Obama on the economy: McCain is 'third Bush term'
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by John McCormick
NEW YORK – Sen. Barack Obama proposed sweeping regulatory reform for banks and other financial institutions in a speech here today meant to address the sagging economy, a topic of key interest to many voters.
"We let the special interests put their thumbs on the economic scales," Obama said at the Cooper Union for the Advancement of Science and Art. "The result has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both."
The Illinois Democrat's speech comes as the latest figures show the economy sputtered out during the final quarter of last year and is likely doing even worse now as the housing crisis and credit crunch continue to take their toll.
The Commerce Department reported today that gross domestic product increased only 0.6 percent in the October-to-December quarter. In the quarter prior, the economy recorded a robust 4.9 percent growth rate.
The latest data has left economists -- and Obama -- saying the economy is either on the brink or in a recession.
Mayor Michael Bloomberg, who had breakfast with the presidential candidate when he was in New York in November, introduced Obama and noted that Abraham Lincoln had once spoken from the same podium, calling him "another man from Illinois who is also running for president."
Obama called for numerous changes to the regulation of the financial sector and the nation's markets. He said he sees the economy under strain almost everywhere he goes.
"I see them in every corner of our great country, as families face foreclosure and rising costs. I seem them in towns across America, where a credit crisis threatens the ability of students to get loans, and states can't finance infrastructure projects. I see them here in Manhattan, where one of our biggest investment banks had to be bailed out, and the Fed opened its discount window to a host of new institutions with unprecedented implications that we have yet to appreciate. When all is said and done, losses will be in the many hundreds of billions. What was bad for Main Street turnout to be bad for Wall Street. Pain trickled up."
"That is why the principle that I spoke about at NASDAQ is even more urgently true today: in our 21st century economy, there is no dividing line between Main Street and Wall Street. The decisions made in New York's high-rises have consequences for Americans across the country.
And whether those Americans can make their house payments; whether they keep their jobs; or spend confidently without falling into debt - that has consequences for the entire market. The future cannot be shaped by the best-connected lobbyists with the best record of raising money for campaigns. This thinking is wrong for the financial sector and it's wrong for our country."
"I do not believe that government should stand in the way of innovation, or turn back the clock on an older era of regulation. But I do believe that government has a role to play in advancing our common prosperity: by providing stable macroeconomic and financial conditions for sustained
growth; by demanding transparency; and by ensuring fair competition in the marketplace."
"Our history should give us confidence that we don't have to choose between an oppressive government-run economy and a chaotic and unforgiving capitalism. It tells us we can emerge from great economic upheavals stronger, not weaker. But we can do so only if we restore
confidence in our markets. Only if we rebuild trust between investors and lenders. And only if we renew that common interest between Wall Street and Main Street that is the key to our long-term success."
Obama criticized President Bush for the economy's problems, while also suggesting that presumptive Republican nominee Sen. John McCain of Arizona would bring more of the same.
"After months of inaction, the president spoke here in New York and warned against doing too much," Obama said. "His main proposal - extending tax cuts for the wealthiest Americans - is completely divorced from the reality."
Obama said McCain's proposals this week on the housing crisis "amounts to little more than watching this crisis happen," which he said is "consistent with Sen. McCain's determination to run for George Bush's third term."
Obama and his nomination opponent, Sen. Hillary Clinton, have talked about the economy throughout their now 13-month campaign. But their intensity on the topic has grown in recent months, as the housing crisis has deepened and the issue has become of greater concern to more Americans.
Clinton, who gave a speech on the housing crisis earlier this week, is expected to also address the broader economy today while in Raleigh, N.C.
Following his speech, Obama was expected to hold a fundraiser at New York offices of Credit Suisse, one of the nation's top sub-prime lenders. Clinton's campaign has suggested that is an example of Obama saying one thing and doing another.
Posted by John McCormick on March 27, 2008 10:16 AM | |
