# Does Obama understand the economy? **URL:** \ **Category:** Great Debates\ **Created:** [September 17, 2008, 6:14am UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960 "2008-09-17T06:14:00Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Shayna](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/shayna/32/17976_2.png) [@Shayna](https://boards.straightdope.com/u/Shayna)\ **Post date:** [September 17, 2008, 2:10pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/21 "2008-09-17T14:10:30Z")
> [@DMark](#): > > Because part of the problem is McCain didn’t see it coming and has essentially voted along with Bush to set this all in motion. Obama certainly doesn’t have a crystal ball to see the future, but he has been talking about the sorry state of our economy for a long time (although few paid much attention) while McCain had to be bitch slapped with this crap over the weekend for him to make note of it. Maybe not a crystal ball, but certainly a degree of accurate foresight. > [@](#): > > Originally posted by **Andrew Sullivan** > > [Obama’s Prescient Judgment _Again_](http://andrewsullivan.theatlantic.com/the_daily_dish/2008/03/obamas-prescien.html) > > Obama warned of the impending mortgage crisis a year ago. Here’s the relevant letter on March 22, 2007. On this and on Iraq nd on Pakistan, his actual judgment simply put him on a level far beyond Clinton and McCain, let alone the current president. Judge for yourself: > > > [@](#): > > > > Originally posted by **Barack Obama** > > > > Dear Chairman Bernanke and Secretary Paulson, > > > > There is grave concern in low-income communities about a potential coming wave of foreclosures. Because regulators are partly responsible for creating the environment that is leading to rising rates of home foreclosure in the subprime mortgage market, I urge you immediately to convene a homeownership preservation summit with leading mortgage lenders, investors, loan servicing organizations, consumer advocates, federal regulators and housing-related agencies to assess options for private sector responses to the challenge. > > > > We cannot sit on the sidelines while increasing numbers of American families face the risk of losing their homes. > > > > And while neither the government nor the private sector acting alone is capable of quickly balancing the important interests in widespread access to credit and responsible lending, both must act and act quickly. > > > > Working together, the relevant private sector entities and regulators may be best positioned for quick and targeted responses to mitigate the danger. Rampant foreclosures are in nobody’s interest, and I believe this is a case where all responsible industry players can share the objective of eliminating deceptive or abusive practices, preserving homeownership, and stabilizing housing markets. > > > > The summit should consider best practice loan marketing, underwriting, and origination practices consistent with the recent (and overdue) regulators’ Proposed Statement on Subprime Mortgage Lending. The summit participants should also evaluate options for independent loan counseling, voluntary loan restructuring, limited forbearance, and other possible workout strategies. I would also urge you to facilitate a serious conversation about the following: > > > > - What standards investors should require of lenders, particularly with regard to verification of income and assets and the underwriting of borrowers based on fully indexed and fully amortized rates. > > > > - How to facilitate and encourage appropriate intervention by loan servicing companies at the earliest signs of borrower difficulty. > > > > - How to support independent community-based-organizations to provide counseling and work-out services to prevent foreclosure and preserve homeownership where practical. > > > > - How to provide more effective information disclosure and financial education to ensure that borrowers are treated fairly and that deception is never a source of competitive advantage. > > > > - How to adopt principles of fair competition that promote affordability, transparency, non-discrimination, genuine consumer value, and competitive returns. > > > > - How to ensure adequate liquidity across all mortgage markets without exacerbating consumer and housing market vulnerability. > > > > Of course, the adoption of voluntary industry reforms will not preempt government action to crack down on predatory lending practices, or to style new restrictions on subprime lending or short- term post-purchase interventions in certain cases. My colleagues on the Senate Committee on Banking, Housing and Urban Affairs have held important hearings on mortgage market turmoil and I expect the Committee will develop legislation. > > > > Nevertheless, a consortium of industry-related service providers and public interest advocates may be able to bring quick and efficient relief to millions of at-risk homeowners and neighborhoods, even before Congress has had an opportunity to act. **There is an opportunity here to bring different interests together in the best interests of American homeowners and the American economy. Please don’t let this opportunity pass us by.** Judge for yourself indeed. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [September 17, 2008, 2:13pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/22 "2008-09-17T14:13:56Z")
> [@DMark](#): > > Obama certainly doesn’t have a crystal ball to see the future, but he has been talking about the sorry state of our economy for a long time (although few paid much attention) while McCain had to be bitch slapped with this crap over the weekend for him to make note of it. What legislation has Senator Obama introduced to deal with the current problems of the economy? Since, as you mentioned, he has had a “long time” to do so. Regards, Shodan ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [September 17, 2008, 2:15pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/23 "2008-09-17T14:15:29Z")
> [@Measure\_for\_Measure](#): > > I think it’s fair to say that Obama has closer ties with academic economists that McCain does. Aye . . . If only they weren’t [Chicago-School](http://www.thenation.com/doc/20080630/klein) economists! :eek: ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [September 17, 2008, 2:18pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/24 "2008-09-17T14:18:35Z")
> [@Measure\_for\_Measure](#): > > Those with a solid grasp of public policy will know about adverse selection, counter-cyclical fiscal policy, moral hazard, externalities and the like. Bill Clinton certainly knew this stuff and I suspect that Obama does as well, given his professorship at the University of Chicago, an institution known for its law and economics program. He was a **law** professor. Not that that is not a good preparation for the presidency – it is especially encouraging, after the past eight years of “unitary executive” lawlessness, that he was a professor of **constitutional** law – but any exposure to economics would be incidental. ---
**Author:** ![Shayna](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/shayna/32/17976_2.png) [@Shayna](https://boards.straightdope.com/u/Shayna)\ **Post date:** [September 17, 2008, 2:28pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/25 "2008-09-17T14:28:58Z")
[**Barack Obama’s Record**](http://www.barackobama.com/issues/economy/) **Housing** : In the U.S. Senate, Obama introduced the STOP FRAUD Act to increase penalties for mortgage fraud and provide more protections for low-income homebuyers, well before the current subprime crisis began. **Predatory Lending** : In the Illinois State Senate, Obama called attention to predatory lending issues. Obama sponsored legislation to combat predatory payday loans, and he also was credited with lobbying the state to more closely regulate some of the most egregious predatory lending practices. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [September 17, 2008, 2:36pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/26 "2008-09-17T14:36:13Z")
> [@Shayna](#): > > [**Barack Obama’s Record**](http://www.barackobama.com/issues/economy/) > > **Housing** : In the U.S. Senate, Obama introduced the STOP FRAUD Act to increase penalties for mortgage fraud and provide more protections for low-income homebuyers, well before the current subprime crisis began. Ah. So it is your allegation that the primary reason for the current economic conditions is mortgage fraud? And I am afraid your link doesn’t work. Regards, Shodan ---
**Author:** ![The\_Understander](https://avatars.discourse-cdn.com/v4/letter/t/3da27b/32.png) [@The\_Understander](https://boards.straightdope.com/u/The_Understander)\ **Post date:** [September 17, 2008, 2:41pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/27 "2008-09-17T14:41:49Z")
> [@Shodan](#): > > Ah. So it is your allegation that the primary reason for the current economic conditions is mortgage fraud? > > And I am afraid your link doesn’t work. > > Regards, > Shodan Just erase the quote marks at the end. Not to speak for **Shayna** , but I believe your question was what legislation was introduced to deal with the current problems of the economy. I do not recall that the primary reason – by the way, economic systems tend to be rather complex, so trying to boil down one cause for the current crisis is in my opinion a fool’s errand–for the current economic crisis was the topic of discussion. ---
**Author:** ![Least\_Original\_User\_Name\_Ever](https://avatars.discourse-cdn.com/v4/letter/l/e480ec/32.png) [@Least\_Original\_User\_Name\_Ever](https://boards.straightdope.com/u/Least_Original_User_Name_Ever)\ **Post date:** [September 17, 2008, 2:44pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/28 "2008-09-17T14:44:43Z")
[Slate](http://www.slate.com/id/2199810/)addresses this question indirectly. Democrats, as a whole, are better for the economy than Republicans. The question is if Barack Obama will be better for the economy, but it sounds like the case has to be made why he WON’T be better for the economy. ---
**Author:** ![IdahoMauleMan](https://avatars.discourse-cdn.com/v4/letter/i/71c47a/32.png) [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)\ **Post date:** [September 17, 2008, 2:51pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/29 "2008-09-17T14:51:17Z")
> [@Shodan](#): > > Ah. So it is your allegation that the primary reason for the current economic conditions is mortgage fraud? > > And I am afraid your link doesn’t work. > > Regards, > Shodan My personal beef with Obama is that (I think) he gets it, with ‘it’ being the general way forward in terms of economic levers that foster growth, employment, higher living standards for Americans, etc. But unfortunately, he parses his words and takes the opposite side of arguments that sound like cognitive dissonance. Then he panders to his base. Two examples quickly come to mind. The first was in a debate with Hillary that was moderated by Charles Gibson. Gibson challenged him on higher marginal tax rates for personal income, basically citing solid historical evidence that the Laffer curve exists in practice. In other words, lower marginal tax rates actually INCREASE government revenue on the top end, due to increased incentives to work and invest. Hooray! I thought. Here’s an actual intelligent economic point being raised during a debate, instead of just standard soundbite politics. Obama fumbled the question pretty badly. He actually, sort-of, kind-of, admitted that Gibson was right, but then sort-of said he didn’t care. His objective was to bring the top closer to the bottom, even if it meant destroying wealth. This has been debated on other SDMB threads. And those weren’t his exact words I know, but I sure think that’s what he was trying to say. The second is his stance on free trade (or protectionism). I can’t believe he is against free trade in his heart. I just can’t. He seems too damn smart for that. But he panders and panders to the union base, the environmentalists, etc. And we had that little sideshow with one of his advisors doing the nudge-nudge, wink-wink with Canada when Obama came out against NAFTA. So that’s what bugs me about his economic policies. I actually think he gets it. Probably more so than McCain. But for God’s sake, stand up and say it and have some spine to explain why you are saying it to your left-wing constituents. Or else say that you get it, but you don’t care, because you are a Socialist at heart. Pick one or the other. Right now I’m confused as hell, so I have to go with the guy who at least has some discernable track record on smaller government and freer markets. ---
**Author:** ![Sinaijon](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@Sinaijon](https://boards.straightdope.com/u/Sinaijon)\ **Post date:** [September 17, 2008, 2:56pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/30 "2008-09-17T14:56:11Z")
> [@Measure\_for\_Measure](#): > > Handy quote on website from Nobel Laurette James Heckman: "I’ve never worked with a campaign that was more interested in what the research shows.” In context of the NYT article, that quote was about education, not economy. Also, what other campaigns has he worked for? Has he worked for a Republican campaign? If he’s only worked for Democrats, that’s a fairly damning statement to them. If he hasn’t worked for other campaigns, then it is completely worthless statement. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 17, 2008, 3:04pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/31 "2008-09-17T15:04:59Z")
McCains economic adviser called Americans afraid of the future economic problems whiners. He was called Enron Loophole Gramm for his part in legislation that made the Enron debacle possible. His wife soon was on the board at Enron. Then he is responsible for the legislation that gutted Glass/Steagall which was passed after the depression to stop deposit banks from speculating. he is stepping back now due to the crash he helped cause. But trusting him shows how out of touch McCain is. Obama has a pretty clean slate. He says the right things but we will not know if he can stand up to the powerful until he actually does it. I hope so. ---
**Author:** ![stolichnaya](https://avatars.discourse-cdn.com/v4/letter/s/bcef8e/32.png) [@stolichnaya](https://boards.straightdope.com/u/stolichnaya)\ **Post date:** [September 17, 2008, 3:06pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/32 "2008-09-17T15:06:38Z")
> [@Shodan](#): > > What legislation has Senator Obama introduced to deal with the current problems of the economy? Since, as you mentioned, he has had a “long time” to do so. A fair point. I am unaware of any legislation that Obama introduced to deal with the lending crisis. On the other hand, the job of the executive is to assemble a competent team, review information and make sound decisions. This is the “executive experience” that everyone has been on about. And it seems to me that on Iraq, on Pakistan, and now on this lending crisis, Obama has been publicly right and prescient about the major things that we are speaking about as challenges to the executive branch in the next 4-8 years. And the best part is that these are simple, logical realizations that do not require secret information or specialized knowledge. They just need openness, free debate, and rational thought. This speaks well of him. ---
**Author:** ![Humble\_Servant](https://avatars.discourse-cdn.com/v4/letter/h/47e85d/32.png) [@Humble\_Servant](https://boards.straightdope.com/u/Humble_Servant)\ **Post date:** [September 17, 2008, 3:12pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/33 "2008-09-17T15:12:44Z")
> [@BrainGlutton](#): > > He was a **law** professor. Not that that is not a good preparation for the presidency – it is especially encouraging, after the past eight years of “unitary executive” lawlessness, that he was a professor of **constitutional** law – but any exposure to economics would be incidental. UofC law alum here–the alumni magazine I got yesterday in the mail has Obama on the cover and the lead article is “How UofC is Barack Obama?” The conclusion is that we first need to debate what it means to be UofC, which could take awhile, before we can answer this secondary question. The UofC law school is the home of “Law and Economics.” Even though Obama didn’t teach it, it permeates the school–there are plenty of cross-appointments of economists who teach in the law school. While the exposure would be incidental, it would be incidental in a fundamentally more major way than anywhere else. ---
**Author:** ![Shayna](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/shayna/32/17976_2.png) [@Shayna](https://boards.straightdope.com/u/Shayna)\ **Post date:** [September 17, 2008, 3:14pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/34 "2008-09-17T15:14:24Z")
> [@Shodan](#): > > Ah. So it is your allegation that the primary reason for the current economic conditions is mortgage fraud? Did I say that? ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [September 17, 2008, 3:23pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/35 "2008-09-17T15:23:52Z")
[QUOTE=IdahoMauleMan] But unfortunately, he parses his words and takes the opposite side of arguments that sound like cognitive dissonance. Then he panders to his base. [/QUOTE] Exactly my problem with him as well. I think Obama is the master at saying whatever his current audience wants to hear. Or saying things in such a way that the listener hears what they want to hear. It’s how he can make a speech that appeals to the usual crowd here on the SD AND to the center, to libertarians and even to some conservatives…because they are all parsing his words in their own terms and getting out of it completely different messages. Personally I think Obama is MUCH smarter than McCain across the board…including on the economy (though as a poster up thread noted he’s no expert). And as others noted I think Obama will pick a very good command team to advise him. My problem is what he will really do with it…because like you I’m confused by his message, since it seems to promise everything to everyone (except the Evil Rich™ seemingly), and that is flat out impossible and contradictory. > [@](#): > > Or else say that you get it, but you don’t care, because you are a Socialist at heart. Pick one or the other. Right now I’m confused as hell, so I have to go with the guy who at least has some discernable track record on smaller government and freer markets. I have to say I disagree with you here, if by the end you mean McCain. Listening to his speeches he is worse than Obama from my own free market perspective. He really talks about the same kinds of bullshit, at least in the speeches I’ve heard. Granted, like Obama, onces he’s elected he may move to whatever his REAL position is (in theory a fiscally conservative one in McCain’s case), but thats not what he seems to be saying when I listen to him talk. Frankly I think regardless of who wins we are in for tough times with either of these guys…and I seriously doubt that (from my perspective) either will be more than marginally better than the other one. If either of them do half of what they say they are going to do in their campaign speeches I’m thinking they will certainly wound the goose that lays the golden egg…perhaps fatally. Hopefully I’m fretting about nothing here, but I’m getting an uneasy feeling about both candidates…especially in light of 8 years of mis-management by Bush that they will be following. -XT ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 17, 2008, 3:27pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/36 "2008-09-17T15:27:12Z")
> [@Humble\_Servant](#): > > UofC law alum here–the alumni magazine I got yesterday in the mail has Obama on the cover and the lead article is “How UofC is Barack Obama?” The conclusion is that we first need to debate what it means to be UofC, which could take awhile, before we can answer this secondary question. > > The UofC law school is the home of “Law and Economics.” Even though Obama didn’t teach it, it permeates the school–there are plenty of cross-appointments of economists who teach in the law school. While the exposure would be incidental, it would be incidental in a fundamentally more major way than anywhere else. That doesn’t surprise me. My daughter has a degree in economics from U of C, and it pervades everything there. Hell, I’ve published two economics-based papers just from the second hand contact. (Not in economics journals.) **IdahoMauleMan** , our experience in the last seven years of increasing income inequality has been a disaster on the demand side, so your supply side dogma does not appear to match reality. The most impressive thing about his economic advisors, though, is that they seem to span a wide range of opinions, including some of the more traditional Chicago school ones. A president who will listen to opposing opinions and feels he can the smarts and analytical ability to pick one is the one I want. That’s sorely lacking in the current Administration. ---
**Author:** ![RadioWave](https://avatars.discourse-cdn.com/v4/letter/r/91b2a8/32.png) [@RadioWave](https://boards.straightdope.com/u/RadioWave)\ **Post date:** [September 17, 2008, 3:32pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/37 "2008-09-17T15:32:25Z")
It should also be mentioned that [he worked in the financial industry](http://www.boston.com/news/nation/articles/2008/08/06/obama_shows_hints_of_his_year_in_global_finance) during his senior year at Columbia. [QUOTE=The Boston Globe] Barack Obama has authored two books, heralded for their poetic reflections on the conundrums of identity and the possibilities of politics. But his first professional writing was for a weekly newsletter more concerned with how investing in gold futures in Sao Paulo and London could be used to hedge against the fluctuating value of Brazilian cruzeiros. [/QUOTE] > [@](#): > > Founded in 1954 to publish a magazine targeted at an increasingly globalized managerial class, Business International covered a broad array of subjects, including reports on economic policy making and recommendations for executive insurance policies. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 17, 2008, 3:34pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/38 "2008-09-17T15:34:44Z")
> [@xtisme](#): > > Frankly I think regardless of who wins we are in for tough times with either of these guys…and I seriously doubt that (from my perspective) either will be more than marginally better than the other one. If either of them do half of what they say they are going to do in their campaign speeches I’m thinking they will certainly wound the goose that lays the golden egg…perhaps fatally. Hopefully I’m fretting about nothing here, but I’m getting an uneasy feeling about both candidates…especially in light of 8 years of mis-management by Bush that they will be following. > > -XT I think being in for tough times is a given. I can see Bush saying the fundamentals are strong, since he has to cheerlead while Pauson does the real work, but McCain? One thing to consider. Since we will have a Democratic Congress, which is at least a bit more assertive than it used to be, most of McCain’s economic initiatives would be DOA. I don’t see any way there will be more high end tax cuts, for instance. I know some people think a do-nothing government is best, but we’re kind of in a jam now, and it would be useful for some remedies to be passed with a minimum of bickering. And of course Obama says what people want to hear. He is a politician. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [September 17, 2008, 3:43pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/39 "2008-09-17T15:43:39Z")
You are assuming here that Obama’s remedies would be good. I don’t make that assumption. If he makes good on the majority of the promises I’ve heard in his speeches I think it will be…very bad. In fact, my thought is that it’s a GOOD thing that, if elected, McCain will be blocked somewhat by a hostile congress…and a BAD thing that Obama, if elected, will not be. Of course, I may be being overly pessimistic…maybe once elected Obama will put together a really kick ass command team and do the right things. This will piss off the lefties (even if he takes the middle course between economic liberalism and economic conservatism), but it could happen. Guess we’ll see… -XT ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [September 17, 2008, 3:54pm UTC](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960/40 "2008-09-17T15:54:18Z")
> [@xtisme](#): > > You are assuming here that Obama’s remedies would be good. I don’t make that assumption. If he makes good on the majority of the promises I’ve heard in his speeches I think it will be…very bad. Care to make an argument for that? [Previous page](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960.md?page=1) [Next page](https://boards.straightdope.com/t/does-obama-understand-the-economy/463960.md?page=3)