A one-two punch that makes me feel worse, not better, than I did yesterday. First, at The Huffington Post, comes Robert Kuttner’s ominously entitled Geithner’s Last Stand, here. Then, The Wizard, Paul Krugman, pulls no punches in his appraisal of the leaked Geithner “plan”, here.
Kuttner articulates the fetid heart of the matter, here:
Which brings up the question: where in this affair is the president who hired Secretary Geithner and at whose pleasure the embattled treasury secretary serves? For the moment, President Obama is standing by his man, something he has to do until the moment that Obama decides to ease out Geithner, work around him, or fire him.
The problem, of course, is larger than Geithner. The entire Obama economic team is far too close to Wall Street and far too much a continuation of the Paulson approach. And though Geithner is primed to take the fall, the plan is the work of senior economic strategist Larry Summers as much as it is Geithner’s.
The grave political and economic risk is that Obama continues to let Summers and Geithner lead him down the garden path; the industry-oriented mortgage rescue saves too few homeowners; housing remains in the doldrums and mortgage securities with it; the hedge funds and private equity companies make some money with government guarantees, but the banking system remains comatose; and Republicans increasingly become the instruments of public anger.
As a third voice of (painful but necessary) reason, Bob Ostertag does what Deep Throat admonished Woodward and Bernstein to do and follows the money. He deftly summarizes the real conflict of interests Obama has had (politically, financially) and obviously, it’s not a pretty picture. However, he sees reason for optimism: things have to bottom out before the Vox Populi starts to drown out the limp, ineffectual and utterly self-serving whispers amongst the insiders.
But I am more optimistic than I thought I would be at this point. The looting of the US Treasury has not gone as planned. Everything is spiraling out of control. And Americans are actually mad! Bankers are in tears (at least according to their congressional testimony). When Republican congressmen are calling for corporate execs to commit mass suicide, you know the ground has shifted.
Have things changed so dramatically that Obama will have room to dump his biggest campaign contributers overboard? That question will be answered in the coming weeks.
Now is not the time to be quiet. Now is the time to yell bloody murder. We will soon know whose call comes through the loudest.
I don’t quite share his optimism, what with Obama doubling down (for now) on Geithner, but here’s hoping that public pushback and a handful of the more sagacious minds inside the beltway (ha!) have their voices heard in the coming days and weeks.
