(Moneynews).The Obama administration is using the same naive playbook the Bush administration used, says Greenlight Capital fund manager David Einhorn.
"The basic strategy appears to be to try to bring us back to 2006 by propping up asset prices and re-inflating the popped credit bubble while hoping for an economic recovery," Einhorn told attendees at the recent Ira W. Sohn Investment Research Conference.
"President Obama and the policymakers are not stepping up to the plate, but are instead trying to stretch things out in the hope that time will solve the problems."
Einhorn says the White House has adopted an attitude that "what's good for the banks is good for the economy," setting in motion a plan by which big banks are buying time rather than restructuring their bad loans.
As a result, companies and consumers with too much debt refrain from hiring, spending and investing."Forbearance has not stopped people from losing their jobs or prevented asset prices from falling; it is delaying the recovery," Einhorn notes.
The most significant and measurable failure of the economic stimulus package is its inability to quickly create jobs, says 24/7 Wall Street’s Douglas McIntyre.
Unemployment is almost certainly getting worse at a faster rate than the Obama administration expected when it proposed the bill five months ago, McIntyre points out.
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