Barack Obama on the economy: we can’t go back to business as usual

April 14, 2009 | By | 5 Replies More

One of Obama’s main points today is that we can’t go back to what we have been doing:

[W]e have to realize that we cannot go back to the bubble-and-bust economy that led us to this point.

It is simply not sustainable to have a 21st-century financial system that is governed by 20th-century rules and regulations that allowed the recklessness of a few to threaten the entire economy. It is not sustainable to have an economy where in one year, 40 percent of our corporate profits came from a financial sector that was based on inflated home prices, maxed-out credit cards, over-leveraged banks and overvalued assets. It’s not sustainable to have an economy where the incomes of the top 1 percent has skyrocketed while the typical working household has seen their incomes decline by nearly $2,000. That’s just not a sustainable model for long-term prosperity.

For even as too many were out there chasing ever-bigger bonuses and short-term profits over the last decade, we continued to neglect the long-term threats to our prosperity: the crushing burden that the rising cost of health care is placing on families and businesses; the failure of our education system to prepare our workers for a new age; the progress that other nations are making on clean energy industries and technologies while we — we remain addicted to foreign oil; the growing debt that we’re passing on to our children. Even after we emerge from the current recession, these challenges will still represent major obstacles that stand in the way of our success in the 21st century. So we’ve got a lot of work to do.

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Category: Economy, Politics

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (5)

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  1. mokr says:

    mmm… I highly disagree. Economies have been bubble and bust forever. It wasn't invented in the last 10 years. The government should mitigate the affects, not go against history.

  2. Tony Coyle says:

    Mokr: you say we shouldn’t “go against history”.

    I don’t understand what you mean by this.

    If we followed your counsel, we’d still be grubbing for roots, and hiding from the big cats.

    Not only is it in our nature to “go against history” it is demanded by our enhanced understanding.

    Historically, it was considered appropriate to treat blood loss by the attachment of leaches. It was considered treasonous to speak ill of your lord. It was considered heresy to think other than as taught by the church.

    I agree with Obama. Our institutions are different. The environment is different. It’s time that our businesses and policies (commercial and governmental) evolve to survive in this new globally connected environment.

    I’d rather push for their evolution, than wait for them to become extinct.

  3. Andrew Conant says:

    The function that the stock market plays in our economy is to set a value for companies by collective decision making. By stating that the bubble and bust economy must be replaced leaves in obvious question: "Who will set the value for public companies?" The only conclusion that I can come to is that Obama and his staff feel more qualified to decide who gets what in terms of American dollars then the collective wisdom of the entire US market. Yes collective decisions of the markets have been off in the past, which have caused bubbles and bumps, but their errors are only a fraction of the potential errors that can be caused from a centrally planned market. Please read about the collapse of the Soviet empire if you are not familiar with this concept.

    • Erich Vieth says:

      Andrew: Since when is the only alternative to the current situation socialism? How about regulation to make sure that those who create and sell securities are doing so honestly? If the mortgage companies and Wall Street firms securitizing and insuring real estate loans in the U.S. had been doing so honestly for the past dozen years, we wouldn't be in half the mess we're in. Those companies won't police themselves. That has been proven without a doubt. How about having the federal government regulating these firms not to set their value (Obama has never suggested that–you're making that up out of thin air), but to make sure that securities that are supposedly backed by collateral of X value are really backed by collateral of X value? Do you equate that regulation with USSR economics? If so, you need to go do some basic research and quit learning your economics from FOX.

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