THE ECONOMICS OF OBAMA

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NATION - Only Obama has not called for a moratorium and interest-rate
freeze. Though he has been a proponent of mortgage fraud legislation in
the Senate, he has remained silent on further financial regulations. And
much like his broader economic stimulus package, Obama's foreclosure
plan mostly avoids direct government spending in favor of a tax credit
for homeowners, which amounts to about $500 on average, beyond which
only certain borrowers would be eligible for help from an additional
fund. . .

Obama's disappointing foreclosure plan stems from the centrist politics
of his three chief economic advisers and his campaign's ties to Wall
Street institutions opposed to increased financial regulation. David
Cutler and Jeffrey Liebman are both Harvard economists who served in the
Clinton Administration, and they work on market-oriented solutions to
social welfare issues. Cutler advocates improving healthcare through
financial incentives; Liebman, the partial privatization of Social
Security.

Austan Goolsbee, an economist at the University of Chicago who calls
himself a "centrist market economist," has been most directly involved
with crafting Obama's subprime agenda. In a column last March in the New
York Times, Goolsbee disputed whether "subprime lending was the leading
cause of foreclosure problems," touted its benefits for credit-poor
minority borrowers and warned that "regulators should be mindful of the
potential downside in tightening [the mortgage market] too much." . . .

Robert Pollin, an economist at the University of Massachussets, believes
"these three advisers generally reflect Obama's very moderate economic
program, similar to Clintonism." Wall Street apparently has come to a
similar conclusion. Obama had received nearly $10 million in
contributions from the finance, insurance and real estate sector through
October, and he's second among presidential candidates of either party
in money raised from commercial banks, trailing only Clinton. Goldman
Sachs, which made $6 billion from devalued mortgage securities in the
first nine months of 2007, is Obama's top contributor. When asked if
Obama would hold these financial institutions accountable for losses
incurred by homeowners and investors, his campaign refused to comment.
http://www.thenation.com/doc/20080211/fraser

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