A Desperate Attempt, A Limited Understanding

Obama's Bank Reforms Don't Add Up - Peter Wallison, Wall Street Journal. Restricting loans to real estate virtually guarantees another bank crisis in the future:

After the Democrats' disaster in Massachusetts last Tuesday, President Obama appears to be flailing. Gone is the cool and measured demeanor that made him look presidential when the financial crisis struck during the 2008 campaign. Instead, the financial reform proposals he advanced later in the week seem to reflect political panic—a desperate attempt to appeal to the populist sentiment against Wall Street. Unfortunately, they also reflect a limited understanding of good financial or banking policy.

Unintended consequences once again. Yes, banks should not be too big to fail. Fannie and Freddie need to be reined in or preferably abolished (are pigs flying? Let's not replace them with something worse.) Taxpayers should not be on the hook to bail out risky behavior. Let's have a well-reasoned approach to reform. This is not it.

Cartoon Michael Ramirez, IBD.

More. NRO. The stench of cheap populism.

More. It's no wonder they come up with these half-baked policies after the failed stimulus package last year (which just made their big government allies fat cats), considering the Obama administrations's overwhelming lack of small business experience:

As an owner of a small business myself, I've been somewhat disappointed in how anti-business President Obama seems to be. We already knew he lacked experience in private business and never owned one, but I've been really surprised at how disinterested he is in the private sector - considering how important it is to lift the country out of the economic problems we're facing. After all, the real jobs that provide long term solutions are created by American business, particularly small businesses. But now, a comparative study by Michael Cembalest, the chief investment officer for JP Morgan Private Bank, reveals how out of balance this administration is on the issue compared with previous presidents.

In comparing the balance of private versus public sector cabinet appointments of presidents between 1900-2009, Obama has the lowest number of private sector cabinet members by far. While most previous presidents had at least 50% of their cabinet advisors with private sector experience hiring and firing, and running a business, President Obama's cabinet has less than 10% with such expertise. His cabinet is dominated by public employees. Since the dominant engine of job growth is private business, it's very surprising how little the president cares about hearing from that community.