Profits at many American corporations are looking pretty good these days, yet companies aren’t hiring.
Many American banks are flush with cash, yet they aren’t making many loans.
And despite President Obama’s repeated promises that his “healthcare reform” legislation would “lower the cost of healthcare,” many health insurance providers are raising the premiums they charge their customers (some by as much as forty percent) as the new law is phased-in.
So why, after nearly twenty-two months of President Obama “gettin’ people some help” (his folksy way of describing his interventions into the private sector economy), is the economy at a standstill, and in some instances getting worse?
Because Obamanomics has put the economy in a state of uncertainty and chaos, and it penalizes hardworking, productive people who play by the rules.
That sounds like a gross generalization, now doesn’t it? And I must be one of those unsophisticated simpletons that Senate Majority Leader Harry Reid and Vice President Biden have recently lamented about, whose tiny little mind can’t comprehend all the complex goodness that President Obama and his Administration have brought about – right?
Well, let me apply my simple mind as best as I can, and consider a few facts. And let’s start by looking at the Obama Administration’s intervention into two of the most troublesome areas of our economy in the last three years -the real estate, and mortgage lending markets.
There’s no doubt that when Barack Obama took office in January of 2009, home values and mortgages were in free-fall. After years of the federal government enabling so-called “subprime mortgages,” which were mortgage loans extended to less-than-qualified borrowers, and after years of highly unregulated adjustable rate mortgages, two lethal conditions ensued both at the same time: the interest rates on those “ARM” loans began to reset upward, while the value of real estate properties began to decline.
Against this backdrop, the Obama Administration set out to do what many people believed at the time was a compassionate thing – and began “rescuing mortgages.” If the Administration could bring the skyrocketing rate of foreclosures to a halt, so the reasoning suggested, then home values would eventually stabilize and a vital sector of our economy would eventually start growing again.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.