Thursday, February 26, 2009

John LeBoutillier on Obama's Speech to Congress

From Boot's Blasts:
• Our new President is a nice guy. The more he loosens up and relaxes himself - and smiles that huge and friendly and sincere smile - the more time he buys himself to cope with these cascading fiscal and banking problems;

• Because he fought for the Stimulus Plan and the Republicans did not join him, the economy now becomes Obama’s sooner than if the GOP was a part of it. In other words, Obama took ownership once his own prescription and protocols were implemented; blaming G.W. Bush won’t last much past this year.

• That is not to say that the Republicans escape the consequences of the ongoing financial meltdown; in fact, they have the blame painted all over them. And this taint will last for years to come.

• The GOP brand has lost its one-time luster as the party better able to cope with fiscal and national security matters. It will take years to get that special mantle back - if we can ever get it back.

• The Obama Administration is going to have more trouble with their fellow Democrats up on the Hill than they are with the Republicans. Yes, that is true. The GOP is - for the next 2 years anyway - almost completely inconsequential; but the leftist Democrats are feeling their oats and will soon want to move ever farther to the Left than Obama.

• Thus a new tension will soon arise - between these long-time House and Senate bulls who have been waiting for years to have un-checked power - and the Obama Administration which will soon realize their agenda is too much, too soon.

• Barack Obama is spending all his political capital now; he is speaking and travelling at a furious rate for a new president. Indeed, he does risk wearing out his welcome and suffering overexposure. At some point the public gets sick of the same speech over and over again and they begin to tune it out.

• Already the polling shows his numbers among Republicans falling quickly (to be expected) and among Independents to be slightly eroding (somewhat worrisome for Team Obama). And the markets tank after every big speech he makes!

• After a month it is clear that Obama fancies himself as the Salesman-in-Chief - much more than a hands-on administrator who is on top of everything in the Executive Branch. We have already seen break-downs in this model in the Daschle, Richardson and Geithner vetting procedures and the lard inside the Stimulus Bill, which Obama should have written instead of having Nancy Pelosi do it.

• Everything - EVERYTHING - for the Obama Administration depends on solving the ongoing banking problem.
• It is startling that so far neither Obama nor Geithner has come up with a bold, innovative plan to fix this mess and get people feeling better about it.

• Nor has the GOP offered up anything but Nays.

• Why not this simple, bold plan: the US Government - acting as a surgeon operating on a deteriorating patient - goes to the heart of the problem: the toxic, cancerous tumors in each bank - these securitized (bad) mortgages - and cuts them out of the patients’ balance sheets. All these cancerous tumors are gathered up into one federal bank - in the model of the S&L mess of 20 years ago - and held there until their value increases.

• Presto, the banks’ balance sheets are free and clear of the debts that were inhibiting lending - (their MRIs are suddenly clean of cancer now!)

• The Federal Government holds these toxic assets for as long as it takes for the housing market to recover - which it will because there will be pent-up demand for housing in the long run. We are a growing, now-over-300 million people population - and the demand for housing will eventually drive home values up again - although maybe not back to where they have been.

• We need a bold plan like this. Instead, Team Obama is following Team Bush’s approach - and it isn’t working.