Question: How has Obama done so far?
Dean Baker: It’s a very mixed picture. I mean, he’s done some things that are very big, very important. The stimulus package got passed in his first month in office. That was important. It’s a big step towards combating the downturn. He’s gotten healthcare on the agenda. He has plans in his budget to start on healthcare and he’s worked with Congress to have it included in the reconciliation process which means the Republicans can’t filibuster it. He’s also put forward ambitious plans on energy, which is part of the stimulus. So he’s done a number of big, important things: extended employment benefits, changed the formulas so that a lot of people that had not been covered previously are now covered and provided healthcare benefits. People who are unemployed will have 65% of their healthcare benefit covered by the government, which makes it affordable for a lot of people that could not otherwise afford health insurance once they’ve lost their jobs. So a lot of good things.
Where I give him bad marks is his dealing with the financial system. We had a really big problem with finance run amok. That’s what got us here. That’s what led to the downturn and it has to be reined in and he doesn’t seem prepared, at least he hasn’t seemed prepared at this point, to really take the hard steps to rein in Wall Street. And what I worry is that we’re going to get out of this, one, costing the tax payers huge amounts of money because we’re looking at spending at least hundreds of billions, and quite possibly over a trillion dollars to bail out the banks. And, two, basically, leaving them in shape, leaving them as they were being prepared to run amok again. So, I think that would really be unfortunate. It’s a really big drain to the tax payers. It’s a huge amount of money. We’ve had big fights over sums that were less than a hundredth as large, and then on top of that, not to wrestle back the sector when it’s really crying out for serious regulation. It really has to be reined in. Wall Street has to serve the rest of the economy. When you have an economy that’s being run to serve the financial sector, you’re asking for trouble.
Recorded on: April 28 2009
Discuss
Shaan Batra on May 7, 2009, 3:24 PM
I disagree. “Reining in Wall Street” doesn’t do anything for the economy. “An eye for an eye and a tooth for a tooth” right? No. Steps must be taken to combat the system, putting controls in place and having proper regulatory oversight, WIHTOUT interfering with the capitalist system that drives economic growth and job creation. In my opinion, it was a system failure, not a Wall Street failure. Wall Street is still a crucial element in the growth of companies and in the preservation of wealth.
Angel Jimenez on May 8, 2009, 3:19 PM
While I agree that Wall Street is beneficial to companies, it does not benefit average man. We have seen what happens to retirement accounts. We have seen people “playing” the stock market and getting burned because the big boys know how to manipulate the system—SEC or no SEC.
I say eliminate the stock market and you and I can trade stocks on ebay or, dare I say it, Graig’s list. Let’s not let them tell us about the great efficiency of the market. They can take that efficiency and shove it where the Sun don’t shine.
I am tired of seeing our money go into bonuses for brokers and profits for the rich.
Please keep up the dissemination of your progressive stand on the stock market.
Bas S on June 11, 2009, 3:24 PM
You can’t seriously call yourself an economist if you blame the current course of events on Wall Street. The whole economic boom / bust cycle is caused by artificial interest rates dictated by the Federal Reserve. Other than that, the system incorporation and limited liability is to blame for Wall Street’s problems. Greedy and corrupt CEO’s are protected by law if they screw up (the biggest lobbyers are the ones with deep pockets). In a real free market system there would be no corporations – people would be personally responsible for their business decisions. Investing in stocks – even long term – is trying to climb an ever growing mountain called “inflation”. Inflation (CPI) is understated by 7% yearly, so people actually think they’re coming out ahead with a 10% return on stocks. Do you think it’s an accident that the Fed no longer publishes M3 growth? Any country where the financial system is run by the government – implicitly (banks) or explicitly (Fed) is guaranteed to be ineffective causing major recessions/depressions like this one to come back with greater force.
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