Senator Barack Obama today released the following statement on the state of the economy.
The news coming from Wall Street today has confirmed our fears that the financial fallout from the mortgage crisis would spillover into the wider economy. Months ago, I went to Wall Street and said that our capital markets could not function without the confidence and trust of the public. I said that Wall Street could not succeed while the rest of America struggled. Now, as the Federal Reserve does its best to bring stability to the market, we must focus on what we can do to restore the public’s confidence in the market and help the millions of Americans who are worried about their jobs, their homes, and their financial future.
History will not judge President Bush kindly for his failure to act in a way that could’ve prevented or alleviated this economic crisis. There have been few Administrations so out of touch with the concerns and the struggles of working Americans and so beholden to the lobbyists and special interests who blocked any kind of regulatory oversight of the financial sector. Whether it was subprime lending, credit cards, or bankruptcy laws, Washington has allowed these special interests to prevent sensible policy that could have prevented the most serious effects of the current predicament.
Nowhere has the failure been more pronounced than the President’s refusal to address the plight of homeowners and Main Street businesses that lie at the heart of the turmoil right now. After months of inaction and half-measures, the President traveled to New York last week to say that there is a danger in doing too much and implied that doing nothing would be preferable. His principle policy to address the financial crunch that now threatens millions of Americans with foreclosure and thousands of businesses with bankruptcy is to extend his tax cuts for the wealthiest few. It’s a policy so divorced from the reality facing the American people and the American economy that it would be laughable if it weren’t so frightening.
At this moment, we must come together and act to address the housing crisis that set this downturn in motion and continues to eat away at the public’s confidence in the market. We should pass the legislation I put forward with my colleague, Chris Dodd, to create meaningful incentives for lenders to buy or refinance existing mortgages so that Americans facing foreclosure can keep their homes. This is not a bailout for lenders or investors who gambled recklessly, and it is not a windfall for borrowers. It is a fair and responsible way to help stem the foreclosure crisis.
Many other steps will be required to reverse this downturn in the weeks to come. It will require the efforts of those in the financial community; of the Federal Reserve; of Congress, and the White House. And it will also require a renewed confidence that we can meet this challenge. We are the United States of America, and each time we have faced moments of adversity in the past – some much greater than this – we have summoned a spirit of cooperation and innovation to emerge stronger and more prosperous than we were before. But it will take work, it will take time, and it will take leadership that recognizes that we are all part of the same economy, and that economy must work for every American in order for America to prosper in the 21st century.