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The Obama campaign released a plan today that talks about all kinds of good government initiatives related, and unrelated, to the financial crisis: "STOP WASTEFUL SPENDING AND CURB INFLUENCE OF SPECIAL INTERESTS SO GOVERNMENT CAN TACKLE OUR GREAT CHALLENGES." [PDF] Catchy, right? At first I assumed this would be silly, but there are a few good-sounding ideas in here alongside a lot of promises that might be much harder to keep ("Barack Obama will reform federal contracting and reduce the number of contractors, saving $40 billion a year"). Some points of interest:
- "Barack Obama will require his appointees who lead the Executive Branch departments and rulemaking agencies to conduct the significant business of the agency in public, so that any citizen can see in person or watch on the Internet as the agencies debate and deliberate the issues that affect American society. Videos of meetings will be archived on the web, and the transcript will be available to the public." If -- and it's a big if -- they actually did this, it would be fascinating. (Well, to policy nerds).
- "Ending federal subsidies to student loan providers and instead using the Direct Loan program, saving $4 billion a year." If, again, they actually did this, it would have wide-ranging positive implications for student-lending programs, and be bitterly opposed by private student-loan providers. See this old article I wrote on the subject.
- "In light of the now widespread valuation problems of complex financial instruments such as many of the mortgage-backed securities, Senator Obama believes it is crucial that capital requirements are reexamined and strengthened. He supports the development and rigorous application of new standards for managing liquidity risk. And Obama supports an immediate investigation into the ratings agencies and their relationships to securities’ issuers, similar to the investigation the European Union has recently announced." This signals an understanding of the fundamental systemic problem that underlies the financial crisis itself.
- "Earmarks grew from $7.8 billion in 1994 to $29 billion in 2006. In the past two years, the Democratic Congress has cut earmarks nearly in half, to $17.2 billion in 2008. However this amount is still too much. ... Obama is committed to returning earmarks to less than $7.8 billion a year, the level they were at before 1994, when the Republicans took control of Congress and the level of earmarks began increasing dramatically." A little more realistic than McCain's plan, but this will be a difficult fight.
Politico has a run-down too. Thoughts?
-- Tim Fernholz
