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Chernynkaya On December - 11 - 2009

800px-US_Navy_040127-N-5362A-002_An_aviation_survival_student_bails_water_out_of_life_raft_during_a_storm_scenario_held_as_part_of_a_refresher-training_courseObama made a big mistake during the very first days of his Presidency on this. But…

I remember the panic in September 2008. I saw both Democrat and Republican Congress members on TV literally breathless. Paulson had just advised them that America was crashing. During that first week, almost everyone was certain that the only thing to do was to give the banks gazillions. There was little dissent, but those voices were drowned as panic gained momentum. Paulson and Bernanke were insistent that $700,000,000,000 be spent immediately–Yesterday!

Obama and McCain went to a White House strategy session, along with Congressional leaders. Most decided the bailout was urgently needed. So, can we all please remember that the TARP was signed by Bush? I am not excusing Obama on this though. He could have reversed or mitigated some of what was already done by Bush, and he hasn’t. But I think this was a case of a new President, confronted with the biggest financial crisis since the Great Depression, opting to go with the “safe,” establishment team of Summers, Rubin, et al.

In all honesty, I think he panicked too. I wish he hadn’t, because it has [email protected] trust in his motives and made many of his other worthy goals suspect. I don’t believe he is a Wall St. insider, but rather a newbie, unfamiliar with the financial players who got—and accepted—very damaging advice. I am not excusing him for this, but I am rejecting the notion that he is either a corporate t00l or a bait-and-switch politician. I think he was just wrong.

I also remember the press conference that Obama held on the 100th day of his Presidency. A reporter asked what has surprised him as President. Obama said one thing that surprised him was that there are several different power centers in this country. What an honest admission! No doubt, the banking industry is one of those.

I have little problem with criticizing the President when he’s heading down the wrong path, but Matt Taibbi has made a career of it. And it’s productive to hold Obama’s feet to the fire when necessary, as on this issue. Obama must fight hard for re-regulation, even if he is unsuccessful in large part.  This is a huge problem; the drumbeats will not die down, and I want him to overcome his initial errors and “come into the light.”

Categories: News & Politics

Written by Chernynkaya

I am an artist and have lived in Los Angeles all of my life, except for a brief hippie period when I lived in SF. I am currently (semi-unwillingly) retired, but have had several careers.

18 Responses so far.

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  1. whatsthatsound says:

    It was another example of what Naomi Klein calls “disaster capitalism”. Do this one thing, NOW, or country go blooey! And of course the people saying that were the ones who had the most to gain from it. This has to be seen and recognized for what it was, because we can expect more.

    The lines from a Crack the Sky song, come to mind, “When they spit do you wipe the floor and pray that they don’t spit no more?”

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  3. Hopeington says:

    Thanks Cher, You’ve articulated for me one of the reasons I completely support our President. Being naive , or inexperienced as they called it during his campaign, didn’t allow him to know the full extent of the powers that be in Washington.
    I’m hoping once he figures out how to navigate the “mine fields” he’ll be able to do a better job at fulfilling some of the promises that will lead to change.

  4. nellie says:

    Actually, Cher, the Obama administration did takes steps to ameliorate the grand larceny that was the bailout plan. For one thing, they put caps on CEO salaries for any executives working for banks that received bailout funds. This is probably the main reason we had so many banks turned down funds and scrambled to pay back what they had “borrowed.”

    http://www.slate.com/id/2226517/

    TARP is turning out to be a money maker for the federal government. We now have funds to spend on job creation — which is what the Obama administration is planning to do.

    • Chernynkaya says:

      Perhaps not a money maker, but a break-even. I was for the TARP, but Nellie, there are just too many critics who I respect about the way this was handled-- no clawbacks on bonuses, no tough requirements for lending increases, Geithner’s easy terms for Goldman-- I could go on, but that’s not my point. My point is Obama’s INTENT. I believe he acted as an outsider, wanting advice from the pros.Anyway, I think we can all agree that Obama and the Dems must push for mre regs with fewer loopholes.

    • bitohistory says:

      From Think Fast today:

  5. boomer1949 says:

    He was wrongly misled.

    At the time, all the cocks in the Wall Street barnyard were running around crowing, “the sky is falling, the sky is falling!” Sure it was, but only for the cocks in the Wall Street barnyard. They could have given a flying fig about anyone but themselves. IMHO, Bush signed off on TARP because it lined his pockets and the pockets of his cronies. Those guys are the real “evil-doers”, and nothing could be more evil than taking the American taxpayers to the cleaners.

    Personally, I try to give people the benefit of the doubt until they prove otherwise. Screw me over more than a couple of times and you become a red flag on my list. I believe President Obama’s list has many red flags by now.

  6. javaz says:

    Another great article, Cher.

    Call me a cynic or delusional or even a conspiracy-nut, but corporations, meaning the wealthy-elite, run this country and have for over a hundred and fifty years at least.
    It was one of the fears of our founding fathers, and was also a fear of another president that was and still is considered controversial, Andrew Jackson.

    http://www.pbs.org/wgbh/amex/presidents/07_jackson/index.html

    There are some who believe that the reason JFK was assassinated was due to him taking on the Federal Reserve.
    (me? I believe it had more to do with the Cuban Missile Crisis)

    I do believe Obama has good intentions, but I also agree with you in that he was surprised by the powers that be in this country.

    Until we the people vote in representatives that listen to we the people instead of banks, lobbyists and corporations, things will not improve for Main Street in the long run.
    They toss us little morsels here and there to keep us in line, and the corporate media promotes the division with the ‘we vs them’ to keep us distracted.

    I can’t blame President Obama, since he doesn’t have all the power, but I blame our Congressmen and Senators.

  7. Chernynkaya says:

    Oh, not Bit’o-- I didn’t mean to infer that they were not needed! I should have stated that. Just that they came with little or no strings attached for those bailed out. Thanks for bringing that up.

    • bitohistory says:

      Cher, I totally agree that was a lack of rules and regulations. The few that were in the bill that the house passed were written out in the conference.

      I just watched the finacial regulation bill vote in the House. Not one Republican voted for the bill!
      “We don’t need no stinking regulations.”

  8. bitohistory says:

    Cher, I disagree that the TARP fund wasn’t needed at the time it was passed. Did the banks deserve it? No. Did they the major cause of the meltdown? Yes. Did the Bush administration do their usual work of not having enough regulations in the bill? Yes.

    Remember, this was a world wide meltdown of the financial institutions and the U.S. is a leader of banking. The U.K. still owns pieces of many of their banks. In the case of the Bank of Scotland, they own 70% of it.

    Did Bush et al, ignore and help with the crash with more deregulation and lax regulation? Yes!

    My conclusion is the TARP was needed and Obama is trying to use the unspent $200 billion on helping “Main Street”. The economy is not out of the woods yet. IMHO, we are in the middle of the forest.


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