Democrats Obama, Clinton campaign on economy
CAMPAIGN '08
Obama, in New York, advocates immediate relief for homeowners caught in the sub-prime mortgage crisis. Clinton, in North Carolina, unveils a job retraining program.
WASHINGTON — Democratic candidate Barack Obama, speaking to a Wall Street audience at the historic Cooper Union for Advancement of Science and Art in New York, called for reform of the nation's regulatory system, immediate relief for homeowners caught in the sub-prime mortgage crisis and a $30-billion stimulus package to boost the economy.
"If we can extend a hand to banks on Wall Street, we can extend a hand to Americans who are struggling through no fault of their own," he said.
Saying the Bush administration had thrown the economy "out of balance," the Illinois senator described the housing crisis as evidence of a painful correction to the distortions of deficit spending.
"When all is said and done, losses will be in the many hundreds of billions," he said. "What was bad for Main Street was bad for Wall Street. Pain trickled up."
Obama said Democratic and Republican administrations had too often caved to special interests, favoring "financial manipulation instead of productivity and sound business practices."
"We let the special interests put their thumbs on the economic scales," he said. "The result has been a distorted market that creates bubbles instead of steady, sustainable growth, a market that favors Wall Street over Main Street but ends up hurting both."
Obama, introduced by New York Mayor Michael Bloomberg, founder of Bloomberg News and other financial enterprises, enunciated a series of "core principles" that he envisioned for the economy -- a crackdown on "trading activity that crosses the line to market manipulation," as was rumored in the Bear Stearns case; a realignment of compensation packages so that "both high-level executives and employees better serve the interests of shareholders"; and a streamlining of "overlapping and competing regulatory agencies."
"We need to regulate institutions for what they do, not what they are," he said. Noting that commercial banks and thrift institutions were subject to guidelines on sub-prime mortgages that did not apply to mortgage brokers, Obama said, "It makes no sense for the Fed to tighten mortgage guidelines for banks when two-thirds of sub-prime mortgages don't originate from banks."
The worsening economy has been a major theme on the campaign trail during the last few weeks and sparked debate among the presidential candidates about the best prescriptions.
