Topic: Decline of the West
Here’s a stinging takedown of President Obama’s self-serving claim that he inherited the worst economy since the Great Depression. No so, explains Commentary’s Peter Wehner:
[At the time of the 1980 election] Prime interest rates were around 19 percent. Inflation was in double digits, with forecasts that food prices would rise by more than 10 percent in the coming year and energy prices by 20-40 percent. Unemployment stood at 7.4 percent (it would eventually rise to 10.8 percent in the early years of Reagan’s presidency). Housing starts were in free fall. And auto sales were down 10 percent from the previous year.
In short, though it’s true that Obama inherited a lot of problems, they were by no means the worst ever faced by an incoming president. Moreover, as Wehner goes on to note, while Reagan had to deal with problems caused by his political opponents, Obama’s were of his own party’s making:
[I]n the words of AEI’s Peter Wallison, the “sine qua non of the financial crisis was U.S. government housing policy”—and that “far from being a marginal player, Fannie Mae was the source of the decline in mortgage underwriting standards that eventually brought down the financial system.”
Would it be too indecorous to point out that the Bush administration warned as early as April 2001 that Fannie and Freddie were too large and overleveraged and that their failure “could cause strong repercussions in financial markets, affecting federally insured entities and economic activity” well beyond housing?
In fact, President Bush’s plan for reform would have subjected Fannie and Freddie to the kinds of federal regulation that banks, credit unions, and savings and loans have to comply with. In addition, Republican Richard Shelby, then chairman of the Senate Banking Committee, pushed for comprehensive GSE (government-sponsored enterprises) reform in 2005. And who blocked these efforts at reforming Fannie and Freddie? Democrats such as Senator Christopher Dodd and Representative Barney Frank, along with the then-junior senator from Illinois, Barack Obama, who backed Dodd’s threat of a filibuster (Obama was the third-largest recipient of campaign gifts from Fannie and Freddie employees in 2004).
So when Obama speaks, as he so often does, of “the failed policies of the past” that got us into this mess, he’s talking about policies that he wholeheartedly supported back in the years before the deluge. It’s an all-too-typical example of this president’s casual, not say dismissive, attitude toward the facts.
