Democrats Must Own Bad Obama-Era Financial Policies If They Want to Win
We are now slightly more than a month in to the Trump presidency, and Democrats are already gearing up for the next election, setting their sights on the next mid-term. However, if they want to prevail, they are first going to have to acknowledge and accept that the Obama administration did not oversee a golden era of financial and economic policies – no matter what kind of challenges he inherited.
The reality is Obama had many opportunities to help those in the working class, and he repeatedly declined to seize them.
The two main areas to which we refer:
- Obama’s handling of the foreclosure crisis/ subsequent bank bailouts. The end result of the policies adhered to on these fronts resulted in concentrated financial power, rather than support of the American middle class.
- Enactment of pro-monopoly policies. This approach crushed rural area economies, so it was unsurprising many of those voters – even those who had previously voted for Obama – swung to the side of Donald Trump.
Of course, we do know Obama wasn’t responsible for the financial crisis and he only finished the work of the bailouts that was begun by his Republican predecessor. However, the financial crisis was an opportunity to re-organize. Take for example the action by President Franklin Roosevelt following the Great Depression. The New Deal ushered in an era of prosperity in America. In the 1980s, Ronald Reagan used the recession to weaken union power.
So in early 2009, Obama had a significant amount of power. He had Democratic majorities in both houses of Congress. He had a great deal of legal latitude. And he had $350 billion in bailout money.
And what did he do with all that money? In the past, losses suffered in this kind of a recession would be shared by both debtors and creditors. Take for example the 1930s bankruptcy reform of the Home Owners Loan Corporation. Instead, Obama decided to prioritize the rights of creditors, which put most of the burden on borrowers. At one oversight panel hearing, Democratic leaders in the U.S. Treasury Department reported they could either preserve the capital structure of banks or have a “rational resolution” to the foreclosure crisis. They insisted both could not be done.
The other executive decision Obama made was to allow high-ranking bank executives off the hook, despite their criminal roles in the crisis. Referrals of criminal cases simply went ignored. Whistleblowers reported prosecutors simply weren’t interested. More than half of Americans wanted bankers behind the crisis punished, but very little action was taken on this front, setting in motion a pattern that is still ongoing. For example, no one in Wells Fargo has yet been held accountable for the massive fraud perpetuated by opening millions of phony accounts.
Obama also not only enabled but encouraged more than 9 million homeowner foreclosures. This was not just a byproduct of some other policy. It was in fact the explicit policy handed down by the U.S. Treasury Department. The program that was in place was marketed as a means to help underwater homeowners, but when Sen. Elizabeth Warren (D-Mass.) took Treasury Department officials to task, top brass conceded that halting foreclosures wasn’t actually the purpose. Instead, the point was to get banks back up and running.
All of these efforts, combined with inaction on monopolies in industries like pharmaceutical products, airlines and internet platforms, resulted in policies that caused widening inequality. Many of the jobs that were generated were mostly part-time or temporary positions.
Obama should be credited with prevention of an even greater economic collapse when he took office, but he also failed to take further decisive action when it mattered. Our debt defense lawyers in Miami noticed, and so did many others. Democrats need to own that and address it head-on if they hope to win moving forward.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.