Barack Obama Is Doing My Job; Why America Needs Him to Do His

When it comes to dealing with Wall Street, President Obama seems to have traded in his position as our economy's commander-in-chief for a different role: pundit-in-chief. He and his top advisors are suddenly very big on urging, advocating, recommending, strongly suggesting, and cajoling.

During his weekly radio address, which focused on the need to get America's banks lending to small businesses again (wasn't that the reason we bailed out the banks in the first place?), the president declared that "it's time for those banks to fulfill their responsibility to help ensure a wider recovery, a more secure system, and more broadly shared prosperity." But "it's time for" is the kind of thing we pundits say: "It's time for the banks to do this and that... It's time for Congress to do this and that... It's time for the president to do this and that."

Then the president laid out his plan of action: "We're going to take every appropriate step to encourage them to meet those responsibilities."

Encourage them? How about make them? Columnists and bloggers encourage. Presidents execute. It's in the job description. Hence: the executive branch.

But when it involves America's banks, the White House all-too-frequently sounds as if it's just an innocent, helpless bystander -- and we get declarations like the one David Axelrod delivered on This Week: "We have limited sway other than moral suasion with some of these [banks]."

Is moral suasion really all we can do?

And take this attempt by Robert Gibbs to show that the administration realizes that talk isn't enough -- while failing to realize that just realizing that talk isn't enough is, in fact, also not enough.

"This is not hope," he said at a daily briefing. "This is more."

He continued: "I think the president... has extremely strong views on this topic, on the topic of lending. And I think we hope that the actions of the bank will be demonstrated."

So I guess sometimes it's actually not more than hope. And as for Gibbs' comment that the president has "strong views": again, I have strong views. The president has the power to turn strong views into transformative policies.

And even when the president does move from hopes and views to actions, the actions he chooses are less than muscular.

Take the aforementioned central question of how to get banks lending to small businesses again. During his radio address, the president lamented the fact that "too many small business owners are still struggling to get the credit they need. These are the very taxpayers who stood by America's banks in a crisis -- and now it's time for our banks to stand by creditworthy small businesses, and make the loans they need to open their doors, grow their operations, and create new jobs."

So what does President Obama intend to do about it? He's going to (wait for it)... convene a conference.

"I've asked Tim Geithner and Karen Mills," the president announced last week, "to convene a conference in the coming weeks that will bring together regulators, congressional leaders, lenders and small businesses to determine what additional steps we can take to get credit flowing to small businesses that want to expand and create more jobs."

Convene a conference? You hear that small business owners? Your problems are about to be solved, because the most powerful person on the planet is going to "convene a conference," which means selecting the conferees, picking the location, handing out press releases, writing reports and then, my favorite part, ignoring the reports and patting each other on the back for a job -- or conference -- well done. I'm sure executives up and down Wall Street are shaking in their loafers.

Of course, we all know that in Washington-speak "I'm going to convene a conference" is somewhere up there with "I'm going to establish a blue ribbon commission" in terms of kicking an issue down the road.

Because if this were really a high-priority for the administration, it could, you know, actually do something about it. Right now. The executive branch has plenty of weapons at its disposal to force banks still dependent on billions of dollars in taxpayer funds and guarantees to change behavior (yes, including Goldman Sachs, which still has $21 billion in FDIC guarantees).

For starters, the president controls who runs the Fed. Instead of just giving Ben Bernanke the green light for a second term, he could have made it contingent on forcing Bernanke to open up the Fed to full transparency. In fact, there is a proposal for an audit of the Fed in the House now. It is, not surprisingly, being fought by the Fed. And the White House is silent on the subject.

The president also has the power to make other key appointments, including the head of the Office of the Comptroller of the Currency (who supervises the nation's commercial banks); the head of the Federal Deposit Insurance Corporation; the head of the Office of Thrift Supervision (the primary regulator of savings and loans); the head of the Securities and Exchange Commission; and the head of the Commodity Futures Trading Commission (which oversees derivatives).

He also controls who runs the Treasury Department -- which, believe it or not, is not legally mandated to be overseen and staffed by former Goldman Sachs executives and their friends. And there is nothing in the Constitution that says the Treasury Secretary has to be in near-constant contact with the heads of Goldman, Citigroup, and JP Morgan, often taking their calls late at night.

And then there is the president's power to regulate. There are currently a number of proposals making their way through Congress to reform our financial regulatory system. And they all have something in common. Loopholes and exemptions. And lots of 'em.

For example, in an editorial on Sunday, the New York Times said that two bills looking to regulate derivatives, which have passed out of committee, are "weak and unlikely to prevent another fiasco" and "carve out far too many exceptions," while another derivative-focused bill "denies regulators powers they need to fully police the market."

Meanwhile, the fundamental structural problems that led to the collapse are still not being addressed. A sense of urgency and crisis was exploited when it was useful in persuading taxpayers of the need to bail out the banks. But now that the banks are no longer in crisis -- and it's just the rest of the country that is in trouble -- the sense of urgency has faded. Because nothing says lack of urgency like "convene a conference."

Elizabeth Warren sums it up ominously: "All the things we were talking about that were serious, serious problems for the financial institutions seem to me are still serious, serious problems."

And Neel Kashkari, the former overseer of the TARP program under Bush, knows a lack of change when he sees it. "I think that the way that a Democratic administration talks about certain issues is probably a little different than the way a Republican administration does, and that's appropriate," he said. "But the substance of the actions, I think, are very consistent, and that's been important."

Important for Wall Street. And tragic for the rest of us -- both in terms of what hasn't been accomplished, and in terms of how much more misery it will lead to down the road. Misery that is avoidable -- if only Barack Obama would stop acting like a pundit, egging on change from the sideline, and start acting like the president, dictating the game from the middle of the field.

If you have additional information regarding where the Chamber of Commerce receives its funding, email [e-mail].

On Friday, I'm taking part in a debate that will be broadcast on C-SPAN. Howard Dean and I will be crossing rhetorical swords with Dick Armey and John Kasich on the question "America's Future: Can Capitalism Survive?" The event will be moderated by Joe Scarborough. I plan to make the point that what we have right now is not actually Capitalism -- it's Corporatism. It's welfare for the rich. It's the government picking winners and losers. It's Wall Street having their taxpayer-funded cake and eating it too. It's socialized losses and privatized gains. I'd love to hear what other points you think I should make. Click here and leave me your suggestions in the comments section.

 

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Comments

[freecitizen1946]

Wall Street has just affected the biggest heist in history. Aided and abetted by their fellow conspirators at the Federal Reserve, in Congress and at the U.S. Treasury, they walked away with unspecified trillions in cash and debt obligations now pond off on the American people. They did it in broad daylight completely devoid of moral character or even the pretense of civic responsibility. If we expected something in the way of humility and gratitude from these folks forget it. They continue to reward each other and pat each other on the back with record bonuses and declarations of record profits.

In a recent U.S. Treasury note auction, there was so much newly invented Federal Reserve money choking the big banks that they elected to buy these notes and pay for the privilege. In other words these large federally subsidized banks consider Treasury notes with a negative interest rate to be a better bet than investing money in the American economy.

Our so-called health care “debate” has largely been conducted within the limiting terms and conditions dictated by Wall Street. It has effectively become their public demonstration to the American people of who is really in charge. “Abandon all hope yee who enter here!” should be the inscription above the capitol door, for there is no possibility of real reform coming from a government owned and operated by and in the interests of a powerful few.

[swkidder]

Arianna: I'm late to read and comment, but 2 things come to mind.
1) We throw out the term "human capital" without explicitly recognizing that there are 2 sets of shareholders in any company - those whose equity comes from capital contributions, and those whose equity comes from the contributions of their labor. Another way of saying this would be, capital is to labor as oil is to ancient sunlight - the one being the product of the other and the evidence of its existence.
2) Lately we've also heard the financial pundits lamment the decline in the productivity of (financial) capital. They forget - too easily - that the level of employee motivation and engagement in any company has a huge effect on productivity, and therefore the actual productivity of the human capital and the calculated productivity of the (financial)capital. When people feel safe, valued, and heard - they put their shoulders to the wheel and their intelligence and creativity to the mission in ways that are difficult to quantify. What industrial psychologists and sociologists do know is that their productivity soars. What I believe you've noted in a previous post, is that when people are ruled by fear the shut down the creative, logical and "higher order" kinds of cortical thinking - and revert to reptilian hindbrain survival thinking. It's not hard to figure out how this affects the productivity of capital.

[SPYWITNESS]

Unfortunately, REAL CHANGE comes slowly and progress is made in baby steps, changing neanderthal mindsets doesn't occur in giant leaps! The cesspool inherited by the BO Admin is so deeply entangled, and damage control is apparently not fast enough for those non-believers in the greater good. The sleazy & greedy financial capitalist gnomes, and those who wore blinders while the middle class was being enslaved by debt and lies, have escaped prosecution by running for cover with the Republican party. Many still do not have the best interests of the American People at heart, they just want their agenda to win at any cost! Why does the rest of the World believe in BO recipes for improvements and global insights? They have voiced their approval consistently, and so do I!!! "Oh ye of little faith".

[Hunt555555]

Bush and the greedy Repubs has put America so deep into mess,that they hire FOX and other dufus to pass the buck on Obama in less than one year. Smart voters knows better. only a few dummies buys into this nonsense. Obama2012 for a greater America.

[unfoxworthy]

Arianna,
thanks for the cynicism!
If the LINES [emanating from Obama's appointees] weren't so depressing,
- the TARP (goodness)
- the Goldman (success story)
- BoA bonuses (being legal and ethical)
- "Too Big to Fail" (shucks, I guess they weren't BIG ENOUGH yet to claim THAT yet)
this would all be SO comical!

[SCrae]

I really don't know who you are a pundit for, but yourself. It is all about what will make you the most money, not about what would help the US. Your always plugging your latest book, etc. Criticizing the president is not being a pundit for the left. The more you tear him down, and you are on TV contantly whining, the more it hurts us in the long run. It is dishonest.

[wheresthetruth]

Arianna has been catching flak lately for speaking out. I for one, am glad she is.

We rightfully condemn the apologists who make personal attacks against anyone critical of Bush.

But you know what? There seems to be quite a few of those types on the the other side.

[pajoly]

President Obama is becoming a paper tiger, and even then his roar is but a meow, his claws little more than hang nails.

[morganhoyle]

"it's time for our banks to stand by creditworthy small businesses, and make the loans they need to open their doors, grow their operations, and create new jobs."

I think this is the main problem. Most of the businesses aren't "creditworthy" just look at what happened with Freddy and Fanny. When the government forces lenders to give money to people that can't pay it back, it all ends the same way. The trickle down system will NEVER WORK!

We should have just divided all the money up and given it to the businesses, if we're going to throw money away that's my vote. We'll never see a penny of the money we gave to the banks.

[GMOtears]

Obama is just a symbol about change to come, it's going to be 10-20 years down the road for real change.

Until the baby-boomers die off nothing will really get done. All the bank/health/big corporation business lobby has owned Wash DC for the last 40 years. It's a start maybe in 12 years we can have Green Party president and these crooks in congress and the senate will be gone! I hope Dennis Kunicich stays forever, he's only real American Patriot in there. fighting for good of humanity and the planet.

[panamajohnny]

Obama has been smothered by the financial and medical lobbies and can not be depended on to do the right thing, as his appointments of Summers and Geithner illustrate. He stopped being our guy when he got into the pockets of the corporations, as did most of the Congress. All we can do now is vote out the incumbents at every opportunity.

[RudyHaugeneder]

Next time vote Green Party and you will have truth in politics.

[sandman323]

Vote Green Party and you'll have Sarah Palin in the White House. Great idea.

[profproof]

Yea, the gov't forcing lenders to give mortgages to people who couldn't pay for them turned out great didn't it?

[sheilaofmiami]

I read I am in good company. I voted for him, hoped for change and now I wonder what happened to Obama.

He is so busy trying to build consensus that he sells himself out. And us with him. He has caved 100% of the time to pressure, and not much pressure, in hopes of making all of the people happy all of the time. Go back and read Abe again, it is FOOL SOME OF THE PEOPLE ALL OF THE TIME AND ALL OF THE PEOPLE SOME OF THE TIME, BUT YOU CAN'T FOOL ALL OF THE PEOPLE ALL OF THE TIME.

Start being a real President, or we will have to try again sooner than later. Elections happen in this country.

[GMOtears]

Dennis Kunicich was the only real loving soul out of the Democrats. Everybody else has been bought off Obama, hillary, etc. all puppets.

[Jacksonian]

Which one of us isn't paying attention?

He has embraced Bush's surveillance tactics; he has expanded illegal detention; he has refused to authorize torture investigations.

He has put Wall Street in charge of the Treasury Department; he has permitted excessive bonuses and executive pay; he has offered no serious regulatory reform of our financial markets; he has not provided effective mortgage relief; he has backed corporations over the people.

He has waffled on the public option; he has sold out to pharmaceutical companies; he has conducted health care reform in an opaque fashion; he has put the concerns of Olympia Snowe and Joe Liberman ahead of his constituents; he as engaged in a pointless, self-defeating exercise in bipartisanship with a party that is out of power, generally marginalized, and fading fast.

He has escalated troop deployment in Afghanistan; he has failed to close GITMO; and he has procrastinated in ending "Don't ask - Don't tell."

In short he's been less about change than he has been about typical Beltway politics.

I voted for him too. I cheered his historic election. I find him, his family, even his dog, immensely likeable. But I never liked Kool-Aid, don't wear rose-colored glasses, and refuse to cede my right to independent thought.

I'm not looking for a magic wand. I'm just looking for the guy I helped to elect.

[wheresthetruth]

You wrote what I was going to write.

[Emmory]

Finally some of you are seeing what is going on here!
This is exactly what I was worried about when everyone was so gung ho to get Obama elected.

He has no answers now because he never has in his entire political life.
This will not change...
He will not change...

We need to all wake up and start thinking clearly and logically about all the problems we face both in the rest of the world and here at home.

Guys like Obama and Bush will not take care of us.
They never have.

[LaSirene]

Amen. Took the words right out of my mouth.

[yourmonscalling]

This is the perfect description of what there doing NOTHING !!
Thanks to whoever wrote this telling the truth