Whoever the next president is in January will face a record number of economic problems. Barack Obama, who has just begun a 17 day tour of the U.S. to promote his detailed economic program, would be well advised to keep his economic message simple and easily understandable.
- Make America Financially Stronger
- Bill Clinton and Bob Rubin were able to turn around a country in deficit and leave George W. Bush with a $236 billion annual operating surplus in 2000. Bush has turned that annual budget surplus into an forecasted deficit of nearly $396 billion for 2008 and has doubled the country's total debt to over $10 trillion. Obama is against John McCain's plan to extend the Bush tax cuts to the wealthiest 10% of the country, a plan that under Bush meant a $2 trillion windfall to the wealthiest of Americans. Obama has said that all of his programs must be revenue neutral, that is they must all be paid for in advance, and that it is a priority of his administration to return the country's financial position to one of strength and stability. As a result, the U.S. dollar should strengthen considerably under an Obama administration as government deficits are often funded with newly printed money, the primary cause of inflation and currency weakness.
- Return Stability to Global Banking System
- The country came closer than many people realized to a full fledged financial collapse this winter as many U.S. investment banks and commercial banks could not have continued in operation without hundreds of billions of loans from the federal government. The eighth largest bank in England had a run on its deposits and was taken over by the Bank of England. What was the primary cause of the mortgage and housing meltdown? The financial industry lobbied our government to remove most regulation of their operations and then proceeded to lend crazy amounts of money to buy homes at even crazier price levels. Obama has told Wall Street that the gig is up, that the days of no regulation are over. His plan will require government supervision of hedge funds, banks and investment banks, he will stop predatory lending, he will increase capital and margin requirements to take damaging debt leverage out of the system and he will demand that banks and corporations become much more transparent and accountable in their reporting and in their operations.
- End Corporate Lobbying
- Name a problem in America and there is a corporate lobbying effort fighting against any needed reform. Healthcare costs - the HMO lobby, the housing crash - the mortgage banking lobby, high food and commodity prices - hedge fund lobbyists, the global financial crisis - Wall Street and commercial banking lobbyists, high oil prices - energy company lobbyists, global warming - the coal lobby, and unaffordable high drug prices - the pharmaceutical lobby. Obama has not taken any money from corporate interests or lobbyists and is making it a priority of his administration to end corporate lobbying in Washington. Will all of our problems be solved if we get rid of lobbyists? Maybe not, but at least we can then have an intelligent discussion about possible solutions to our most pressing problems in which are elected representatives work to help average Americans instead of to enrich corporate America.
- Provide Economic Opportunity to All
- Obama believes that a country cannot be prosperous and grow unless all of its citizens are engaged and working. People have to know that hard work and education will be rewarded. They have to believe that their government is looking out for their best interests. Obama wants to return America to a time when hard work was rewarded by increasing the minimum wage, providing health care benefits to all, not just the healthy and wealthy, extending unemployment benefits to the needy, reducing unemployment by creating new job opportunities and by strengthening the foundation of our retirement programs so no elderly person has to worry about making the rent payment ever again.
That is the Obama economic plan in a nutshell. It is a plan to strengthen our economy by providing Americans with the opportunity to compete in a global marketplace on a just and fair basis and with the required educational skills. And it just might work.
John R. Talbott is the best selling author of a forthcoming book "Obamanomics: How Bottom-Up Economic Prosperity Will Replace Trickle-Down Economics" from Seven Stories Press. Talbott was the first to warn of the current housing and financial crisis in his 2003 book "The Coming Crash of the Housing Market".