Top economist: Obama ‘missed opportunity’ to reform financial system

[babsbunny]

http://rawstory.com/2009/10/top-economist-obama-missed-opportunity-to-reform-financial-system/

By Daniel Tencer
Saturday, October 10th, 2009 -- 9:34 pm

The Obama administration "refused" to take meaningful steps to reform the banking system in the wake of last year's financial crisis, and the opportunity to do so has now been missed, says a former chief economist for the International Monetary Fund.

Simon Johnson told PBS's Bill Moyers that he expects an even larger financial crisis to hit the United States in the coming years because the system was not fixed through reform, but rather through a massive injection of taxpayers' money into the failing banks.

[OHdem10]

1. I have other comments which indicate a W instead of the usual V

Recovery. A double dip extended recession.

This is what happens when a President sticks with the Centrists
Pro-Business as his primary advisors. Leaving Wall Street in
charge of the country is no change. In fact, they are up to
their old tricks. Brace yourself America.

[Name removed]

24. Deleted message

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[AllentownJake]

26. Nationalize the banks

Clean up their books and recapitalize them under the regulations of the New Deal.

Socialism isn't the answer entirely. A society exist best in a Hybrid of socialism and a capitalistic society.

Neither system provides the answer for every problem, however telling people one system is good for somethings and another is good for another is too complex these days.

[Name removed]

30. Deleted message

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[AllentownJake]

32. It worked pretty well for 40 years

Until the New Deal was attacked by the conservatives. No ism is the answer to all the world's ills.

I prefer Capitalism in manufacturing to the Socialist model. I prefer Socialism in the Healthcare delivery model.

Marx was correct in some of his criticisms, however pure socialism is as much as a failure as pure capitalism.

[Name removed]

34. Deleted message

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[AllentownJake]

36. China is not a socialist country

It hasn't been in 40 years. If anything China is a Fascist Country. It also is a dictatorship which prevents its people to have self determination.

Russia didn't exactly do that great with their experiment.

You can't tame human nature to trade. All you can do is put regulations on it.

[Name removed]

37. Deleted message

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[AllentownJake]

38. I'd prefer to live under the Tyranny of 1000 Richmen

Than one oligarch. Thanks.

[Name removed]

39. Deleted message

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[AllentownJake]

40. I'd rather live under Bush/Cheney

Than the Chinese Government or the Russian Government from 1917-1991.

[Name removed]

42. Deleted message

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[Greyhound]

45. In spite of being a devout anti-capitalist, I have to point out that China's "communism"

is no more Communist than the Nazi's were Socialist. Furthermore, the prosperity of the Chinese is the result of corporations, mostly American, pouring money stolen from us into their country for 30 years in order to create their new feeding ground.

If you think capitalism is America is bad, just wait until they really get going in a totalitarian slave state like China.

[Name removed]

31. Deleted message

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[sendero]

2. This guy is exactly right..

... and more and more people are figuring it out. Doesn't bode well for a second term IMHO.

[elias7]

17. And how do you know this?

[Subdivisions]

21. Perhaps the question should be...

how do you NOT know this?

[elias7]

41. My point is that it is not so simple as, "this guy's right, this guy's wrong"

The opportunity to allow complete upheaval with destruction of the existing system and true revolutionary reform of the financial system was missed. But, that would also have meant Great Depression and Great Pain for most of us right now. And years to find our way back. Would that be preferable? Perhaps, perhaps not.

I disagree that it is too late. Reform will happen and it will be incremental; it would be political, socially and financially foolish to do this precipitously. Short term solutions stop the hemorrhage, but it is the longterm choices that heal the body. As one person wrote, "we need to forge a climate of responsible stewardship, put it into place and monitor it exhaustively, with very strict standards".

The impatience with Obama at DU stupefies me. With the financial situation, health care, the wars in Iraq/afghanistan, gay/lesbian issues-- if there's no about face overnight, it's a let down, a broken promise, a betrayal. IMO, I believe Obama will prove to be revolutionary, but the changes will be so methodical, measured, and subtle, that we may not realize it happened until we turn around in 8 years and see how hasty our judgments were.

[Subdivisions]

44. I admire your optimism and I hope you are right. I fear, though, that

we will be disappointed.

[AllentownJake]

51. I'd buy that argument

If it weren't for the fact that his team includes: Larry Summers, Tim Geithner, and Ben Bernake. I guess if he found a way for Paulson to stick around and keep Greenspan in the loop somehow that he could be worst.

The very architects of this financial calamity are sitting in the halls of power organizing the recovery? That is bullshit.

As far as the depression is concerned. Giving 700 billion dollars to save bloated financial systems that do nothing to benefit the real economy saved absolutely nothing. Stop being so naive to actually believe that if these guys disappeared the world will end.

The biggest highway robbery in the history of the world has been committed and the cops who were bribed to turn the other direction, weren't fired they were fucking promoted.

[AllentownJake]

25. Because I have the ability to read

and not just sit in front of the TV and listen to what the Main Stream Financial News reports.

The economic data does not look good, 34 banks did not pay their TARP payments this month, and Goldman Sachs paid their payment with trading money.

[fasttense]

3. I have always had problems with commenters that say, "you only have one chance to fix this

and then it's over." There are always further opportunities down the road. True, some people may ignore every opportunity, or at least not noticed the new opportunities. But, there is rarely simply one chance to fix a process, unless failure to fix it results in death, and even then it may still be possible to fix the system for others.

Remember when the Clintons tried to repair our broken health care system? And now we have another chance.

When organized crime (working with the KKK and the FBI) murdered JFK, MLK and Bobby Kennedy, they thought they had stopped the civil rights movement. But they didn't.

As long as there is a will there is a way.

[AllentownJake]

4. More people are going to be hurt

We will go through a minor recovery and the crooks will crash the car again. They were on their knees and the President picked them up with no pre-conditions.

[Autumn]

19. Not only were they picked up,

we were knocked down. I don't have enough time left for my 401K to ever recover.

[AllentownJake]

22. Agreed and the lack of indictments

and justice for the hard working middle class is a failure of the administrations Justice Department.

[Subdivisions]

23. You're not alone re: 401K... n/t

[sendero]

6. Let put it another way...

... the BEST chance to fix this has already passed. Now, more damage has been done.

Based on Obama's economic team and policies I don't expect him to do the right thing EVER.

And, I expect a growing anger in this country as more and more people who did what they were supposed to can no longer feed their families while Wall Street parties like its 2012.

I'm not talking about the teabagger morons, whose ideas I pretty much agree with but whose motivations aren't even suspect, they're blatant racists.

I'm talking about the real Joe Six Pack, about half apolitical, wondering how this could happen and then basically NOTHING done about it.

Spin it all you want, the bankers just looted the country and there was NO CONSEQUENCE.

[sendero]

8. Oh..

... and not only was there no consequence, they are busy trying to do it again since there was not even one serious regulatory change.

Obama's idea is to let the Fed, the nexus of this fiasco, have more power.

I can't understand how such an intelligent person can be so utterly clueless on matters economic, or is it just that he's bought and sold like the rest of washington?

[AllentownJake]

9. Well

http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

[SammyWinstonJack]

15. I vote for bought and sold.

x(

[clear eye]

35. +1

You said it better than I could have. I dread the ugly sort of gov't that will take over claiming to be "anti-corruption", maybe by being religious, maybe by being laissez-faire libertarian.

Those folks would end all hope of critical reregulation.

[Larkspur]

7. How many more people are going to be hurt before Obama finally wakes up

and realizes that Geithner and Summers are for Wall Street, not for America?

[EFerrari]

43. Except for the people who died between Clinton's opportunity and this one

And of course, for the people who are wiped out or will be wiped out by Obama's choices in the finanial meltdown. There are consequences for making bad choices.

[AllentownJake]

5. I've been saying this since February

The window to tackle Wall Street was right after the stimulus. Giethner, Rahm, and Summers moved the President away from it. It would have required no political capital back than as people were looking at a 50% drop in their 401(k) values and the banks were on their knees.

Now he'll be lucky to get minor reforms passed and the crooks will crash the car again. Probably sometime in the next year to year and a half killing any long term recovery. It could doom his Presidency.

[vssmith]

10. Giethner, Rahm, and Summers moved the President away from it

Now who is to blame in this scenario?

[AllentownJake]

11. At the end of the day

Giethner, Rahm, and Summers were never elected to sit in the chairs they are sitting in.

[vssmith]

12. But who is to blame?

[AllentownJake]

13. The problem was created by 30 years of bad policy

begun by President Ronald Reagan, not addressing it falls on President Obama's shoulders.

[vssmith]

14. We agree!

[sendero]

16. Obama is to blame..

... he is supposed to LISTEN to his advisors, not blindly follow them.

[tonysam]

18. He WILL be held to blame

and then we risk going into third world status for sure with another Republican president at the helm.

It is getting scarier and scarier to live in this country.

[vssmith]

20. He should have picked advisers that are/were not part of the problem

[Subdivisions]

28. Geithner and Summers (along with Greenspan) engineered the

entire thing. Then, they are put in charge of fixing it. So we thought. Instead, they are in a position to ensure their crimes continue to pay off.

I challenge anyone with the balls to show me otherwise.

[bvar22]

48. Or at least balanced his picks.

His cabinet and advisers are almost totally DLC/Big Business.
The Democratic Wing of the Democratic Party was shut out of the Obama Administration.
Not a single person who voted AGAINST the IRW, or who OPPOSED the Iraq War was included.

The DLC "New Team"

[MadHound]

27. Yep, if we don't redo the regulations that Bush, Clinton, Bush and Reagan undid

We're doomed to repeat this madness again and again.

[Subdivisions]

29. No only are we, indeed, doomed to repeat it, but also the very

engineers of this epic heist of taxpayer funds now hold even more power with which to perpetuate it. Right up until the entire system crashes and all that's left are the richest of the rich and elite and the rest of us - the poor and infirmed.

[AllentownJake]

33. At this point he is either complicit or an idiot

Either one is not good.

[Greyhound]

47. He's not an idiot, he has done very well for himself.

Of course, he fucked 300,000,000 people to do it, but that's the breaks.

[Greyhound]

46. This is funny. Several of us have been saying this since the election.

This was a once in century opportunity to fix the purposely broken system. He wasted it, we're completely fucked, and worst of all he has hung this disaster around the Democratic Party's metaphorical neck. Just like the Afghan slaughter, few will remember or care that Idiot Frat Boy started it, it's the Democrat's war now.

Retaining Bernanke and appointing Geithner were clear indications of whom he really serves.

[bvar22]

49. DUH!

The time to impose regulation is BEFORE giving out the money.
There is no leverage AFTER they get the money.

But "they" already know this.


NOW we have Your Children’s Money too !!!
And there is not a fucking thing you can do about it!
Now THIS is “a Bi-Partisan Consensus” !
Better get used to it!!
Hahahahahahahahaha!

[Subdivisions]

50. And then comes this:

Obama urges creation of agency to regulate financial industry

With a key vote nearing, the president slams banks and business groups, saying they want only "to maintain the status quo that has maximized their profits at the expense of American consumers."

Reporting from Washington - President Obama tried to build momentum for the centerpiece of his overhaul of financial regulations -- a new agency to protect consumers -- by aiming to derail the strong opposition from business groups that threatens its passage by Congress.

In some of his sharpest comments on the issue, Obama slammed banks and the U.S. Chamber of Commerce for trying to block, or at least water down, the proposed Consumer Financial Protection Agency as it heads toward a vote in a House committee next week.

"They're doing what they always do, descending on Congress, using every bit of influence they have to maintain the status quo that has maximized their profits at the expense of American consumers, despite the fact that recently a whole bunch of those same American consumers bailed them out as a consequence of the bad decisions that they made," Obama said Friday at a White House gathering of key lawmakers, administration officials and other supporters.

...snip...

http://www.latimes.com/business/la-fi-obama-regulation10-2009oct10,0,2185841.story">MORE »

[troubledamerican]

52. One Simple Solution To ALL: Backtrack & reverse all laws that created the crisis.

In other words, reverse Gramm-Leach-Bliley & restore Glass-Steagall.

Restore the New Deal.