At a White House meeting Monday, President Obama -- obviously concerned that he can't go on forever blaming the nation's dire economic straits on his predecessor, George W. Bush -- twisted the arms of the nation's top bankers, insisting that they start lending again, on the theory this will boost the economy.
"My main message in today's meeting was very simple: that America's banks received extraordinary assistance from American taxpayers to rebuild their industry and now that they're back on their feet, we expect an extraordinary commitment from them to help rebuild our economy," the president said after the meeting.
But, "Major Wall Street players say they are caught between the urging of the White House to lend and the equally forceful guidance from federal regulators not to lend to uncreditworthy borrowers," the Web site Politico reported Sunday. "It was willy-nilly lending to unqualified subprime mortgage customers, after all, that triggered the global economic meltdown."
Weirdly, President Obama managed to vocalize the bankers' damned-either-way conundrum himself, at the end of this little political Kabuki, adding, "No one wants banks making the kinds of risky loans that got us into this situation in the first place," he said.
Ah. So they need only make more loans, lots more loans -- to businesses now in shakier condition than they were three years ago -- all without doing anything "risky." Got it?
In fact, Mr. Obama's stern-faced impression of Phineas T. Bluster can be attributed in part to his own embarrassment before his core left-wing constituency. "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street," Mr. Obama intoned on CBS's "60 Minutes" this weekend -- though it's increasingly clear that's precisely what he's done.
The bad loans that led to the financial meltdown came about because Democrats made it a matter of policy that every American has an inalienable right to a home mortgage, punishing banks that refused to make high-risk loans, while meantime authorizing the quasi-governmental entities Fannie Mae and Freddie Mac to back high-risk loans with an implied guarantee of taxpayer bailouts.
What the market needs is less government meddling, which has never accomplished anything but to lengthen economic corrections into full-scale Depressions.
Lloyd Blankfein, chairman and CEO of Goldman Sachs, did not attend the mandatory lecture, blaming "bad weather."