Will Obama Succeed in Killing Limitless Capitalism?

Will Obama Succeed in Killing Limitless Capitalism?

Everyone is trying to figure out what to do about the bank crisis, how to move forward, and how to prevent anything like what happened in 2007 from ever happening again. The hard part, of course, is that there is no set answer- no economics text book is written about what you are supposed to do when the house of cards known as credit and loans actually collapses. For decades now our economy has been built on the principle that the more you lend the more you will make- so it was in some senses inevitable that as our banks got better at making loans we would get better at getting them, and once everyone had borrowed as much money as they possibly could…, well, something would have to give.

I was talking with a friend last night and he referenced a talk he was at recently. At the talk the speaker said our federal balance sheet had gone from 900 billion to 2 trillion in a year. Our stock market has shot back up to close to where it was, and based on what? Where is the money coming from? The speaker had predicted the 2007 crash and he said we are cruisin’ for a very similar bruisin’, so to speak. Agreed. There is very little actual recovery to back up the fact that our stocks are rising again and our investment banks are turning in profits- what are they profiting on? High end gambling, that’s what. And it hasn’t meant any more jobs, which we see not in the economic numbers or the numbingly semantic insistence of the government to make everyone (including our news services) call it a deep recession rather than a depression. Obama’s poll numbers show that the job issue is the real deal. Two governors and one senator later we have very little to show for year one of the Hope and Change president. Nothing much has changed except for the fact that people don’t like Obama nearly as much as they did a year ago.

So Obama is touting a new plan for the government to deal with the issues. Obama’s plan will limit the size and trading abilities of banks. Whoa.

If it goes through and is followed by the letter, Obama is, I shudder to say it, cutting capitalism off at the knees. His plan would mean that money is no longer limitless- there are limits, ends, and amounts that we cannot get to. There is a ceiling- for All of us.

The EU is not having any of it.

“The U.S. finds itself a little behind us on this. The Obama plan is not fit for the purpose in the EU,” says a source from within the EU according to Reuters.

Ouch. You mean the U.S. is no longer setting financial policy for the whole world? This is truly the new world order, though not the one I moshed to in a mudslide at my high school Rage Against The Machine concert. The machine is broken and fixing it means breaking it. Obama is going to do it. And probably lose the 2012 race in the process.

Photo Credit: jmtimages (via Flickr under CCL)