I’m not going to pound on this too much because we’re stuck in a lesser of two evils political system and protestations of my Libertarian friends notwithstanding, until I see a better offer from one of the two major political parties, I’m not going to aid and abet the cause of a worse alternative.
But, Matt Taibbi and Frank Rich are hammering on a central failure of the Obama administration:
Obama entered the White House in the middle of a great economic crisis, and his Geithner/Rubin solution was to spend mind-boggling amounts bailing out Wall Street, while extracting no conditions or reforms in exchange, and punishing no one. Then, by abandoning jobs programs and taking up the Tea Party’s “austerity” model, he essentially asked ordinary Americans to foot the bill for this no-strings-attached rescue program.
Would Hillary have done things differently? With Bill’s DLC background, I have my doubts. I’ve not heard too many Libertarians proposing to yank Wall Street’s choke collar. Romney or Bachmann certainly won’t. McCain would not have.
For now, guys like me are probably resigned to impotent muttering followed, at best, by Obama muddling along trying not to upset the financial status quo too much and, if Obama is not elected, Katie bar the door, because we’ll be going full throttle in favor of the folks who brought us this economic mess. There are no viable economic populists on the horizon.
Correct me if I’m wrong, but was the bailout not done under W and not Obama? The bailout was a done deal when Obama came into office, and it was the W administration that put zero conditions on the bailout money. Obama tried to implement pay limits at the bailout firms and the Republicans threw a royal hissy fit.
References to the O.J. Simpson trial raise the issue as to the possibility of a subsequent civil action (wrongful death?) in which the standard of proof is lower (preponderence of evidence vs reasonable doubt). Anybody care to comment?
The ‘folks who brought us this mess’ look to me like both Rs or Ds. Sure, this may be the predictable response from me, but from here, the elected Ds have been consistent about a Keynsian approach, in favor of bailouts and stimulus. The Rs inconsistent, being for when Bush was President, loudly against since Obama took office.
The Libertarian response to ‘yanking Wall Street’s chain’ would have been to let the bastards fail, and try several executives for fraud. That’s what an Attorney General is for. Bailing out with minimal conditions just told everyone on the Street to carry on without worry about repercussions. That was incredibly stupid, worst message possible. Make public your risk, keep private your profits? If anything, the message should have been, “Commit fraud, go to prison. Engage in shady business practices, go bankrupt”.
At any rate, there’s a lot of muttering going on. I seem to recall so many Democratic bloggers going on and on about the evils of borrow & spend in late 2008, then falling ominously silent on the matter (along with the wars) come January 2009. Said bloggers might have done the country a huge favor had they held their guy’s feet to the fire at the beginning of the term. There’s no chance for that now that we’re in ‘not allowing the worse alternative’ mode, so the muttering will carry on at least until January 2013.
Mike, while I find the argument of “letting the bastards fail”, and then trying executives for fraud quite attractive on one level, how do you deal with the “too big to fail” response? Do you simply assert that nobody is “too big to fail”, or that the linkages within a complex web are simply not as interdependent as we’re lead to believe? Or are you simply saying “let the fall, and if fraud prosecutions don’t recover enough damages to make all those injured hole…..well, too bad?
The reason that there has not been a recovery is because we have not dealt with the problem that got us into this mess in the first place: housing policy.
Phase out Fannie and Freddie, get rid of mortgage back securities, outlaw credit default swaps, and eliminate the mortgage interest deduction and the deductibility of state and local taxes. Get the housing industry on a solid, “reality based” footing instead of pursuing a policy that just pumps up the value of homes without making them more affordable, which also causing folks to overinvest in housing, to the detriment of other areas of the economy.
Is that libertarian? Communist? Who knows. It’s the truth, however, one that absolutely no one seems to want to admit, because everyone, be they Democrat or Republican, worships at the house of “affordable housing” and “homeownership for all”.
Critiquing Obama, there are a lot of good comments here for and against. Some of the bailout was already baked in, but he did go along with turning the TARP into a direct bank bailout, including bailing out GM and Chrysler.
His biggest problem is going to be Obamacare, specifically that he “wasted time” on it instead of “focusing like a laser beam” on the economy, and leaving health care reform to a time where we are not in the worst recession in memory. The fact that it makes the uncertainty issue even more… uncertain… thereby making the economy worse, is yet another demerit.
Health care was a now or never proposition. Well, now or not for another generation probably. His big problem was letting Congress spin its wheels in futile hopes of bi-partisanship. Once he saw which way the wind was blowing, he should’ve just rammed it through. That’s what he’s accused of having done anyway, despite having spent an inordinate amount of time on it.
And, you know, walking and chewing gum.
You’re living in an alternate universe. First up, it was rammed through. I can’t tell you how many times I thought it was dead. I for sure thought it was dead when Scott Brown got elected. That thing had more lives than a cat.
As for his alleged search for bipartisanship, the dude outsourced the bill to Congress. He really didn’t work for anything (which is his M.O.). If it took longer than it should have, well, that’s what happens when you let Pelosi and Reid do the work for you.
Isn’t it the job of Congress to write up spending bills? It’s in that Constitution thing that everyone prattles on-and-on about but never seems to read.
If basically the entire year of 2009 constitutes “ramming through,” I’d hate to see what “deliberation” looks like.
Health Care Reform (don’t want to say “Obamacare” and be thought of as a political terrorist) was rammed through if you care at all about bipartisanship. Remember the whole “we have to pass the bill to learn what’s in it” from Pelosi? Does that sound like deliberation?
The reason the bill took all of 2009 to get through is because it took that long for the Democratic Party to get all of their elected officials, (including many “Blue Dogs” who committed political suicide by signing it and leading to the Great Republican Landslide of 2010) to sign off on it.
Gang member, not terrorist. The Republicans weren’t going to vote for it no matter what was in it. A bunch of the stuff in there was stuff they used to say they supported. I’m told that it’s essentially what Romney put through in Massachusetts.
But, I get your point. Rammed through = not bipartisan. So, essentially, it’s “rammed through” if it’s party line. Even if they take a year to pass it and even if it gets 60 votes in the Senate.
Some days it feels like it would be easier to just push the fishhook the rest of the way through rather than figure out how to pull it out.
Meaning, maybe I should start voting “Unstable”, so we can get to collapse faster, so we can get to the rebuilding sooner. It just seems to me that everything is so tied up now, on every single front, that we might be better off just cutting off the knot and starting back at 1788.
Doug, I see we have a little bit of miscommunication here. When I say rammed through, I mean what was done at the end to get it passed (in the end, it was just an act of pure will on the part of Democrats to get it passed). I agree with you that it took a long time to be passed, and as I said I thought the thing was dead a number of times.
On my blog, when a bill is moving through the legislature like a bat out of hell, I say that it is “greased”. You know, like the Illiana tollway.
Don- Agreed, the interlocking nature of it all threatened to take down people below with little or no hope of recovery. I’ll first say that even with the bailouts, an awful lot of little folks down below got little to show for it, apart from foreclosures and wrecked credit scores, while many executives got bonuses. With the compassionate guidance we got plenty of ‘You were wronged? Bummer for you’.
I put a lot of stock in signals from leadership. Had an active Attorney General’s office begun looking into lending practices in 2006- not an impossible thing, as some pundits were calling this out by then- I believe that other players in the market would have taken note and begun to alter course in response. Obviously that was more than we could have expected from Alberto Gonzalez. And, one failure not rescued sends the signals to the others in precarious positions that they need to right their ships. For my money, by bailing out, the moral hazard is there- misbehavior is condoned.
Also, in my opinion, many borrowers took loans they knew they could never repay. That’s fraud also. A few convictions on that count would have similarly sent signals to borrowers against such behavior.
Anyhow, my solutions are never perfect. I acknowledge that. I try to find the best good, though.