Massachusetts Senator Elizabeth Warren, a person I admire enormously, published a book released last week, A Fighting Chance (Metropolitan Books) in which Senator Warren accuses the Obama Administration and specifically Treasury Secretary Geitner and economic adviser Lawrence Summers of catering too much to the welfare of the big banks during the 2008 mortgage crisis and not caring enough for the middle class, homeowners and non- homeowners alike.
I completely agree with her but why did the Obama administration officials side with the supply siders and advocate for the wrong side in the income inequality wars?
It goes back to the Clinton Administration where most of the architects of this strategy first cut their teeth and even earlier.
For years the Democratic Party was branded the party of big government and anti-business both small and large. Promoted by the GOP as the antichrist of the private sector, a label anachronistically used to this day, the Democrats feverishly worked to shed that image in order to become a viable contender for the White House.
After the excesses of Lyndon Johnson’s Great Society and the economic missteps of Jimmy Carter, including 21% interest rates it seemed that the nomenclature was accurate and starting to stick.
Winning with only 43% of the vote, thanks in large part to Ross Perot pulling most of his 19% from Republican nominee George HW Bush, Clinton and his economic team were focused like a laser on fostering a pro- growth, pro-business atmosphere through promotion, tax incentives, any way they could, no business investment or opportunity was too unacceptable to this crowd and to their credit the American economy was soaring. Cut to 2007, 2008 and the bottom fell out for the housing industry, Wall Street and job opportunities but President Obama and his team of former Clintonites were still stuck in the zealous business growth mode and not thinking about all the helpless victims that fell by the way side, most by the hand of the very banks that were backed by the pro-business Democrats.
Like anything else the sides and intentions were not drawn between right and wrong, big guy vs. little guy but was more muddied and mired in thick, gooey policy muck.