in the previous administration. Teenagers deride their father in a quest to form their own identity, and nearly every president that has followed Thomas Jefferson has derided the way things were done in the previous administration to form their administration’s identity. It’s safe to say that every candidate is trying to appeal to the personality of this country when they go anti-authority in their candidacy, and this is particularly the case when the previous administration was of the other party. So when the Obama administration, and their supporters, go with an anti-authority ‘failures of the previous administration’ stance, I have no problem with it. When Obama insinuates that ‘their way’ means that previous administration dealt in deregulation or free-market principles to resolve the financial crisis, my hackles go up.

Before we begin, it’s important to note that President George W. Bush is not without fault in the September ’08 debacle that brought us to our current financial malaise. Bush bought into the politically expedient Carter/Kennedy/Clinton idea of affordable housing through subprime loans. His goal, in doing this, was to display the “compassionate conservatism” moniker that he attached to himself during his presidential campaign. He was also, undoubtedly trying to get Democrats to like him, by mimicking ‘their way’. As a self-professed historian, Bush obviously didn’t study the Nixon presidency well enough to know that the more you attempt to get Democrats to like you, the more they hate you. It’s a trait very similar to that which a schoolyard bully displays when someone on the playground attempts to befriend them. They see these attempts as limps from a wounded antelope at the back of the pack, and they salivate over their victim’s perceived weakness, and they’re usually meaner to that person than they would be any other potential adversary.

Another vital event to note is that when the looming financial disaster began to rear its ugly head, Bush did attempt to avert the looming disaster by revamping Fannie Mae and Freddie Mac, but the head of the Finance Committee, Barney Frank, successfully thwarted all seventeen of these attempts.

When those attempts failed, and the housing market crashed, Bush was spooked by the projections of Hank Paulson and Ben Bernanke, and he attempted to ease us out of the disaster through financial regulation. In other words, Bush tried it ‘our way’, but when he failed to get anything done in a Democrat controlled Congress, he decided to go ‘their way’ by signing the largest Wall Street reform measure put into place since the Depression. Due to this financial dilemma, and other dilemmas (Medicare prescription), Bush ended up passing more significant government regulations on business in his tenure than any of the last five presidents. Yes, even more than the anti-business, anti-America President James Earl Carter! By the time Bush walked away from the White House, he had hired 90,000 new regulators in his eight years in office.*  That’s a net plus of 90,000 more regulators in the federal government in Bush’s last days when compared to the number of regulators Bill Clinton hired. With that in mind, the question must be asked, what does Obama mean when he says ‘their way’?

Now that the Bush administration has entered the history books, most conservatives and libertarians are forced into the uncomfortable position of admitting that Bush didn’t do it ‘their way’. Those of us who voted twice for Bush are now forced to admit that he did not try the free market, or capitalist principles, in the manner we would have. Libertarians and conservatives acknowledge that the Bush Administration attempted to try it ‘their way’ to avoid the looming disaster, but he did not use our way of getting out of the financial disaster Bush, the 110th session of Congress, Christopher Dodd and Barney Frank, and the votes of then Senator Obama caused. To call it ‘their way’ as candidate, then President, Obama has should require a definition of ‘their way’ based on facts. Most wouldn’t make a call for such definition, because Bush was a Republican and the natural assumption is that Bush followed Republican principles. So, everyone knows what Obama means by ‘their way’ and there is no need to call him out on it.

When Obama declared Bush’s ways were almost unpatriotic, we all knew what he meant. He was talking about Bush’s spending habits. The little fly in the ointment here is that Obama has not only mimicked Bush’s spending habits, and his voluminous regulations to get out of the financial crisis, he has expanded upon them. To call it ‘their way’, when you not only voted for ‘their way’ but expanded on it in your presidency, borders on sheer hutzpah.

If you were to say that Bush was partially responsible for the groundwork that led to the financial disaster, you would be correct. You would also be forced to admit, however, that Bush was adopting the Jimmy Carter, Ted Kennedy, Bill Clinton, and Barney Frank way of encouraging lending institutions to provide loans to individuals who had No Income, No Job, and No Assets (NINJA loans) for affordable housing is what got us there. If you argue that the Bush Administration was obviously unsuccessful in preventing the disaster, then you must consider the seventeen thwarted attempts Bush made to correct his previous mistakes. If you argue that Bush’s voluminous regulations obviously weren’t effective in easing us out of the financial disaster, you would be forced to answer the question of how Obama’s increased regulations have made anything better? Obama talks about how ‘their way’ drove us into a ditch, and if he’s talking about the failures of the previous administration I have no problem with it, but if he is talking about free market principles and deregulation, then I am forced to admit, with some bitterness, that those principles haven’t been tried in some time. If he’s saying that we should give ‘his way’ of more onerous regulation and taxation a shot, then I dare say that when his administration enters the history books even his most ardent supporters will have to admit that they didn’t get us out of the ditch.

* http://www.huffingtonpost.com/2010/05/14/obama-mocks-gop-you-drove_n_576170.html

* Welch, Matt. “Manufacturing Consensus: Building a Bipartisan Truth One “Questionable” Fact at a Time.” American.  Reason Magazine.  Jan 2012. Pages 2-4. Print.

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