[Vision2020] Former Goldman Sachs Investment Banker John Talbot's "Obamanomics"

[Ted Moffett]

Review of "Obamanomics" at URL below:

http://www.salon.com/tech/htww/feature/2008/07/29/obamanomics/index.html
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"Obamanomics" author and investment banker John Talbot, who explicitly
predicted the current housing/mortgage crisis in 2003 when he wrote "The
Coming Crash In The Housing Market"

http://www.amazon.ca/Coming-Crash-Housing-Market/dp/007142220X

asserts that part of the reason for the housing crisis was a lack of
sensible regulation (including the repeal of the 1933 Glass-Steagall Act in
1999):

http://www.realpolitical.net/2008/06/obamanomics/

Excerpt below from URL above:

In chapter 3 of this book, "The Current Financial Crisis," he continues to
explain what went wrong in that industry and in this entire credit and
financial crisis happening now by saying that it had everything to do with
so-called small government. Small government is consistently pushed as the
better system by the GOP and they dismiss anything else by saying that
government shouldn't control our lives. That's dismissive to the point of
being inaccurate and totally misleading. From this book I learned how flawed
that approach can be when it comes to something so essential to all of us
like housing. Small government actually signifies lack of regulation, which
flings wide open the door to greed and corruption, and unchecked greed and
corruption, Talbot says, are exactly what caused the housing market to
crash:

…due to lack of regulation, an entire industry of predatory lenders grew up.
They were not interested in seeing home ownership increase in our nation.
They were only interested in maximizing their profits, regardless of how
unscrupulous their practices.

The GOP wants us to actually believe in their trickle down theory — that
wealth in the hands of the *responsible few* will eventually be distributed
evenly down to the masses. They make it taboo to say you support big
government while their state and federal officials still push tax increases
just like Democrats, but deliver far less to regular people who could
benefit from social programs.

In this book he argues that Obama believes in a bottom up theory, that
wealth distributed among the masses results in an uplifted economy. He
explains that regulation is simply the insurance we all have against the
lawlessness of greed:

It is regulation that insures contracts in a free economy are honored. It is
regulation that allows the development of a sophisticated financial
marketplace with sophisticated securities, and contracts that allow for the
formation of corporations, the protection of investments, the providing of
insurance, and the sharing of risk… No one is in favor of too much
regulation. But this financial crisis should alert everyone to the fact that
free markets cannot regulate themselves.

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Vision2020 Post: Ted Moffett
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