Bill Moyers and Michael Winship, writing on Salon.com, offer an eloquent critique of Barack Obama’s efforts on behalf of the American financial system, efforts that have been characterized by a obeisance to Wall Street and the folks who got us into this mess in the first place.
Consider Lawrence Summers, director of the National Economic Council and the president’s chief economic adviser. As Moyers and Winship point out, Summers has earned a lot of money over the years from the firms at the root of the mess, which could explain the meandering and ineffective way in which the president has addressed the crisis in the financial markets (as opposed to his aggressive — though not aggressive enough — approach on the economy as a while). Summers, they write,
was intoxicated by the exotic witches’ brew of derivatives and other financial legerdemain that got us into such a fine mess in the first place. Yet here he is, serving as gatekeeper of the information and analysis going to President Obama on the current collapse.
We have to wonder, when the president asks, “Larry, who did this to us?” is Summers going to name names of old friends and benefactors? Knowing he most likely will be looking for his old desk back once he leaves the White House, is he going to be tough on the very system of lucrative largesse that he helped create in his earlier incarnation as a deregulating treasury secretary? (“Larry?” “Yes, Mr. President?” “Who the hell recommended repealing the Glass-Steagall Act back in the ’90s and opened the floodgates to all this greed?” “Uh, excuse me, Mr. President, I think Bob Rubin’s calling me.”)
That imaginary conversation came to mind last week as we watched President Obama’s joint press conference with British Prime Minister Gordon Brown. When a reporter asked Obama who’s to blame for the financial crisis, our usually eloquent and knowledgeable president responded with a rambling and ineffectual answer. With Larry Summers guarding his in box, it’s hardly surprising he’s not getting the whole story.
Summers, of course, is only part of the problem. There is the ineffectual Timothy Geithner running Treasury, as well, meaning that far too many of the players involved in the creation of the financial house of cards — dating back to the Clinton administration and its role in the deregulation of the industry — are still in place, trying to balance the desire to right the economy with a bias toward protecting their own.
Geithner, at least, is salvagable. I can’t say the same for Summers, who should be dispatched from service and replaced as quickly as possible. It’s not like better, more progressive alternatives aren’t out there. Obama could — should — turn to anyone on this list: Joseph Stiglitz, Paul Krugman, Dean Baker, Sheila Bair, Robert Reich, Leo Hindery, etc. There also are reporters like William Greider at The nation and Gretchen Morgenstern at The New York Times who’s take on the financial collapse is much more in line with the pitchfork-wielding public.
Coddling the bankers is bad policy and bad politics.