Tuesday, March 17, 2009

Washington is predisposed to see public passion and anger as a threat rather than an opportunity

The title of this post is grabbed (and paraphrased) from David Sirota's excellent post at Open Left.
Wall Street sycophants like Summers and Geithner continuing to push a red herring that says there's nothing that can be done to stop corporations from using our taxpayer money to subsidize bonuses for the same executives who created this economic crisis.

... the populist anger that the Times examines could be a huge force for good - if the administration gets serious about championing it, rather than trying to suppress it out of deference to a punditocracy that says it is "dangerous" or "unserious" or "too emotional." Doing the latter, in fact, is the best way for the White House to become a target of the public's ire.

I'm getting increasingly frustrated by Geithner specifically, and Summers recently. For Geithner, I'm fairly convinced now that he's in waaaaayyyy over his head, and is completely lacking in vision, internally and externally. Ancedotal evidence would indicate that he's trying to balance chainsaws with razorblades; he's trying to keep the richies from having to part with too much cash while the economy collapses on the little people. Which one can stand the bigger loss? Which can tolerate the chainsaw, and which the cuts of the razorblades?

If he had smart leadership behind him, the rich SOBs that got us in this mess in the first place would be getting the full brunt of the chainsaws, face first. But we're not seeing that kind of leadership right now. Again, another day, and we find out that we're into AIG for even more money that they're using to enrich themselves. The very small group of "pirates" that caused the crisis at AIG are raking in the largest amount in bonuses. And once again, Obama is a day late and a dollar short to this mess, and he has to go out and deliver another speech to cover his ass.

No one expects Obama to have all the answers, and this mess is really too big for any one man to handle. But huge mistakes like this just make it that much harder for everyone. It's directly related to shortsightedness, and a distorted pro-business perspective. For example, how in the world is anyone able to say with a straight face that we have to coddle the very thieves responsible for trashing the global economy out of fear that we won't be able to hire the "best and brightest" to get us out of this mess? Who believes that there aren't plenty of smart but cautious economists who could help untangle this Gordian Knot? I'm willing to bet that there are plenty of economists who were actually smart enough to see this house of cards for what it was and decided not to sully themselves by playing the foolish games of the greedy. Why not let the thieves go, and replace them with the smart guys, the ones who weren't spending every waking hour trying to game the system, but the ones who want to make it work?

Who else believes Liddy, the current CEO of AIG, when he says they are bound by contract to pay these bonuses? I know litigation attorneys, and the first thing each of them will tell you is that the validity of any contract depends on which lawyer argues his case better. In other words, there aren't many contracts that can't be "altered". I want to say that Obama should have known this, but now there is a report out that Treasury knew all along about these AIG bonuses, and helped make it happen.

All this said, I'm still not ready to give up hope on Obama. I'm shouting this out because I want him to do better, and I think he can do better. Of course, my entire post is based on what I've pieced together, and my argument is only as strong as the weakest post of all I cited. I need to dig some more to see what the deeper story is here, but so far it's just not looking good.

As much as I'd love to see Geithner go, it's politically untenable, as letting him go would be worse for Obama than just gradually marginalizing him. I think at this point Obama needs to get someone else in to give poor Tim a hand, or 2010 is going to look a lot like 1994. That's the real backlash they need to be concerned with.

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