I neither like nor trust Barack Obama. I am not saying this at the start in order to attack the man, but to admit that I find him singularly unqualified for the office he has won, his popularity notwithstanding. Given the present set of crises, the nation needs a man who understand how the economy works, and a man who has personal experience with business, especially large-scale business. I agree that President Bush has not accomplished everything that I wanted from him, but at least his MBA from Harvard was evident in many of his actions and decisions. Lawyers, where business is concerned, are best known for a mixed bag – at best they can put much-needed protections in place, but far more often they suck the life out of innovation with red-tape, special-interest bias, and meddling to gain their own advantage. It’s too soon to say which camp President Obama will belong to, but the need for watchdogs on the next White House will be greater than the ones in place now.
On reflection, though, it is inevitable that lawyers will have a lot to say about the mortgage, bank, and automaker crises. Near as I can see, the basic decisions will be as follows:
MORTGAGE: There are three basic types of mortgages in trouble; mortgages where the homeowner simply got into financial trouble which may be blamed at least to some degree on the economy, mortgages which were ill-advised but not fraudulent, where restructuring the terms are likely to improve the repayment of the debt, and deals which frankly should be allowed to fail.
BANKING: Like the mortgages, the key interest should be to protect the innocent. Auditors must determine whether the funds handled were fully disclosed in terms of risk, and what sorts of intervention may be utilized which will effectively improve liquidity and investor confidence while addressing bad debt.
AUTOS: The most simple, yet difficult, mess to sort out. Save the jobs, but do not reward the corruption or the incompetence.
To me, no lawyer can produce the answers needed solely through legal expertise. It will take a successful businessman, or rather the combined wisdom of many successful businessmen to make that happen. It remains to be seen whether President Obama will understand this fact, or whether the image and self-serving rhetoric will continue to be the norm.