From American Thinker:
For the past three and a half years, we have had to endure the nonstop whining of Barack Obama and his surrogates telling us over and over that he inherited the financial mess that required him to add trillions of dollars to the national debt, to run trillion-dollar-plus deficits for each year that he’s been in office.
Now he is telling us that he needs another four years and trillions more in money borrowed from China to complete the clean-up of the mess he inherited.
Well, for once, he nearly has it right. He inherited not simply a financial mess, but a historic financial disaster. Even the most virulent anti-Obama partisans will admit that Barack Obama didn’t directly create the 2007-2008 financial meltdown.
But Obama’s own claims that it was all the fault of his predecessor, George W. Bush, sounded a little thin the first time he uttered them, while now they appear remarkably transparent. The source of the financial crisis precedes Bush by a number of years, and like many landslides, it starts with a small pebble being dropped that starts the whole thing.
Looking backward through the historical record might help us decide just who provided Barack Obama with the financial legacy he has to cope with if it wasn’t Bush.
In 2007-2008, the major financial institutions of Wall Street found themselves holding hundreds of billions of dollars in so-called derivatives. And just what are derivatives? Derivatives are similar to stock, in that they indicate ownership of a share of an underlying asset. Usually, as we know, those shares represent partial ownership of a corporation. The corporation is valued based on attendant physical assets such as land, buildings, inventory, and such as well as intangibles such as patents. Toss in the value of the corporation’s receivables (net of liabilities), and bingo! — you have a value. At least you have a value for a corporate shell, if not a going concern. The value of the going concern, or market value, also reflects the value to investors of the skills of management, the financial strength of the corporation, and the profit that the shareholders expect to get as either dividends or capital appreciation if the market value of the shares of stock increase.