Can it be possible that Russia’s Vladimir Putin is less of a Socialist than Obama? The following excerpts from the speech he gave at the World Economic Forum in Davos, Switzerland in January make more sense than what the liberals now running our country are doing.
Esteemed colleagues, one is sorely tempted to make simple and popular decisions in times of crisis. However, we could face far greater complications if we merely treat the symptoms of the disease.
Naturally, all national governments and business leaders must take resolute actions. Nevertheless, it is important to avoid making decisions, even in such force majeure circumstances, that we will regret in the future.
This is why I would first like to mention specific measures which should be avoided and which will not be implemented by Russia.
We must not revert to isolationism and unrestrained economic egotism. The leaders of the world’s largest economies agreed during the November 2008 G20 summit not to create barriers hindering global trade and capital flows. Russia shares these principles.
Although additional protectionism will prove inevitable during the crisis, all of us must display a sense of proportion.
Excessive intervention in economic activity and blind faith in the state’s omnipotence is another possible mistake.
True, the state’s increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent.
The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation.
In the 20th century, the Soviet Union made the state’s role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.
Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.
And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.
Ladies and gentlemen, unfortunately, we have so far failed to comprehend the true scale of the ongoing crisis. But one thing is obvious: the extent of the recession and its scale will largely depend on specific high-precision measures, due to be charted by governments and business communities and on our coordinated and professional efforts.
In our opinion, we must first atone for the past and open our cards, so to speak.
This means we must assess the real situation and write off all hopeless debts and “bad” assets.
True, this will be an extremely painful and unpleasant process… However, we would “conserve” and prolong the crisis, unless we clean up our balance sheets. I believe financial authorities must work out the required mechanism for writing off debts that corresponds to today’s needs. [snip]
The need to develop a number of fundamental market institutions, above all of a competitive environment, has become more acute.
We were aware of these problems and sought to address them gradually. The crisis is only making us move more actively towards the declared priorities, without changing the strategy itself, which is to effect a qualitative renewal of Russia in the next 10 to 12 years.
Our anti-crisis policy is aimed at supporting domestic demand, providing social guarantees for the population, and creating new jobs. Like many countries, we have reduced production taxes, leaving money in the economy. We have optimised state spending.
But, I repeat, along with measures of prompt response, we are also working to create a platform for post-crisis development.
We are convinced that those who will create attractive conditions for global investment already now and will be able to preserve and strengthen sources of strategically meaningful resources will become leaders of the restoration of the global economy.
Are the Democrats listening? The answer would appear to be no, as Obama today unveiled a new $75 billion program to try and stave off foreclosures. From Jeff Schreiber:
President Obama’s plan to revitalize the housing market and stem the rising tide of home foreclosures by using the power and expanding the scope of the federal government… reeks of the same kind of government involvement which led to the housing and credit crisis in the first place.
This is more of the same failing policies, featuring the same lead players. Fannie Mae. Freddie Mac. Christopher Dodd. Barney Frank. The gang’s all here and, once again, we’re back to characterizing homeownership as a right and artificially propping up people who simply cannot stay afloat — only, this time, instead of forcing banks to lend money to borrowers who are obviously incapable of paying back the loans, the government is pumping money into the market and forcing banks to maintain those bad loans and refuse any sort of remedy.
We never learn. We allow ourselves to make the same costly mistakes over and over and over again because nobody will take responsibility for the errors which have already presented themselves. We continue to defy common sense by rewarding irresponsibility and sheer stupidity in America while simultaneously vilifying responsibility and success.
Once again, the people hurt the most are those like you and I, people who live and die by their budgets, who constantly are forced to make endless, unthinkable sacrifices in order to remain responsible and meet their own obligations. You and I will be the ones paying more in insurance rates, in interest rates, in fees and related costs. You and I will be the ones hurt when, six months down the road, the proverbial can being kicked by the Obama administration comes to a grinding halt and the inevitable becomes reality.
One of these days, it must stop, it will stop, and it will either stop naturally when the money dries up, when our currency is worth barely more than the paper it’s printed on, when countries like China and the United Arab Emirates explain that, gosh, our credit and our money just isn’t good anymore, or it will stop artificially when Americans finally wake up and smell the malfeasance, the socialism, and the “change” we so quickly will want to forget.