Before the first debate (the Presidential debate) I had predicted that the Obama administration would somehow try to pin the economic collapse of 2007-2008 solely on their immediate predecessors. The administration certainly didn't disappoint. Right on cue, Obama himself blamed Bush's economic policies for the meltdown, followed by Joe Biden, then Stephanie Cutter for good measure (Cutter is Obama's campaign manager). The problem is that each is predictably trying to pass off a disingenuous narrative as truth and expecting you to be stupid enough to buy it. Let's refresh, shall we?
In Thursday's VP debate Biden charged: "They talk about this Great Recession if it fell out of the sky, like, 'Oh, my goodness, where did it come from?' It came from this man voting to put two wars on a credit card, to at the same time put a prescription drug benefit on the credit card, a trillion-dollar tax cut for the very wealthy. I was there. I voted against them. I said, no, we can't afford that." Stephanie Cutter virtually parroted his words in the spin room after the debate.
This followed along with Obama's narrative in the October 3rd Presidential debate when he said, "Are we going to double down on the top-down economic policies that helped to get us into this mess, or do we embrace a new economic patriotism that says, America does best when the middle class does best?"
Or is that his narrative at all? Obama later changed his explanation of the cause of the collapse, blaming a host of others: "The reason we have been in such a enormous economic crisis was prompted by reckless behavior across the board. Now, it wasn't just on Wall Street. You had — loan officers were — they were giving loans and mortgages that really shouldn't have been given, because they're — the folks didn't qualify. You had people who were borrowing money to buy a house that they couldn't afford. You had credit agencies that were stamping these as A-1 (ph) great investments when they weren't. But you also had banks making money hand-over-fist, churning out products that the bankers themselves didn't even understand in order to make big profits, but knowing that it made the entire system vulnerable."
At least he was a bit closer with that one.
What's needed by this administration -- other than a bit (OK a lot) more truthfulness -- is a refresher course on what started the ball rolling and what was the core cause of the collapse -- a reminder of who were the primary drivers and motivators behind what happened. After all, without being honest with themselves and the public about this, we are likely to promote and advance policies that set the stage for other similar collapses in the future.
First, I must be clear...I'm no fan of Bush's and the Republicans' "Big Government Conservatism" of the early '00s. At best the Republican establishment in Washington during this period was the better of two poor choices. However, the idea advanced by the Obama administration that the free falling economy of 2007-2008 was caused by the Bush era deficits is ridiculous. For one to take that as true, one would in turn have to ask "If the Bush deficit of $2 trillion over 7 budget years caused an economic collapse, what is Obama's deficit of $5 trillion in 4 budget years going to do to the economy???" You can't say Bush's deficit caused the collapse without also saying Obama's deficit has put us in extreme peril of a collapse that would make the last meltdown look like sunny days! Like I said the idea that Bush's deficits caused the economic collapse is laughable.
Obama's second comment is more on target. At least it acknowledges the cause of this severe recession was the collapse of the housing market. However, he somehow failed to mention the entities that, by far, had the largest influence in directing the economy off the cliff. Not mentioned was the fact that the federal government was in the driver's seat from the beginning. It was the government that put in place policies whose intent it was to influence behavior by private banks to take just the actions that they did.