Quick Shots: Obama Messes Up His Metaphor

So in this article, Obama says regulators "dropped the ball." Unfortunately, he makes one crucial mistake. Regulators didn't drop the ball; they were never even trying to juggle the dang thing! Instead Congress (of which Obama was just a part) wanted both regulators and businesses to juggle more and more KNIVES, leaving the ball on the floor behind them.

To get away from the metaphor, Congress decided that it knew better than ordinary folks how to do things (sound familiar?) and set up the system so banks would be foolish. Regulators were never asked to check what really went wrong because what went wrong was the whole point of the exercise! Congress wanted poor people to buy houses, but poor people have poor credit. Instead of allowing banks to protect themselves by raising down payments and interest rates on the poor, Congress outlawed that as discrimination and told the banks to make idiotic loans. Then, Congress decided to regulate what items banks could hold so the financial wizards came up with a way to pass these bad loans off in a "Congressionally-approved" style. Because of other government regulations, these loans were accounted at market value; great and all when people are buying and selling, but when the market tanks, there can be no "market" value, creating a death spiral.

Now, some economists are saying that government wasn't the whole problem. Yep, I can agree to that. But, you always have to look at the institutional framework. It is the same lesson on fraud I was taught in school; to have fraud, you need an opportunity for fraud to exist. (That is where accounting controls come in.) In this case, unscrupulous finance wizards were allowed power because Congress created an institutional framework that allowed them to exist. Think of it this way. Suppose you drive to the worst neighborhood in a big city in a big ol' fancy car and after getting out, leave it unlocked with the keys in the ignition; should we really place all the blame on the person who steals that car or do you face most of the responsibility because you didn't take care of it?

That is what happened here. Congress left a sweet car sitting in a bad part of town with the keys in the ignition and someone stole it. THAT is the metaphor Obama should be using.

Of course, you should realize that Obama can't blame Congress cause that is where him and his corrupt cronies play. It can't be his fault; he is the all-powerful messiah of America now, don't you know. Where is Toto pulling back the curtain when you need him? Oh yeah, busy in Obama's home state of Illinois. My bad.