In January of 2009, President Barack Obama inherited an economic calamity caused primarily by artificial government stimulation of the housing market and runaway spending by the Congress. Congressional demands that lenders include low income families in the mortgage lending portfolios coupled with a willingness of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) to purchase virtually every artifice for providing loans to those who could not or would not repay them, led to an artificial stimulus to the housing market.
As inevitable as day follows night, the subprime loans came due and those would could not or would not repay them, did not. The housing market collapsed due to oversupply; builders, suppliers, and real estate agents went out of business in droves. The default on the subprime loans became legion. The financial institutions that had packaged, purchased, sold and leveraged these worthless loans began to fall like a house of cards.
The blame for the resulting economic calamity falls squarely on the shoulders of Mr. Bush and the Congress –then controlled by the Democrats, including then-Senator Barack Obama. Congress, led by Senator Chris Dodd (D-CT) and Rep. Barney Frank (D-NY) not only demanded that loans be made to those who could not or would not repay them, they conspired to hide the impending collapse of the mortgage market by suppressing congressional oversight hearings into Fannie Mae and Freddie Mac. Mr. Obama was a willing participant in this charade and Mr. Bush – preoccupied with Iraq – failed to engage in his own investigation or to pressure Congress to pursue theirs.
The purpose of this abbreviated history is to remind the readers that as much as Mr. Obama would like to portray himself as the victim of Mr. Bush’s negligence, he was a willing accomplice. Mr. Obama may have not been driving the car when it went off the road, but he was pouring the booze that kept the driver drunk.
But the greater sin was when Mr. Obama promised to fix the problem knowing full well that he had neither the background, education nor economic understanding to do so. No person has assumed the presidency with so little practical experience. While Mr. Obama may have mesmerized the voters with his “Hope and Change” rhetoric, in reality, he lacked both an understanding of the causes of the economic collapse and the means by which the economy might recover.
Mr. Obama is the penultimate “community organizer.” Their history is one of blaming others for failure without ever accepting responsibility for charting success. They represent the entitlement class and prey upon class envy. They cannot demonstrate success or progress of their own doing and thus are left to blame others for their failures. Since they cannot build a society up for those in need, they are content to tear down a society so that all suffer equally.
A prime example of Mr. Obama’s ineptitude is found in the employment figures reported during his three years as President. From January 2009 until the nadir of the recession, the total private sector employment dropped from 110,981,000 to 106,772,000 in February of 2010 – a loss of 4,209,000. During that same period of time, the number of federal public employees increased from 2,792,000 to 2,872,000 – a gain of 80,000. While the private sector lost 3.8 percent of its workforce, the federal government and its public employee unions increased their numbers by almost 3 percent.
And here is why this is a prime example of Mr. Obama’s ineptitude. The loss of 4.2 million private sector jobs (with the attendant loss in business revenues) represents a significant decline in the revenue (taxes paid) to government. The increase of 80,000 federal government jobs represents a recurring expense to the federal government. The private sector jobs were productive – they created things – while the federal government jobs were non-productive – they created only an expense (and in some instances a barrier to production in the private sector). Mr. Obama’s failure to understand what creates economic growth by emphasizing government growth at the expense of private sector growth is unforgivable.
Mr. Obama is a product of privilege. His progress through society has been without pain. He has never experienced hard work or the satisfaction of success from that hard work. His entry and progress through some of the nation’s best colleges and professional schools defied the academic and personal challenges required of others. He elected to forego the rough and tumble of the law and instead migrated to the relative safety of a community organizer where sound and fury were more important than actual accomplishments. He supplemented that with a minor foray into the cloistered halls of academia where – even there – he declined the rigors of “publish or perish” in favor of minor teaching assignments.
Mr. Obama is probably a pretty smart individual but not nearly as smart as his apologists would have you believe. The proof of that is that he has spent three years of on-the-job training and has still learned nothing about how an economy acts or progresses. His initiatives (massive government spending primarily to bailout his wealthy campaign financiers on Wall Street and boost the financial resources of his primary campaign supporters in the public employee unions) have failed to restart the economy. (What little movement has occurred is due to the natural progression of winnowing down the oversupply that caused the recession in the first instance.) Having failed, Mr. Obama has returned to his roots as a community organizer – blame others for failure, promote class envy among those hurting from the economic downturn the most, and engender the belief that one is entitled without effort or achievement.
The hope of yesterday that promised nourishment and vitality at breakfast has proven to be cold stone soup for dinner.
[Dan Meek was correct in his comment (below). This article originally listed the date of the start of the Obama Presidency as January 2008. It has now been corrected to January 2009, along with the relevant employment numbers. Thanks Dan!]