On Fox News, Martha McCallum and Arthur Laffer, the father of supply-side economics, discuss Bernie Sanders’ 2020 campaign for the presidency.
Laffer despairs that if Sanders is elected, the market will crash. He compares the situation to the financial crisis in 2007, which he believes can be blamed on former President Obama.
“It’s much like Obama, who I believe was the reason why we had the Great Recession. As he got closer and closer to winning, the markets collapsed.
The crisis began under former President Bush and continued under Obama, who worked throughout his presidency to turn the situation around.
A lack of credit was at the heart of the financial crisis. Large banks who had suffered serious trading losses, especially regarding subprime mortgage bonds, would no longer lend to otherwise healthy businesses. This caused a rise in the cost of capital for American companies. This trickled down into layoffs, less investment, and lowered economic activity, which resulted in the Great Recession.
Watch the video here.