Any hoped for American economic turnaround must include the two critical components of removal of debt overhang from the American public and removal of devastating credit ratings from our businesses and citizens going forward. Without these two vital changes, neither of which are being widely discussed within the realms of national politics or proposed by our national leaders or perspective leaders, our nation will languish in recession for the next decade no matter what political options are ineffectively tried by the political party in control.
I have proposed that the federal government require banks to accept partial ownership of the U.S. housing stock in ways that will prevent the marking down of books and acceptance of losses from housing that would trigger catastrophic credit default swap contract provisions. This would cleanly eliminate America’s debt bubble that should not exist and should not be burdening our citizens or economy. It can eliminate the bubble without financial crisis and without causing the massive disruption of foreclosures and bankruptcies that may inevitably occur as we continue to unwind the bubble in slow motion.
I have also proposed the federal government require the three major credit rating agencies to implement a plan that would dramatically accelerate an improvement of credit for those companies and citizens that from this point forward practice good faith in repaying their debts. By removing in two years those credit flaws that would normally require seven years, America can return its citizens to their original positions of responsible debt management prior to this worldwide credit implosion.
Some have correctly responded to my proposals that Congress is nowhere close to collectively understanding or recognizing these critical components as necessary for recovery and that therefore, America is doomed to suffer through linear unsuccessful attempts at partial solutions, none of which will succeed in the absence of these two crucial components. They are right. A three legged stool will not stand when one of its legs is substantially shorter than the others. Therefore, if President Obama wishes his posterity to be remembered for boldly defending Americans from this economic crisis, he will need to muster the courage to use his powers of executive order and proclamation.
President Obama has the power to issue both executive orders to officers and agencies within the U.S. government and to issue presidential proclamations to those outside the government to affect the efficient implementation of American law. His written words will have the full force of law from a power granted directly to him by the Constitution.
Certainly, his actions are challengeable by the Supreme Court if they attempt to make law, rather than clarify or act to further a law put forth by the Congress or the Constitution but make no mistake, he has wide ranging powers that can be enacted to ease the way through an embattled Congress. Remember, FDR’s removal of Japanese and German Americans to internment camps, Truman’s integration of the armed forces, or Eisenhower’s desegregation of the schools?
US Presidents have throughout America’s history issued executive orders to instruct federal agencies to promulgate administrative regulations to circumvent the US Congress. US Presidents have issued executive orders calling upon federal agencies, such as the US Environmental Protection Agency (EPA) and the US Department of Energy (DOE), to amend administrative regulations. If this stonewalling appears to be 14 months of harm to America as our economy nosedives toward the 2012 elections, should this year be a year to test the power of the executive order in amending the Fed’s authority over our banking system?
President Obama also has the power of the presidential proclamation. He can declare the requirement of private industry to obey laws and regulations. He can define conditions that become legal or economic truth and his orders to those outside government will carry the same force of law as executive orders.
Remember George Washington’s Proclamation of Neutrality in 1793 or Lincoln’s Emancipation Proclamation in 1863? Recall Bill Clinton’s declaration of federal lands for national monuments or George W. Bush’s declaration of the areas affected by Hurricane Katrina as disaster areas. In this critical time of economic travail should President Obama not direct the rating agencies to prepare a plan for credit amnesty for our businesses and citizens that practice good faith repayment of debts from this point forwarded?
Be bold Mr. President and join FDR in protecting the next century of America’s prosperity. Use the powers vested in you by the Constitution of the United States to train the will of an unruly Congress on two critical needs of a suffering American economy.