Obama Blames 'ethic Of Greed' For Economy
Barack Obama went to New York Thursday and blamed lobbyists, greedy businessmen and complacent Washington politicians for creating “an ethic of greed” that led to today’s foreclosure crisis.
Not long after he left the stage, the Democratic presidential hopeful attended a fundraiser held by his campaign in a room in the Manhattan headquarters of Credit Suisse, one of the major investment companies caught up in the subprime lending mess.
While the fundraiser was not sponsored by the mortgage lender, Obama’s dual appearances highlight a challenge for all three of the remaining presidential candidates: convincing ordinary citizens they have the right formula for fixing the economy and enough independence from the nation’s financial mandarins to push it through Washington.
Hillary Rodham Clinton’s campaign pounced on the mixed images evoked by Obama’s New York schedule.
"According to the standard set by the Obama campaign, it looks like Sen. Obama will have a hard time cracking down on the practices that caused the credit and housing crises," said Phil Singer, the Clinton campaign spokesman.
But Bill Burton, an Obama spokesman, fired right back.
“Today’s event was a general fundraiser in a room paid for by our campaign and attended by people from varied backgrounds who are committed to changing the tone of our politics — and rejecting the kind of tactics that the Clinton campaign is now embracing. Any suggestion that this was a fundraiser hosted by the mortgage industry is laughable,” he said.
In truth, all of the candidates have made multiple trips to New York’s financial district — including the big investment firms now caught up in the mortgage meltdown — to collect cash for their campaigns in the past two years.
Bear Stearns, the near-bankrupt investment house that set off the latest market upheaval and the largest underwriter of mortgage bonds last year, was a regular donor.
Clinton has received $122,160 from Bear executives. Obama collected $40,925 and presumptive GOP nominee John McCain pocketed $66,800.
Morgan Stanley ranked second among mortgage underwriters last year. Its executives have given $383,420 to Clinton, $161,850 to Obama and $80,651 to McCain.
While all three candidates share fundraising ties to financial players at the heart of the current downturn, the two Democrats offer policy prescriptions that sharply contrast with McCain on the question of how to restore economic stability.
Obama leans heavily on his refusal to accept money from federally registered lobbyists to lend credibility to his assertion that he can resist pressure from vested financial powers that be. It also makes it easier for him to lash out at Washington on the campaign trail, despite his position as a sitting senator.
“Under Republican and Democratic administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productive and sound business practices. We let the special interests put their thumbs on the economic scales,” he said in his New York address.
“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,” he said later.
Obama said he’d seek a new, modern-era oversight system for the financial and housing markets. He also called for greater transparency in the complex transactions that turned a weakness in the mortgage industry into a global economic event. And he said the Federal Reserve Board should have supervisory authority over firms that may borrow from it.
At the $1,000-a-plate fundraiser, Obama didn’t veer from his earlier criticism of the industry. His comments echoed those of his speech.
“We have an economy that is out of balance,” he said o about 300 supporters. “It’s one in which most of the people in this room have benefited enormously over the last decade — and I include myself in that group. But it is an economy that has left millions of Americans behind.”
While Obama’s address largely laid out the reasons for aggressive action in Washington, a speech by Clinton in North Carolina on Thursday was more of a laundry list of policies she would try to implement as president.
She, too, promised to fight “against corporate special interest,” and ticked off her usual list of bogeymen: big oil companies, pharmaceuticals and companies that move jobs overseas.
Among the proposals she highlighted were ending tax breaks for those corporations and funneling money toward research and development of environmentally friendly products. She also promised to cut taxes on the middle class and raise them on the wealthy.
Both Democrats took swipes at McCain, with Clinton saying he’d “rather ignore the credit crisis and the mortgage crisis and instead would place blame on middle-class families.”
And to some degree, McCain brought those political shots on himself. His advisers Thursday were struggling to undo the impression left after an economic speech earlier this week that as president he would do little to intervene and manage the current crisis.
Greater transparency, stronger oversight and assisting homeowners are all legislative efforts that McCain would support, said Carly Fiorina, an RNC official and frequent McCain surrogate on economic issues.
But she conceded the Arizona senator’s response would be far less intrusive on the private market than the Democrats’ proposals — policy packages Fiorina described as “politics of the worst sort.”
“Republicans believe that the government has a role, but that business has a role as well, and that the government should be an actor of last resort, not first resort,” she added.