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.”