Obama offers blueprint to salvage U.S. economy
Rocky Mountain News
Vail, CO Colorado
GOLDEN, Colorado ” The federal government must adopt much stricter regulations of financial markets in order to stop the collapse we are seeing now, Barack Obama told a crowd at the Colorado School of Mines today.
The Democratic presidential nominee offered more specifics than he has in months on the kind of government oversight he said is needed to deal with the problems that wracked the housing and investment banking markets and which came to a boil this week.
Obama also drew sharp contrasts between himself and his Republican rival, Sen. John McCain, who has described himself as “fundamentally a deregulator.”
“We are in the most serious financial crisis in generations,” the Illinois senator said. “Yet, Senator McCain stood up yesterday and said that the fundamentals of the economy are strong.”
Obama laid out a six-point regulatory plan. It would subject all financial institutions that can borrow from the government to more oversight, crack down on trading practices he said border on market manipulation and create a financial advisory group to discuss potential problems with the president.
Obama also said he would push a $50 billion emergency economic plan to repair infrastructure and schools, offer a 10 percent tax credit on mortgage costs to middle-class homeowners and change bankruptcy laws to make it easier for people in financial trouble to stay in their homes.
“America is a place where you can make it if you try … But the American economy has worked in large part because we have guided that market with an invisible hand of principle that America prospers when all Americans prosper,” Obama told the receptive 2,000-person crowd at the Lockridge Arena. “Too often over the last quarter century we have lost this sense of shared prosperity … The American economy does not stand still, and neither should the rules of government.”
In appearances Monday, McCain and running mate Sarah Palin, the governor of Alaska, also promised to reform Wall Street and help to turn the economy around. Palin, speaking in Jefferson County, said the regulatory system needs “a complete overhaul.” But aside from saying executive bonuses should be limited and corporate abuses addressed, she offered no specifics.
Obama said that such talk of reform by McCain seems hollow after a career of voting against increasing government regulation.
Obama then walked the crowd through the economic history of the past 25 years, saying that a reduction in regulation and oversight led to the savings-and-loan crisis of the 1980s and the problems that saw the collapse of three of the country’s five largest investment banks.
Vicki Snider, an Obama precinct captain from Brighton, recalled a recent conversation with a Republican she said complained that Obama hasn’t offered specifics to back up his campaign promises. Today’s speech offered not just a civics lesson on why the country is in trouble but the sorts of details that will capture voters’ attentions, Snider said.
Peter Lohaus, a retired business professor from Arvada, agreed that it was the specifics of the six-point plan that set the address apart from many of Obama’s other speeches. Lohaus said he liked the plan because it emphasizes government oversight more than regulation.
“I’m really glad that he basically addresses Mr. McCain’s ideas and doesn’t fall into a personality battle,” Lohaus said.
Obama devoted roughly the first half-hour of his 41-minute address to the economy and offered more specifics than he did during addresses Monday in Grand Junction and Pueblo.
Obama, whose economic plan was described as socialism by a number of protesters, emphasized that he is a supporter of the free market. But he said that the recent cycles of bubble and bursts are not a reaction to the free market but corporations using loopholes in the law to prop themselves up.
New regulations must ensure that all financial institutions strengthen their capital requirements and that government bodies investigate potential conflicts of interest between ratings agencies and the institutions that they rate. Regulatory agencies also must be streamlined, he said.
Several people who had seen Obama speak elsewhere said they noted an increased urgency in both his message and in the words of the local Democratic leaders who introduced him.
Former Denver Mayor Federico Pena said America can’t take another term of economic policies that mirror those of President Bush. Denver Mayor John Hickenlooper said if ever there is a time to reduce the interest of corporate and lobbyist money on Washington, this is the election to do it.
“We can not afford another four years where our economy and our children’s futures go down the drain,” Hickenlooper told the crowd. “If we have a president like Barack Obama to really help us solve our problems, the sky is the limit.”