As he battles the economic downturn, President Barack Obama is bracing Americans for a recovery different than any in recent memory – not a go-go return to prosperity like the 1990s but a slow, steady climb to stability.
“We know that an economy built on reckless speculation, inflated home prices and maxed-out credit cards does not create lasting wealth. It creates the illusion of prosperity, and it’s endangered us all,” Obama said recently.
Obama has mainstream support for his position, including from Mark Zandi, an oft-quoted economist at Moody’s Economy.com who advised John McCain during the 2008 campaign. But Zandi said there’s not much an administration can do in practical terms to burst a developing bubble. The best way to cool things down is raising interest rates, which is the purview of the Federal Reserve. Another option would be for regulators to order banks to curtail lending to buyers of certain kinds of assets.
I'm curious as to how he's actually going to do this. Sounds like pandering to the public to me.
Why not try ensure no company or market is able to bring down the entire economy instead? Bubbles happen and then they burst, what's so bad about those responsible for it taking the downfall? Speculators take risk, that's what they do. You can't expect to change their habits, just make sure they don't bring everyone else down with them.
