When the Democrats lost their Senate supermajority on Jan. 19, 2010. President Barack Obama and his team went into spin mode, first saying that the loss was not a referendum on Obama’s politics, then a few days later saying that Obama and his policies were partially to blame.
Now their latest move has been to take on the banks and ratchet up the populist rhetoric. There’s one problem. Before going at the banks, President Obama needs to get his priorities straight. I agree that some of the bonuses the bankers have given themselves are appalling. But the fundamental issue enraging Americans are access to jobs and capital.
Lets start with access to capital. As an entrepreneur starting a business that will create 60 new jobs in Harlem, I can speak first hand to the difficulty of getting capital from the banks, but I can also speak first hand to a situation where one bank was willing to do everything for our business, but was told by federal regulators that their books were not in good enough order to loan any more money for the foreseeable future. I assume there are other banks like that that are in similar shape.
One of President Obama’s strengths is his ability to speak thoughtfully and intelligently about an issue, but his grandstanding rhetoric about fat cat bankers and taking the fight to them is sophomoric. The regulators that are telling certain banks not to lend any more money, work for President Obama. If I were President Obama, once the banking system came off life-support, I would have began an ongoing dialogue with the banking community about which banks are willing to give access to capital but have been advised not to. In parallel I would have also started a dialogue with state and municipal economic development agencies about which programs and projects they wanted to fund but due to cash shortages, were unable to. From those dialogues I would have created a list of projects that the banks and agencies wanted to fund. Then on a case by case basis, I would have created partnerships between the banks and the agencies to direct unused and repaid TARP money to the projects on the list.
Where jobs are concerned, the President has to be aware how his push for healthcare has delayed serious movement on jobs. Case in point the federal government has a New Market Tax Credit program that is part of the Community Renewal Tax Relief Act of 2000. One big part of this program is to create jobs and spur economic development in distressed areas. The program came to a close in 2009. Currently, there are two bills in Congress, S.1583 – the New Markets Tax Credit Extension Act of 2009 and H.R.3811 – New Markets Tax Credit Expansion Act of 2009, that propose to extend the program. Unfortunately no action has been taken on either bill because of the healthcare push.
So while President Obama can proclaim that a fight with the bankers, is a fight he’s ready to have, there’s more substantive work to be done to get businesses financed and more Americans back to work. I hope that’s work he’s ready to do.