Exploring Obama’s Ownership of Massive Economic Problems

By persistent obstructionism and using endless false information, the GOP pulled off some big wins in the 2009 elections. Worse still, they have been able to convince people that Obama has handled the economy badly. The YouGov poll shows that 47% disapprove of Obama’s handling of the economy, while 43% approve. The biggest problem is that the independents who supported Obama are deserting in big numbers. One reason for this is that unemployment is getting worse, and is now at 10.2%, somewhere around 17% when we take into account all the gimmicks that are employed to keep the figure artificially low. We think that it will be 9.5% next November, around 15% in real terms. That does not bode well for the Democrats in next year’s elections.

Republican politicians and pundits as well as mainstream media types repeatedly say that President Barack Obama now “owns” the bad economy. Likewise, they say that he “owns” the grim situation in Afghanistan. The fact is that both are the result of eight years of Republican bungling. Despite our long-time national faith that progress is inevitable and to be expected to occur quickly, the fact is that we are now looking at some intractable problems.

The more astute Republican spokesmen concede that the downturn began under Bush but insist that Obama should not have sought the presidency if we was unable to administer a quick fix. That they are justified in blaming Obama for lost jobs and the slow recovery. Their false assumption is that all recessions are the same and can be fixed easily.
John Boehner, the typical Republican spokesman, continually asks “Where are the jobs?” thought there has not been enough time for Obama’s policies to work. Then he says that all the stimulus money has been spent and has accomplished nothing. The fact is that $500 billion still has not been committed and much of the remainder is just getting into the pipeline. Republicans have vastly inflated the amount of debt incurred under Obama. The amount of the Stimulus was $787 billion, but the Republicans have been saying it was $ 1 or 2 trillion and no one corrects them.


Obama’s policies saved us from another depression. Yet he is being blamed for not working miracles. He inherited the worst sort of recession---one with very high unemployment , which is followed by very slow recovery of jobs. The financial system he inherited is a basket case,, and it will take years to fix it.

Republican politicians and pundits as well as mainstream media types repeatedly say that President Barack Obama now “owns” the bad economy. Likewise, they say that he “owns” the grim situation in Afghanistan. The fact is that both are the result of eight years of Republican bungling. Despite our long-time national faith that progress is inevitable and to be expected to occur quickly, the fact is that we are now looking at some intractable problems.

The more astute Republican spokesmen concede that the downturn began under Bush but insist that Obama should not have sought the presidency if we was unable to administer a quick fix. That they are justified in blaming Obama for lost jobs and the slow recovery. Their false assumption is that all recessions are the same and can be fixed easily.
John Boehner, the typical Republican spokesman, continually asks “Where are the jobs?” thought there has not been enough time for Obama’s policies to work. Then he says that all the stimulus money has been spent and has accomplished nothing. The fact is that $500 billion still has not been committed and much of the remainder is just getting into the pipeline. Republicans have vastly inflated the amount of debt incurred under Obama. The amount of the Stimulus was $787 billion, but the Republicans have been saying it was $ 1 or 2 trillion and no one corrects them.
Only in the United States, among advanced countries, would a president and his party be punished for heading off a depression and not producing a impossible economic miracle. That is because the level of our political discourse is so low, our voters so uninformed, and our MSM so unprofessional.
No wonder the GOP chants “Where are the jobs?” and complains that Democrats are playing dirty pool by blaming Bush and the Republicans for the terrible problems they created.

Democrats must take a cue from the “Obama owns it” argument to start educating the public in basic economics. The main line should be that the Republicans offer no plan other than tax cuts for the wealthy. We have a plan, and it is beginning to work. It may not create jobs as quickly as we want because the problems are rooted in a system the GOP created and defended. Obama inherited an economic and financial system the GOP created to benefit powerful interests and shift wealth to people in the top 5%. They must hammer away at the fact that the ordinary guy has not had an improvement in real wages in twenty years because of Republican policy. Yes, some Democrats helped them along, but those folks are now becoming contrite. We need proposals for reforming our economy and economic system to make them serve ordinary people. Banks should be prohibited from gambling with our savings. Insurance companies gambled away reserves built on the premiums we paid. Then they got state insurance commissions to grant huge increases in premiums that should be fixed. We need a plan to gradually carve up the banks that are too big to fail.


Susan Jacoby noted that it was not the secrecy surrounding the Clinton health care plan that accounted for its demise. Rather, the Democrats had failed to prepare and educate voters on what the Clinton plan would involve. They should have anticipated simplistic Republican complaints and lies and used facts to help voters see through Republican appeals to emotions and fear. With little good information at their disposal, many average Americans believed the Harry and Louise claims against Clinton care. Now people are believing the wild claims about “socialism,” losing their liberties, and Democrats ruining the economy because they have almost no conceptual framework with which to view the economy. If Democrats do not start educating the public about economic matters, the GOP, with the help of the media, will spin these situations in such a way that many voters will conclude that President Barack Obama created the bad economy and Afghan War.

If Republicans can blame economic problems on Democratic spending, they will have a leg up in their efforts to launch another attack on entitlements. By next year, our debt will be larger and could be a major political issue. Democrats need to explain how it got so large and to tie some of it to recent military adventures. There are signs that the Obama administration is open to reform” as a means of reigning in debt. That term has the same meaning as the IMF’s favorite term, “structural adjustment,” which means making the little guy pay for the mistakes of others farther up the food chain. We may have to swallow some entitlement reduction, but it should not take place without an end to the Bush tax cuts and the institution of excess profits taxes on the energy industry and on any firm’s transactions in hedge funds and derivatives.

It’s a tall order, but if Democrats do not begin to educate voters now, they could lose control of the House of Representatives next year. It will be hard to get people to think seriously about the economy and stop thinking about it in child-like terms. But more people are hurting now, and they may be ready for a little meat rather than economic pablum. The object should be to staunch the erosion of public support and regain some among people willing to think a bit.
Democrats will need to learn a few things about message control and to draw upon the expertise of people in cognitive science like George Lakoff. If Democrats cannot seize the initiative in the national discourse, we could well see a president Sarah Palin and a cabinet stuffed with tea baggers like Dick Armey in 2013.

John Mc Cain's Work for Keating Sheds Light on Today

Though presenting himself as Mr. Clean, the fact is that John McCain has a long history of questionable dealings with lobbyists. In 1987, he worked with four other Senators—all Democrats—to prevent federal regulators from taking over the Lincoln Savings and Loan Association, headed by Charles Keating. McCain attended two meetings with federal regulators to pleas Keating’s case. When he learned that the bank was under criminal investigation, he withdrew from efforts to help Keating. The bank collapsed and Keating went to prison. He was accused of selling worthless bonds to 23,000 people, many of whom were old people. The Five Senators were known as the Keating Five, but McCain and John Glenn were only admonished for showing poor judgment.

Senator McCain said he was only helping a constituent. The fact was that Keating and McCain had been friends since 1981. In three campaigns, Keating raised $112,000 for MCain. McCain made at least nine trips paid for by Keating, three of which were to Keating’s Bahamas complex. Despite Senate rules, McCain did not disclose the flights until forced to. Cindy McCain and her father, Jim Hensley, put $359,100 into Fountain Hills, a Phoenix strip mall sponsored by Keating. It was a” sweetheart deal,” according to the New York Times.

Keating was known as a nasty bigot and bully, and many avoided him. But McCain viewed him as a personal friend. Keating had great influence with President Ronald Reagan, who tried unsuccessfully to give Keating control of the board that regulates savings and loan associations. McCain succeeded in persuading Reagan to nominate two Keating men for that board. Some would say McCain was trying to put minions of the fox in the henhouse.

Keating also had a plan to lift the rule barring direct investments by the S and Ls, which was strongly backed by Newt Gingrich, Mc Cain, and some Democrats. Had the rule been changed, the S and L scandal would have been far worse. McCain probably backed the rule change because, like Phil Gram, he thought regulations should be stripped away. Even in the face of today’s possible financial meltdown, Mc Cain has not changed his mind, nor has Gram, who is a likely candidate for Secretary of the Treasury under the Arizonan. As late as March 25, 2008, McCain thought the mortgage crisis could be solved by stripping away regulations.

McCain was masterful in extricating himself from the Keating Five Scandal, calling it "my asterisk." And saying it will be mentioned on his tombstone. Almost as soon as he saw that he had a problem, he played the role of the repentant sinner and began to create the false reputation that he was an opponent of lobbyists and the improprieties seem to flow from their involvement in public life. To convince voters that he was a different sort of politician, he started calling for campaign finance reform.

Recently, McCain denied ever meeting Lowell “Bud” Paxson, even though there was a 2002 court deposition proving they had met.

Yet in 2006 he said he no longer supported public financing of elections. In 2008, he first signed up for public financing of his primary campaign and then backed out when it provide advantageous to do so. That allowed him to raise more money and spend much of it after the primaries had ended and before the conventions. Then, signing on for public financing of the general campaign, he denounced Obama for being inconsistent and not going for public financing. In all this, McCain looks far less like the honest maverick than a very skilled and crafty pol.

In 1999, MC Cain, then chairman of the Senate Commerce Committee, pressed the FCC hard to let Paxson Communications purchase a Pittsburgh television station. The FC claimed McCain’s request seemed like a threat and believed he had crossed the line separating propriety and impropriety. The firm had donated $20,000 to McCain. The firm had provided McCain transportation on a company jet on several occasions. Very briefly, the press raised questions about his relationship with a pretty young Paxson lobbyist who was often in his company in 2000. No solid evidence of a sexual relationship was found, so the press decided not to look into the rest of the story. The fact that McCain is clearly the darling of the press could have something to do with the drying up of the entire story.

When confronted with information about his conduct in the Paxson case, McCain said he was just prodding bureaucrats and then produced documents to show he had done the same thing in other cases involving large contributors. What chutzpah!

In 1999, McCain staff twice intervened to help wealthy contributor and close personal friend Donald Diamond obtain land from closed Army base Fort Ord in California. That deal allowed him to turn a $20 million profit, and another arrangement in 2005, again with McCain help, promises to be more profitable. This involves as many as 12,000 homes and benefits more than one McCain backer. Two former McCain staffers were hired as lobbyists in this complex deal to get him aboard. Twice in the 1990s, McCain introduced land legislation to help Diamond, and a third measure is now before the Senate.

In 2001, questions were raised about legislation he backed for the cruise industry and the large contributions it gave him.


Recently, it was learned that John McCain had more lobbyists working for his 2008 campaign than any other presidential candidate. Even after 6 were forced to leave due to their ties to unsavory regimes, there are 59 who do nothing but raise money. One of them is Ralph Reed, who was shown to be taking advantage of Native American clients in hearings McCain chaired! Over time, 133 lobbyists have worked for the Straight talk Express.

Others do other things in the campaign. Rick Davis is campaign manager, and Charlie Black is senior political advisor. Among Black’s clients were AT%T, Rupert Murdock, and Blackwater. Twenty-one McCain people also represented AT&T. Black had also been paid to shepard around Ahmed Chalabi, whose distortions helped get the US to invade Iraq. Could this be connected to McCain’s view that American troops must soldier on there, possibly indefinitely.


Two lobbyists were closely tied to the mortgage industry, which could explain why McCain has been so very friendly to the same industry. Randy Scheunemann, McCain’s foreign policy analyst, has represented the Republic of Georgia, and spoke on McCain’s behalf on this issue as recently as August 17. This could explain why McCain is so hawkish about the Russo-Georgian struggle. He speaks as though he is already president, keeping force and all other options on the table.

None of this information is to suggest Mc Cain is a crook. He is obviously very closely tied to the lobbyists and special interests that he frequently complains about. There is no doubt that he has a history of going to bat for them—sometimes appearing to go to far. He has repeatedly promised to never doing anything that gives the appearance of impropriety, but his track record is just the opposite of this.

He probably is not a crook, and deserves great praise for his service in the Vietnam War. But he is only mortal and has a bad track record for consistency and truth telling, despite all his self-praise about honesty. The most worrisome quality is that he seems to have a very poor learning curve. Had the nation followed the course outlined by Newt Gingrich, Charles Keating, Phil Gram, and McCain in the 1980s, the banking collapse of the George H.W. Bush years would have been infinitely worse. He learned nothing from this, and continued to hawk deregulatory policies through t he 1990s and supported the Phil Gram legislation that brought on the California energy crisis and today mortgage meltdown. As late a March he said the answer was more deregulation, and, we are told, he remains in telephone contact with his economic guru, Phil Gram.

It is far from unthinkable to speculate that should McCain enter the White House next January, that economy is experiencing severe shocks, and it is clear that a President McCain would have no clue as to what to do about it.