Obama’s Irresponsible Priorities

Before we embark on Barack Obama’s obsessively-sought federal health care program, a program that will affect every man, woman and child in this country for the next 50 years at the least, shouldn’t we first concentrate on addressing the regulatory deficits that got this nation’s economy, and the world’s economies, into a recession? Shouldn’t we get more citizens back to work before we embark on any huge new government programs that will radically change how we get health care and that are sure to cost taxpayers a fortune?

Shouldn’t revitalization of jobs and the economy precede any major new programs?

If we don’t address the causes of the recession and stop rewarding the culprits, we’ll end up with a deeper recession and more massive federal debt and all we will have to show for it is more companies like Goldman Sachs which are now generating massive revenues and handing out huge bonuses to its top executives but not contributing in any meaningful way to revitalization of the U.S. economy. Thanks to the feds (all those former top financial industry executives) bail out we all know they are saved. But what about the rest of us.

Below the fold, is economist Paul Krugmans opinion of Goldman’s obscene profits following its huge bail-out last year. But take a look at this quote from Jerome Armstrong, via Peter Daou’s Huffington Post article, “Obama and the Goldman Fiasco: Is This America Under Democratic Leadership?“:

… The New York Times’ Joe Nocera: “If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad.” Via MoJo: “Does the Obama administration have the political will to break up financial giants? If the government’s continuing transfer of wealth from ordinary taxpayers to Goldman partners is any indication, probably not.”

Bob Woodward is working on a new book about Barack Obama, and he told Charlie Rose Friday night that Obama — “this young, inexperienced president… has put so much on the table,” Woodward remarked, that once he had “someone count it up, and it was 131 initiatives, legislation, major appointments, major ideas. … He is undertaking just about everything, and all of those things are like planes unlanded [sic] in an airport. They’re circling, and we don’t know what order they’re going to land in, (or) whether they’re going to land at all.”

Yet health care is clearly Obama’s obsession. Just this week, there was Obama’s Wednesday health care press conference that upstaged Hillary Clinton’s major foreign policy speech. Then after the Congressional Budget Office issued its worrisome predictions and shook up members of Congress, Obama on the defensive hastily convened a Friday afternoon press conference to make a frantic push to get a bill done this summer. But there were no questions allowed!

So why is the president pleading for a mad dash to enact his health care plan this summer? I suspect it has a lot to do with a self-grandiose historical vision of himself as a 21st-century Franklin Roosevelt. Even a columnist for the pro-Obama Huffington Post blog observed,

“Even strong Obama supporters are starting to worry that the whole health care reform push may largely be a political exercise for the president.”

I fear that Obama’s frantic demands of Congress to rush along with the increasingly wary (and weary) American citizens will, quite likely, mean that this heath care plan will be poorly written and difficult to execute. It will also — because it is so rushed and poorly planned — increase the deficit and raise taxes ENORMOUSLY. We’ve already learned Obama’s path to health care will include adverse changes to Medicare, the one federal program that everyone agrees is run with efficiency and heretofore low administrative costs. That alone should give everyone reason to want Obama and Congress to proceed cautiously.

Even Congressional moderates are urging the president to slow down (Maine senator Olympia Snowe asked Obama to “be patient” and said it was “overly ambitious” to set an August deadline for Senate passage) — I checked out Paul Krugman’s latest column, “The Joy of Sachs.”

Krugman’s column points to a root cause of the recession that I wish Obama cared enough about to push for with the same urgency that he uses for his self-aggrandizing health care plan: REFORM of government regulations to curb the monstrous profits of the Goldman Sachs of the financial world that solely benefit those companies and leave taxpayers on the hook (again!) if those companies get in trouble again.

Tim Geithner has promised reform, but so far nothing has been accomplished, according to Krugman:

[N]ew regulations are still in the drawing-board stage — and the finance lobby is already fighting against even the most basic protections for consumers.

Okay, I realize that reforming the financial industry isn’t “sexy” and it’s not what lands presidents in history books, but right now it’s far more important, and I wish that Obama were in front of the cameras every day urging Congress to enact new financial regulations.

Krugman describes the repercussions of no government attention to regulations in “The Joy of Sachs“:

The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?

First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.

Second, it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away.

Third, it shows that by rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.

Krugman explains how Goldman Sachs et al. make their money, and then points out how the lack of any action to reform plays you and me for “suckers”:

Goldman’s role in the financialization of America was similar to that of other players, except for one thing: Goldman didn’t believe its own hype. Other banks invested heavily in the same toxic waste they were selling to the public at large. Goldman, famously, made a lot of money selling securities backed by subprime mortgages — then made a lot more money by selling mortgage-backed securities short, just before their value crashed. All of this was perfectly legal, but the net effect was that Goldman made profits by playing the rest of us for suckers.

And Wall Streeters have every incentive to keep playing that kind of game.

The huge bonuses Goldman will soon hand out show that financial-industry highfliers are still operating under a system of heads they win, tails other people lose. If you’re a banker, and you generate big short-term profits, you get lavishly rewarded — and you don’t have to give the money back if and when those profits turn out to have been a mirage. You have every reason, then, to steer investors into taking risks they don’t understand.

And the events of the past year have skewed those incentives even more, by putting taxpayers as well as investors on the hook if things go wrong”. … (Read all.)

Given our ongoing recession and increasing unemployment, I’m for “first things first.” In my opinion, the first thing we need to do is focus attention enacting regulations to lessen the chances of another catastrophic recession. And we need to do that before we implement any more costly programs, particularly hurried programs like the health care plan that are highly complex and will require a huge government apparatus to run.

I fear that the health care program will leave citizens on the hook for more taxes and more costs (despite Obama’s absurd claims that the health care plan will save us money), particularly since any program that’s rushed through will stumble out of the gate and probably need to be overhauled almost immediately.

In a must-read post at Hot Air — “CBO: House version of ObamaCare adds $239 billion to deficit” — Ed Morrissey describes the deficits that the new health care plan would create, stating that the Democrats are “cooking the books” to explain away these new deficits, and he notes:

The “fierce urgency of now” doesn’t play well once you’ve blown the first “now” into “you’ll see the benefits in 18 months.” With the CBO continuing to shine the light on the deep hole ObamaCare represents, Obama needs to get it done now or watch as it founders in its own sea of red ink.

We do need health care reform, but first we need to make sure that the Titans of the financial world don’t operate in a way that allows them to run amok without oversight and, if they do falter drastically, will not force taxpayers to pay for their greed-driven mistakes.

Then, with our economy stabilized, less unemployment and a healthier climate for now-struggling small and large businesses, we can look to solutions to major crises like health care.