In the Wilderness

Obama has daunting tasks ahead of him that he is ill-equipped to address. Other than an ability to deliver a prepared text seamlessly, I see no gravitas or special ability here. A man is in office who can only offer up the failed attempts at solutions from the past, mimicking FDR with the imprimatur of Paul Krugman to back him up. The fix for banking is to remove the toxic debt, much of which was generated by government regulation forcing loans to those who were not credit-worthy and agitation by groups like ACORN against the practice of "redlining" which was supposed to be discriminatory but which was aimed at denying loans to people who had no prospect of ever paying them back. If an area had a substantial default rate with high percentages of slow pays and no pays, a bank was simply giving money away by making loans there. These sub-prime loans and almost certain to default mortgages have us in the mess we are in today, but the remedy is not nationalization of the banks but having the toxic debt removed from the books and the burden taken by the government that engendered the problem in the first place with its market manipulation to prevent the "sin of redlining". Removing the toxic debt was the original plan floated for TARP, but it seems to have made too much sense for Paulson to implement so the TARP funds were directed elsewhere. Nationalized banks, central planning, and a command economy will only create more misery.