Wednesday, September 17, 2008

The Obama Gaffe: For $85 Billion, Should We Not At Least Know Their Name?

By Michael Johns

With some of America's largest and most prestigious financial institutions undergoing a threatening liquidity meltdown, Democratic presidential nominee Barack Obama has not hesitated to seize the opportunity to exploit the situation for political gain. Despite being the second largest recipient of Fannie Mae and Freddie Mac political donations in the entire United States Congress, he is brazenly and hypocritically railing against the very Washington lobbyists who have poured money into his campaign in an effort to buy his influence. This despite the fact that, just a year ago, Obama pledged that he would take no private funding for this election, a promise the major media have never felt too obligated to hold him to.

Obama's political demagoguery and contradictions come at a critical moment. Yesterday, in the largest governmental bailout in American corporate history, the Federal Reserve Board announced that it would lend American International Group, the 18th largest corporation in the world, $85 billion in exchange for a 79.9 percent equity stake in the company. In all probability, this massive infusion of federal funds is just a stop gap measure as the company likely now seeks to liquidate itself in an effort to fend off bankruptcy.

For Obama, the whole mess is not a time for national unity; it is, rather, great political fodder. This morning, in an effort to extract political gain from the situation, he issued a statement, which said in part:

"The fact that we have reached a point where the Federal Reserve felt it had to take this unprecedented step with the American Insurance Group is the final verdict on the failed economic philosophy of the last eight years."

American Insurance Group? For $85 billion, Obama and his big government, tax and spend economic advisers apparently don't fret too much over the details in an effort to make their partisan jabs. One wonders if that $85 billion United States Treasury check would even cash had Obama's Treasury Secretary made it out incorrectly to one "American Insurance Group."

After the glaring error was pointed out, the Obama campaign quietly issued a corrected statement. And to be fair, in the frantic nature of a presidential campaign, one should be forgiving to the inevitable misstatements that will occur when some of the world's most aggressive journalists are following one's every move through a taxing schedule that often includes up to half a dozen campaign appearances in multiple states in one day.

But what is troubling about the Obama misstatement is that, despite his rhetoric of bringing a new bipartisanship to Washington, he has been as quick as any political candidate in recent memory to exploit and distort any and all statements made by his Republican rival and his surrogates. When former U.S. Senator Phil Gramm, the Texas Republican, told The Washington Times this past July 9 that "We have become a nation of whiners. You just hear this constant whining, complaining about a loss of American competitiveness, America is in decline," the Obama camp did not cease exploiting the statement until Gramm, one the brighter economic minds of our nation, was ultimately forced to reliquish his role as an advisor to Republican presidential nominee John McCain.

As recently as yesterday in Colorado, Obama was still quoting Gramm in a twisted effort to suggest that the McCain campaign is somehow out of touch with the economic challenges of ordinary Americans.

Then, this past Monday, amidst AIG and Lehman Brothers' liquidity meltdown, McCain quite properly and understandably sought to reassure Americans, stating accurately that the "fundamentals of our economy are strong." But within hours, Obama was distorting this statement too, suggesting that it somehow implied that McCain did not grasp the magnitude of two major American financial institutions confronting bankruptcy, or that he somehow felt that there did not exist major challenges in the current American economy.

Such is the hypocrisy that has guided the Obama campaign from the beginning. Promise to run a campaign with no private financing in an effort to present a candidacy of independence from the Washington establishment, and then quietly reject that promise and actively seek mammoth corporate, political action committee, 527 group, and other private donations. Rail against unnamed Washington lobbyists for corrupting the American financial system with sub-prime mortgage loans, while simultaneously championing a regulatory mandate that American financial institutions be required to make these loans. Demand an expeditious removal of American troops from Iraq, and then privately instruct Iraqi leaders--in probable violation of the Logan Act--to cease negotiating such withdraws with the Bush administration and to wait for the next administration. Run on a campaign of "change" and then anoint one of Washington's most entrenched liberal partisans as a running mate.

In citing an $85 billion federal loan to the "American Insurance Group," Obama should be reminded that his promises of bipartisanship should be matched with some basic political civility and respect. McCain properly rejects Obama's big government redistribution schemes as the solution to our economic woes. Nothing in that rejection suggests, as Obama has been inclined to say, that "John McCain just doesn't get it." And Obama opponents should operate similarly on an assumption that an error on a campaign statement, even one as glaring as Obama's was this morning, is not enough to suggest that the Obama camp does not have a grasp of the complexities of the current crisis. We need look no further than his policy proposals to know that.

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Obama Doublespeak and Liberal Complicity in America's Banking Crisis

In remarks yesterday in Golden, Colorado, Democratic presidential candidate Barack Obama passed around plenty of blame for America's unfolding banking crisis: He blamed American corporations. He blamed Washington lobbyists. And he even blamed Republican presidential candidate John McCain.

But the core of political blame for America's banking crisis, conservative writer Michael Johns argues, lies with a Democratic-led Congress that actually mandated much of the very sub-standard mortgage lending that is now setting off a snowballing liquidity crisis at some of America's largest financial institutions. Meanwhile, Johns says, Congress and Washington regulators failed in their responsibility to ensure appropriate regulatory oversight of high-risk leveraged borrowing that now threatens the solvency of these financial institutions.

In seeking to assign political blame for this crisis, and especially in assigning the blame wrongly, Johns says that Obama has revealed the hypocrisy of his pledge to work in bipartisan ways, which he has rarely done throughout his political career and is not doing now. While pointing blame in politically convenient directions, Obama also has been an advocate of many of the exact policies that created this crisis, and is now proposing even worse policy prescriptions that could deepen it even further.

"I've spent my career taking on lobbyists and their money, and I’ve won," Obama said yesterday in Colorado. In reality, however, the exact opposite is true: Among all 535 members of the United States Congress, only U.S. Senator Christopher Dodd, the Connecticut Democrat, has taken more in Fannie Mae and Freddie Mac campaign contributions since 1989, and Obama has only been in the Senate since January 2005.

The reality: Obama has welcomed close connections with the precise lobbyists and corporations he now contends that he has been "taking on." And as Obama has set about seeking and receiving this support, he has brazenly and shamelessly violated his September 2007 pledge to forego private funding in this year's Presidential election.

In his weekly interview with The Warren Michaels show this evening from 9pm EDT/6pm PDT to 10:30pm EDT/7:30pm PDT, Johns will discuss the origins and policy remedies to the crisis currently confronting American financial institutions. The broadcast is available globally, both live and by archived replay, at: The Warren Michaels show.

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