Obama has the wrong education
How many people do you know that can afford to pay cash up front for a new home? Very few people have that kind of money lying around, so instead most people borrow the money from a bank and then pay it back over time. A prudent person knows how much they can afford to pay in monthly installments and simple math will then tell them how much they can afford to borrow based on those payments. You can try demonizing the banks all you want, but the reality is that if you are foolish enough to tinker with gimmick financing that you don’t understand just so you can purchase more house than you can actually afford, the blame for failure really lies with you. So why demonize the banks for your ignorance when they are simply providing a service most people need?
Obama failed to understand the banking industry and as a result of his demonization and regulation of them lending all but dried up as their incentive to lend dried up. This in turn has caused theU.S.to suffer through a horrendous slump in the housing market because financing for those that would like to purchase a new home is almost non-existent. Obama attacked a necessary industry, and now wonders why that industry is no longer producing. It’s the typical one step forward thinking that the Left loves to practice. It makes for good sound bites on the front end, but leads to horrific results later.
He is now attempting to do the exact same thing with the oil industry. Oil speculators are like banks. They put up the money on the front end so that exploration and drilling can be setup for future production with the expectation, just like banks, of making their money back over time along with some profits for their efforts. If you demonize and regulate away their incentives to function, just like the banks, they will cease to provide the capital necessary to develop production. Yet another industry will go into a slump.
Commodities, just like banking, are a gamble since you are dealing with future variables. You always hear about the times when a gambler hits it big in Vegas, but what you don’t hear about is all the times he loses. Just like a gambler, speculators need the big wins to offset the losses. As a commodity, oil plays to the supply and demand principles. Less production means less supply. Less supply translates directly into higher prices. To put it bluntly, Obama’s idiotic plan of regulating oil speculators in order to bring down gasoline prices won’t work. Just like the banking example above, simple logic along with simple economics proves that it can’t work. In fact, as I’ve illustrated here, it will do the exact opposite over time. Obama can have all the Ivy League law degrees he wants, but what he really needs is an education in the basic principles of both logic and economics.