Obama’s message of inclusion and practicality presents a fresh face and a valid approach. He seeks commonality rather than differences and guides the process toward a consensus rather than either force-feeding poorly vetted solutions or stonewalling perfectly workable solutions. Neither his presence nor his approach create knee jerk ideological objections in most circles. He presents an opportunity that might not show up again for a long time.
Obama’s history shows that he is less interested in specific plans made in advance and based upon assumptions than in real solutions based upon consensus of the parties who know how their own interests will be effected. In short, he understands that commerce, economics, politics and policies are processes rather than events. for those who seek concrete details on the outcome of the processes before they begin, Obama refuses to commit — because to do so, would be to presume to force others into an apparent consensus rather than a real one.
The Economist has been an advocate for “free trade” based upon [1] ideology and [2] “proof” based upon measurements of commercial activity that they think demonstrates the correctness of their position. Obama starts with a different premise: [1] practicality and [2] broadening the data that is interpreted to include more human factors and more humans.
Obama’s message of inclusion and coalition is not merely a political or electoral message. It is a fundamental, artful shift in approaching commercial behavior from the standpoint of believing that all sides have a legitimate stake in the short run as well as the long term. Criticism of his economic message has focused on lack of specifics. But the truth is that nobody has real specifics because current conditions are either unprecedented or at best difficult to reconcile with historical commercial behavior.
The free market advocates, including those who wish to infuse Basel II which allows Banks more lee-way in making their own risk decisions ignore the fact that the market forces are not free unless [a] there is some referee which inhibits but does not eliminate market dominance of a single company or group preventing access to information or commerce and [b] education and information are available and delivered to level the playing field created by complexity and sophistication in the financial markets that have undermined the notion of risk analysis.
In the recent mortgage meltdown, banks and other lenders made a simple calculation: if they lent the money under circumstances where they were able to sell off the risk element, they stood to enlarge revenue and eliminate losses associated with loan defaults. Stripped of fear of loss, an infrastructure sprung out of the maze of derivative securities that enabled artificial inflation of housing prices, fees and rebates to be paid to virtually everyone in the feeding chain of building, selling real estate, selling securities, lending and investing.
The result was that another massive re-distribution of wealth occurred away from the middle class on the borrowing side, and from government funds, pension funds and other managed wealth on the investing side thus reducing their ability to engage in commercial activity that supports the U.S. economy, which is driven overwhelmingly by consumer spending and availability of capital. The risk analysis performed by poorly educated bankers playing with securities far beyond their level of sophistication has led inevitably to a bubble of unprecedented proportions. Simple stated, a $250,000 house was sold for $400,000 and the extra $150,000 was spread around like confetti.
But the other net result was the equivalent of our eating our young. Most middle class citizens are out of options to come up with money to continue their discretionary buying, and their simply is not enough money around, nor a way to channel money to the middle class that will make up the difference. The result is that the continued divide between ideologies prevents effective solutions that are sitting right on the table but ignored by the decision-makers for fear of abandoning or enraging their political base.
Obama’s message of inclusion and practicality presents a fresh face and a fresh approach. He seeks commonality rather than differences and guides the process toward a consensus rather than either force-feeding poorly vetted solutions or stonewalling perfectly workable solutions. Neither his presence nor his approach crate knee jerk ideological objections in most circles. He presents an opportunity that might not show up again for along time.
Filed under: bubble, community banks, credit unions, currency, Eviction, foreclosure, foreign relations, GTC | Honor, inflation, Investor, Mortgage, Obama, politics, securities fraud | Tagged: economics, free market, risk analysis |
Yes I heard about the “scandal”. It is apparent that some contact was made, that it was initiated by some representatives of the Canadian government and that Obama was not aware of the contact. It is also apparent that Obama’s public position was simply repeated in private and that he would seek renegotiation of some key terms. And it is apparent that opponent s of Obama have invented a story that Obama had disclaimed his public position — because the Canadian government issued a statement denying the story and so did everyone else who was there. The “scandal” is that the story was circulated not that anything substantive occurred.
Have you heard the scandal about his rhetoric towards NAFTA and his campaign’s comments to the Canadian government?
http://freedompress.wordpress.com/2008/02/29/obama-is-pro-nafta/
-James
http://www.thepoliticus.org