Soros: Obama's Econ. Policy Too Much Like Bush
Prominent billionaire, Obama backer has turned into a frequent critic.
June 30, 2009— -- One of President Barack Obama's most prominent Wall Street backers gives him high marks on just about everything except his approach to Wall Street.
Billionaire investor George Soros today said that Obama is "doing very well except in the recapitalization of banks and the reorganization of the mortgage market."
Soros, the chairman of Soros Fund Management, said he was pleased with the administration's handling of education, health care and global warming.
But, he said, "I'm afraid that it's too much continuity between the Obama administration and the Bush administration as far as the management of the financial system is concerned," Soros said this morning at a breakfast discussion hosted by the Wall Street Journal.
Soros also predicted that fears of inflation would drive up interest rates and "choke off" economic recovery.
Soros' early and vocal support of the Obama campaign hasn't stopped him from repeatedly criticizing the administration's work on the economy.
Although he was recently quoted as saying that the worst of the financial crisis is over, he reiterated his critiques of the White House today, saying that the Treasury Department, early on, should have served as an "underwriter" for the country's troubled banks, providing them with capital only if they couldn't raise it from investors.
Soros later told ABCNews.com that while that the government's recent program for a handful of major banks hewed more closely to his prescription, it comes "rather late." Following the government's "stress tests" on financial institutions, certain banks, including Bank of America and Citigroup, were required to seek additional capital from investors before seeking aid from the government.
Soros voiced support for what is often referred to as the "good bank/bad bank" solution.
He argued that each bank that was heavily loaded with so-called "bad assets" -- a term now commonly associated with investments related to defaulting mortgages and other loans -- should have been split in two separate banks: one that would focus on making the most of those bad assets and another "new bank" that could concentrate on other investments.
"I would have been very happy to put all my capital in the new bank," he said, adding that banks are doing "fabulously" on their new business.
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