Obama's Presidency Isn't Too Big to Fail

A president has only so much capital to expend, both in tax dollars and public tolerance, and Barack Obama is dangerously overdrawn. He has tried to have it all on three fronts, and his administration is in serious danger of going bankrupt. He has blundered into a deepening quagmire in Afghanistan, has continued the Bush policy of buying off Wall Street hustlers instead of confronting them and is now on the cusp of bargaining away the so-called public option, the reform component of his health care program.

Those are not happy sentences to write for one who is still on the email list of campaign supporters urged to back the president in the face of attacks that are stupidly small-minded. But to remain silent about his errors, just because most of his critics are so vile, is hardly an example of constructive concern for him or the country.

Yes, Obama was presented with a series of crises not of his making but for which he is now being held accountable. He is not a "socialist" who grew the federal budget to astronomical proportions. That is the legacy of George W. Bush, who raised the military budget to its highest level since World War II despite the end of the Cold War and the lack of a formidable military opponent -- a legacy of debt compounded by Bush's decision to first ignore the banking meltdown and then to engage in a welfare-for-Wall-Street bailout. And it was Bush who gave the pharmaceutical companies the gift of a very expensive government subsidy for seniors' drugs.

But what is nerve-racking about Obama is that even though he campaigned against Bush's follies he has now embraced them. He hasn't yet managed to significantly reduce the U.S. obligation in Iraq and has committed to making a potentially costlier error by ratcheting up America's "nation-building" role in Afghanistan.

Just as he was burdened with the Afghanistan situation, Obama was saddled with a banking crisis he didn't cause, and the worst that can be said of his attempted solutions to the financial mess is that they were inherited from Bush Treasury Secretary Henry Paulson. But Obama, who raised questions before his election about the propriety of a plan that would rescue the banks but ignore the plight of ordinary folks, has adopted that very approach as president. He elevated Lawrence Summers and Timothy Geithner, the two Democrats most closely aligned with Paulson's policy, to top positions in his government.

Obama's proposed new regulations, while containing some kind words about better informing consumers, do not portend any breakup of the "too big to fail companies" whose problems were permitted to fester by previous deregulatory measures. His answer is to increase the regulatory capacities of the Federal Reserve, which failed to use its already existing and considerable powers to avoid the debacle.

The promise is that next time the Fed will behave better. As Obama put it Monday, "So our plan would put the cost of a firm's failures on those who own its stock and loaned it money. And if taxpayers ever had to step in again to prevent a second Great Depression, the financial industry will have to pay the taxpayer back every cent."

Why not now? And why has he accepted the Wall Street line that all this represents a "collective failure," as if the con men and the conned had equal responsibility? According to Obama, "It was a failure of responsibility that led homebuyers and derivative traders alike to take reckless risks that they couldn't afford to take. It was a collective failure of responsibility in Washington, on Wall Street, and across America that led to the near-collapse of our financial system one year ago."

Hogwash. The chicanery of the financial system, securitizing highly suspect mortgages, was codified into laws that made the hustle legal.

That insistence on equating the swindled with the swindlers is also what is wrong with the evolving health care reform plan. The assumption from the beginning, when Obama reached out to insurance companies to come up with a deal, was that they had the interest of their customers at heart. They don't, and it is the purpose of government regulation in the area of health as well as banking to even the scales between the powerful corporations and the consumers from whom they profit. That is the purpose of a public option worth its name.

Without a government program as a check on medical costs, Obama will end up with a variant of the Massachusetts program, one that forces consumers to sign up with private insurers and costs 33 percent more than the national average. He will have furthered the Bush legacy of cultivating an ever more expensive big government without improving how the people are served.

 

 

Comments

[sposton]

I agree completely. He is infinitely more disappointing personality than Bush ever was. Yes, he is infinitely better than Bush, stylistically. He's raised reasonable expectation in millions and is now politically sustained mostly by propaganda and political trickery. Sooner or later the majority of those who had voted for him will realize they have been charmed and duped by pretty words and eloquence.

[twofish]

"The promise is that next time the Fed will behave better. As Obama put it Monday, "So our plan would put the cost of a firm's failures on those who own its stock and loaned it money. And if taxpayers ever had to step in again to prevent a second Great Depression, the financial industry will have to pay the taxpayer back every cent." Why not now? "

Ok, Junior. You burned down the house, ran over the dog and the neighbor, trashed the garden and the koi pond, and totaled the car against a hundred year old oak tree...

You know, if you ever do this again, you're going to be in real trouble.

Right on, Robert.

[joejoe21]

sad but true. more reasons to investigate BushCo. for ruining our country. Also - everyone should read Scheer's book: Pornography of Power.

[unionave]

After reading this I feel extremely depressed and have come to the conclusion that Rush is a very good prognosticator .

[terramartom]

Right on the money!
Of course the President is a nice guy, good husband and kind Father, but we voted him into office to push the country away from the racist, bigoted, intolerant right, and instead push left of center which actually means, for the benefit of the people, and not Corporations.
The President is looking limp now. The Democrats are acting limp now.
In the face of overwhelming chances of victory, with the number odds in their favor, the Democrats will settle with loss!
Holy Crap.

http://richmonk31.blogspot.com

[tompoe]

Personally, I'd like to hear a rational explanation for Obama's need to dump billions of dollars every month in the hands of bankers, and not place a moratorium on foreclosures to stop the bleeding, while the banks stabilize. I'd like to hear a rational explanation for Obama's need to dump billions of dollars every month in the hands of bankers, and not initiate Big Deal jobs programs to stop the bleeding of the unemployed.

How can a bank loan money to unemployed? How can a bank loan money to foreclosed homeowners? If I didn't know better, I'd say the banks want to see 100 million unemployed workers, and 100 million foreclosed properties in order to focus taxpayer dollars on their own personal wealth generating world. Can we continue to call Obama an unwitting co-conspirator? For how long?

[WeMustSpeakOut]

Co-conspirator - absolutely. Unwitting - hardly.
None of this is happening by accident.

[berkamore]

I was one of Obama's volunteers, love him and really hope he will succeed.

Like the author, I don't think Summers and Geithner should have been on his team because they had a hand in dismantling the Glass Steagall Act under Clinton and that put us in the mess we are in right now.
Personally, I think Paul Volcker should have an enhanced role in that administration because he is not afraid to make unpopular decisions and somebody had to rein in Wall Street.

Has Obama failed? I think it is too early to tell but I will say this: I sure hope he knows what he is doing.

[roudy]

I know it has only been about eight months, but I have to give him a C- so far.

[jmpurser]

If you grade him in a class with the Republicans then yes, you could call it a "C". On his own, without the Republicans to skew the curve he's failing.

[ECJLA]

The problem and solution are both clear. The country is in a crisis derived from from its lapse from a reasonably egalitarian society into one beset by extreme inequality and various aberrancies associated therewith. The Democratic Party long ago became part of the problem, and no part of the solution.

Democratic Party ideals as defined by FDR in 1936 - 1945, by Lyndon Johnson domestically in 1965 and as recently as 1972 by George McGovern are gone with the wind. (And even if they were readopted with full force, they would barely suffice as a conscionable political orientation for our country given the plutocratic state we have devolved into.)

The Democratic Party has been thoroughly captured and corrupted by financial elites just as hostile to egalitarian, social democratic public policy as the Republican donor class.

What is required is the founding of a new pro-equality political party committed to redistributionist policies that keep wealth inequality within reasonable bounds. The means can be as simple as reinstatement of tax rates on the upper income earners that prevailed in the 1950s (90% for the highest brackets) or preferably something more ambitious and enduring such as a Constitutional amendment worded to permanently ensure that wealth inequality will never again approach the obscene levels of today.

Extreme inequality in the 21st century is the moral issues equivalent to slavery in the 19th century. Where are the new abolitionists? Where is the next Abraham Lincoln?

Eric C. Jacobson
Public Interest Lawyer
Culver City, California

[TRex86]

Strong post. The root cause of all this is our electoral system. As long as the political process is nothing more than an auction for the services of candidates money will equal political power. Power and wealth will continue to concentrate in the hands of the few that contribute to campaigns. Public financing and equal access to the broadcast media will lead us back to true democracy and turn out the plutocrats. It might even lead to electoral contests waged based on competing ideas rather than fear-mongering and hysteria.

[ECJLA]

TRex86:

In an old legal expression, "Yes, but."

Almost all incumbent officials and candidates fielded by the two major parties would indeed be unelectable if the electoral system weren't rigged in the manner you suggest. They could not compete against earnest qualified advocates for the public interest and "general welfare" (particularly of "everyday people" and the less fortunate).

But expecting the two parties and their entrenched personnel to self-destruct via mandated "public financing and equal access to the broadcast media" is "waiting for Godot".

A mass exodus into a new pro-egalitarian political party by tens of millions of fed up grassroots Democrats (ala the Republicans' succession of the Whigs in the 1850s) would be inherently newsworthy and could not be ignored by the media. (No mass movement can be.)

A new pro-egalitarian party could and should fund-raise from all who believed in and supported its creed and platform. Hopefully the Supreme Court (in Citizens United v. FEC and sucessor cases) will eliminate on First Amendment grounds all limits on donations to parties and candidates. They are plainly unconstitutional except for laws mandating full disclosure of the identity of donors.

In concert, a few multi-millionaries of conscience and legions of small donors could put a new pro-egalitarian political party into position to get its public interest message out and prevail electorally in a few years time.

As Lincoln said, this "must needs be."

Eric C. Jacobson
Public Interest Lawyer
Culver City, California

[tsobserver]

Well said. Likley to fall on deaf Democrat ears and blind Republican eyes. Insurance companies do not exist to serve their insured. They exist to make money for their shareholders. Large healthcare providers exist to do the same. There are some nonprofit exceptions, IHC in Utah mentioned by Obama in his speech, for example.

But nobody in government forced IHC to be nonprofit. And yet, they charge every paying and insured customer everything they can in order to make sufficient "reserves" (can't call it profit) to serve the thousands of charitable cases they take on every year. This is a good model, but government had nothing to do with it.

If Congress could find a way to encourage more nonprofit competition (even propping them up a bit more than their tax free status does already), perhaps you'd see some changes in the for profit market too. And government and taxpayers would have to do very little to make that happen.

[treboi]

I think this article is a failure...­sorry...ne­eds to be said.

[Winning09]

Typical blather.

[KDog76A]

typical head in the sand...

[robbep]

Obama the hope that killed hope. He was the wrong man at the right time and now all we can do is hope his healthcare bill does not become law. He is eagerness to pass a law that benefits the insurance companies over the citizens is criminal and hopefully the dems wont go over the cliff with him. He is just another pretty speech with no real leadership skills. Cant wait to see him lose in 2012. And yes I did vote for him and go door to door to help him win boy was i mistaken.

[PlaceboStudman]

Obama's presidency has failed already for many of us. There are many thousands if not millions of us who put our hopes, and dreams, and very lives behind Obama and his promises to reform Health Care, only to be hoodwinked when the topic suddenly changed from Health Care to Insurance. No longer do we discuss disease or medicine of any kind, now it's ALL about the money. People are more afraid of going broke than they are of dying. Otherwise we would be talking about actually improving medicine and techniology, not just make the medicine and technology we currently receive cheaper

[bbkenn92]

Wow, you guys gave him only 8 months WTF???? I didn't have such high expectations, and he's already brought in so much change that we don't even remember like the Lily Ledbetter Act, to name one, among many others. He can't do this all by himself. He has a Congress to deal with and that is the branch that makes laws.

You guys were bound to be disappointed because you expected him to do it all by himself. I only just became an American citizen after living here ten years, and working after I got my green card 7 years ago, and maybe because I've lived elsewhere, I did not expect this at all.

Although he's not perfect, he's doing a way better job than anyone else out there. No one gets everything they want. Do I wish he could have already done more than he has, sure; but he's already done more in the past 8 months than Bush did in 8 years.

I think you should be more patient. You should be writing to your congressman/woman if you want changes that only Congress can bring about. Maybe, too, you should study how laws are made and understand that there are alot of Democrats who are blocking Obama from making changes he wants to do, not just Republicans.

[PlaceboStudman]

Thank The Powers That Be that we live in a constitutional representative democracy and not a dictatorship.

Independant's will rule in 2012, and 2016!

No more of the same old same old crap from the same old same old politicians on both sides of the aisle who don't know how to at least be honest with the people they govern

[olephart]

Just as in 2008, the MSM will be the gate keepers for the candidates. Only those deemed "acceptable" will get air time and noticed. Your choices will be decided for you. The moneyed interests will crush any outside challenge. Ours is now a corporatocracy.

Even now the fools on the right are diverted from their rightful anger of a system that cheats them onto the skin color of the President. Policies that actually are to their benefit are demonized because of who has put them forth.

The left has been disillusioned by their best hope scurrying to the center, abandoning the principles he once extolled and partnering with the hyenas on Wall Street and the vultures in the Pentagon.

[twofish]

Right. When it was down to Hillary or Obama, I knew the corporations would stay firmly in control.

[WeMustSpeakOut]

Unfortunately in reality - our constitution has been duly discarded, we are not represented, and this is not a democracy. Our rights and liberties have been usurped, the media is corporate/­government owned, and we are being looted into poverty.

We absolutely have to collectively act long before 2012 if we are ever to rip the control of us and our country away from the true monied power that call the shots.