Obama Throws Down the Mid-Term Gauntlet

"They spent a decade driving the economy into a ditch, and now they're asking for the keys back. And my answer is, no, you can't have the keys. You can't drive. You don't know how to drive. You drive in the wrong direction." – President Barack Obama, speaking during a July 9 rally in Las Vegas.

Our President is part sassy charmer, part political sledgehammer, and he framed this fall's debate from the Democratic Party's point of view when he uttered these fighting words in Vegas. It will be interesting to see if Republicans have a gambler's nerve to counter by pointing out the role that liberal activists and politicians (and their "crony capitalist" enablers) played in the accumulation of toxic debt that nearly caused systemic financial failure.

For the sake of stronger business activity, it's important that this little fracas play out this fall. It should not completely dominate the mid-term campaign because every campaign is an opportunity to look forward, but learning the lessons of history can help us repeat an encore. And the events that led to the nation's financial meltdown are worth avoiding.

It's not that the calamity was the result of evil pursuits. People were trying to improve the level of home ownership among economically disadvantaged populations, a worthy goal for any number of reasons. But in pushing banks to make trillions of dollars in loans to people who could not afford to pay the money back, and promoting a bailout culture in which wealthy risk-takers were placed in a protective bubble, immune to the financial consequences of their outrageously bad bets, the Powers that Be brought forth a global economic crisis.

The business relevance begins with the fact that this is the primary reason that commercial bank credit isn't exactly flowing like Niagara Falls, but it doesn't end there. Learning the lessons of history, recent business history, is another reason for this sordid story to be fully understood.

If I were advising business-friendly Republicans, and recent evidence suggests their party is fully capable of blowing a golden opportunity this fall, I would tell them to turn the President's remarks on their head. I would point out that the same people who helped bring about this crisis — particularly Barney Frank and Chris Dodd and their "see-no-evil" approach to the financially troubled federal mortgage programs, Fannie Mae and Freddie Mac — are the principle authors of financial reform being debated in Congress.

That's like giving a drunk driver the keys to the car.

Instead, we hear Republican leaders like Michael Steele utter ridiculous, and demonstrably false, remarks about Obama's role in the war in Afghanistan, Congressman Joe Barton expressing boo-hoo for the universally despised British Petroleum, and House Minority John Boehner, who should immediately be replaced with Wisconsin's Paul Ryan, bone-headedly down playing the nation's financial difficulties. All of which are rhetorical gifts to Obama, who on a daily basis must get down on his knees to thank the Almighty for opponents such as these.

If they didn't exist, I swear the President would have to build them in a lab.

When I had a chance to speak earlier this year with Republican gubernatorial candidate Scott Walker, he told me that he and the aforementioned Congressman Ryan have talked about the best way to communicate what really happened to the economy. He demurred on exactly what, if anything, they have come up with, but their party's candidates better have an answer this fall. The nation's business community deserves better than a one-sided debate on this rather significant piece of economic history.

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