James K. Galbraith: Obama's Biggest Mistake...

[Hissyspit]

http://www.alternet.org/story/148770/obama%27s_biggest_mistake%3A_selling_out_to_the_bankers

http://www.newdeal20.org/2010/11/05/obamas-problem-simply-defined-it-was-the-banks-26159

New Deal 2.0 / By James K. Galbraith

Obama's Biggest Mistake: Selling Out to the Bankers

The original sin of Obama's presidency was to trust bank-friendly economists and Bush carryovers, whose primary goal was to protect their own past decisions and futures.

November 7, 2010

- snip -

The original sin of Obama’s presidency was to assign economic policy to a closed circle of bank-friendly economists and Bush carryovers. Larry Summers. Timothy Geithner. Ben Bernanke. These men had no personal commitment to the goal of an early recovery, no stake in the Democratic Party, no interest in the larger success of Barack Obama. Their primary goal, instead, was and remains to protect their own past decisions and their own professional futures.

Up to a point, one can defend the decisions taken in September-October 2008 under the stress of a rapidly collapsing financial system. The Bush administration was, by that time, nearly defunct. Panic was in the air, as was political blackmail -- with the threat that the October through January months might be irreparably brutal. Stopgaps were needed, they were concocted, and they held the line.

But one cannot defend the actions of Team Obama on taking office. Law, policy and politics all pointed in one direction: turn the systemically dangerous banks over to Sheila Bair and the Federal Deposit Insurance Corporation. Insure the depositors, replace the management, fire the lobbyists, audit the books, prosecute the frauds, and restructure and downsize the institutions. The financial system would have been cleaned up. And the big bankers would have been beaten as a political force.

Team Obama did none of these things. Instead they announced “stress tests,” plainly designed so as to obscure the banks’ true condition. They pressured the Federal Accounting Standards Board to permit the banks to ignore the market value of their toxic assets. Management stayed in place. They prosecuted no one. The Fed cut the cost of funds to zero. The President justified all this by repeating, many times, that the goal of policy was “to get credit flowing again.”

The banks threw a party. Reported profits soared, as did bonuses. With free funds, the banks could make money with no risk, by lending back to the Treasury...

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[Skittles]

1. they got exactly what they wanted

[Catherina]

2. Rec'd but expanding the wars was an even bigger mistake imo n/t

[Mimosa]

4. Catherina, do you think 'expanding wars' is part of the job duties of an American president?

Caterina, it seems to me that the US is stuck in a war economy. And the reason we have a sucky economy is so that young people (up to age 40) will join the military for benefits.

[ThomCat]

6. Right now the military is carrying our economy.

Obama has to know that.

No wars, no economy.
No wars, all those vets onto the unemployment line.
No wars, Defense industries and contractors empty most employees onto the unemployment line.

Hell, one of the reasons Hawks are arguing to start a 3rd war with Iran is because it will supposedly boost the economy. I doubt that it would work, personally. But I do believe that a hell of a lot of our current economy is propped up by the military right now. I just don't think the military could be stretched any further, or that there is any economic benefit to doing it.

[Mimosa]

13. Wow, Thomcat, you're one of a few who see this the same as me

I've long thought these harmful, horrid wars are being prolonged to keep the American economy from the Great Depression, the Sequel.


And if all American manufacturing hadn't been shipped abroad since the early 80s, we wouldn't have become so desperate.

I look at old tools, lamps and things I own and find myself amazed at all the things once made in the U.S.A. which haven't been manufactured here in 25 years or more.

[KoKo]

20. Yep...without the Wars...unemployment would probably be 30% or

more and all those unemployed might start wondering about NAFTA, Deregulation, Demise of Glass-Steagall, and Outsourcing of Jobs in the name of Democratizing the World for Global Trade and Wage Parity.

And, those not in the Military or serving as "Private Contractors" are filling the "Privately Run Prisons." Add those prisoners and the Unemployed might go to 40% or more.

Interesting, isn't it.

[Catherina]

7. "There is enough for everyone's need, but not enough for everyone's greed." - Gandhi

I think we have a sucky economy because our whole economy is based on hype and we market illusions. or bullshit as Carlin put it. When the illusion starts running out, we just print more money to pretend there's nothing wrong with the system and send more young people off to protect our way of life.

Capitalism has no choice but permanent war because other people won't fork over their resources willingly so we can live in homes with 4 TVs, dishwashers and clothes dryers while they barely own a pair of shoes.

I moved out of the US recently and live in a country that we exploited for decades. We stole these people's resources with the complicity of their elite that enriched itself selling its fellow citizens down the river. When I see how the majority of people live so starkly, when the wealth was theirs to own, not ours to steal, I weep.

Have you read this book? It answers your question better than I ever could.



The entire book is online HERE or in pdf here http://www.arvindguptatoys.com/arvindgupta/addicted.pdf .

"The U.S. with 4.5% of the world's population, arrogantly plunders resources and cultures to support its American way of life. Addicted To War illustrates why the U.S is necessarily dependent upon war to feed its shameful consumption patterns.

Through all the phases of U.S. "Manifest Destiny," from the Appalachian Mountains and the Ohio River Valley to the Pacific Ocean, then to the entire globe, the evolving "national interest" has increasingly, and aggressively, sought for our "special deserving" one-twentieth of the world's population, a disproportionate consumption of the globe's resources that at times approaches one-half of what is available for all the earth's inhabitants. Exploitation is a given! There is no
possibility for justice if this unfair formula persists.

This voracious, mindless materialism can only be achieved through the use, or threat of use, of brute force. ...We are necessarily Addicted to War."

-S. Brian Willson, preface to Addicted To War

http://www.addictedtowar.com/book.html


It all boils dowh to what Gandhi said "There is enough for everyone's need, but not enough for everyone's greed."

[democrank]

3. "...and Bush carryovers."

[countrydad58]

10. yep.

[Greyhound]

5. K&R for another "nobody could've predicted" excuse.

This will be their legacy no matter what else they do in the future. Protecting thieves and forcing the American People to subsidize their own victimization.

[Nite Owl]

8. I heard this a lot from people

while canvassing. People wanted to see some justice and they didn't.
It was only one of Obama's biggest mistakes, the health insurance plan was seen as a gift to the insurers and not what people wanted.

[BurtWorm]

9. Painfully obvious.

PAINfully!

[GeorgeGist]

11. Nope; it's bigger than that.

But thanks for playing.

[GeorgeGist]

12. Nope it was bigger than that.

But thanks for playing.

[Kablooie]

14. THIS is where Obama's 'change' should have focussed on.

But he decided that no change was needed in financial leaders of our country.

He was wrong.

[JVS]

15. Is that scarface on the middle of the backpack?

[Kablooie]

16. No, it's Tony Montana.

[JVS]

18. those guys are friends?

[Kablooie]

19. Friends forever ... I guess.

[TexasObserver]

17. "The original sin of Obama's presidency was to trust bank-friendly economists and Bush carryovers"

Agreed.

When he formed his economic team, he revealed that he was going with the same bad thinking that got the cart in the ditch.

[JackRiddler]

21. Don't forget the Bush carry-over in Pentagon personnel and policy.