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Robert Scheer: Obama’s Presidency Isn’t Too Big to Fail
A president has only so much capital to expend, both in tax dollars and public tolerance, and President Barack Obama is dangerously overdrawn.
He has tried to have it all on three fronts, and his administration is in serious danger of going bankrupt. He has blundered into a deepening quagmire in Afghanistan, has continued the Bush policy of buying off Wall Street hustlers instead of confronting them and is now on the cusp of bargaining away the so-called public option, the reform component of his health-care program.
Those are not happy sentences to write for someone who is still on the e-mail list of campaign supporters urged to back Obama in the face of attacks that are stupidly small-minded. But to remain silent about his errors, just because most of his critics are so vile, is hardly an example of constructive concern for him or the country.
Yes, Obama was presented with a series of crises not of his making but for which he is now being held accountable. He is not a “socialist” who grew the federal budget to astronomical proportions. That is the legacy of President George W. Bush, who raised the military budget to its highest level since World War II despite the end of the Cold War and the lack of a formidable military opponent — a legacy of debt compounded by Bush’s decision to first ignore the banking meltdown and then to engage in a welfare-for-Wall-Street bailout. And it was Bush who gave the pharmaceutical companies the gift of a very expensive government subsidy for seniors’ drugs.
But what is nerve-racking about Obama is that even though he campaigned against Bush’s follies, he now has embraced them. He hasn’t yet managed to significantly reduce the U.S. obligation in Iraq and has committed to making a potentially costlier error by ratcheting up America’s “nation-building” role in Afghanistan.
Just as he was burdened with the Afghanistan situation, Obama was saddled with a banking crisis he didn’t cause, and the worst that can be said of his attempted solutions to the financial mess is that they were inherited from Bush Treasury Secretary Henry Paulson. But Obama, who raised questions before his election about the propriety of a plan that would rescue the banks but ignore the plight of ordinary folks, has adopted that very approach as president. He elevated Lawrence Summers and Timothy Geithner, the two Democrats most closely aligned with Paulson’s policy, to top positions in his government.
Obama’s proposed new regulations, while containing some kind words about better informing consumers, do not portend any breakup of the “too big to fail companies” whose problems were permitted to fester by previous deregulatory measures. His answer is to increase the regulatory capacities of the Federal Reserve, which failed to use its already existing and considerable powers to avoid the debacle.
The promise is that next time the Fed will behave better. As Obama put it Monday, “So our plan would put the cost of a firm’s failures on those who own its stock and loaned it money. And if taxpayers ever had to step in again to prevent a second Great Depression, the financial industry will have to pay the taxpayer back every cent.”
Why not now? And why has he accepted the Wall Street line that all of this represents a “collective failure,” as if the con men and the conned had equal responsibility? According to Obama: “It was a failure of responsibility that led homebuyers and derivative traders alike to take reckless risks that they couldn’t afford to take. It was a collective failure of responsibility in Washington, on Wall Street and across America that led to the near-collapse of our financial system one year ago.”
Hogwash. The chicanery of the financial system, securitizing highly suspect mortgages, was codified into laws that made the hustle legal.
That insistence on equating the swindled with the swindlers is also what is wrong with the evolving health-care reform plan. The assumption from the beginning, when Obama reached out to insurance companies to come up with a deal, was that they had the interest of their customers at heart. They don’t, and it is the purpose of government regulation in the area of health as well as banking to even the scales between the powerful corporations and the consumers from whom they profit. That is the purpose of a public option worth its name.
Without a government program as a check on medical costs, Obama will end up with a variant of the Massachusetts program, one that forces consumers to sign up with private insurers and costs 33 percent more than the national average. He will have furthered the Bush legacy of cultivating an ever more expensive big government without improving how the people are served.
— TruthDig.com editor in chief Robert Scheer‘s new book is The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America. Click here for more information. He can be reached at .(JavaScript must be enabled to view this email address).
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» on 09.18.09 @ 12:26 AM
I am sure this was not easy for Scheer to write. Alas, the bloom is off the Obama rose… But what did you expect from someone with barely two years experience in national government? Infatuation is SUCH a letdown…
The entire financial meltdown has roots in the Clinton Administration, was aided and abetted during the Bush years, and… the porkulus packages have not, here on Main Street, done a darn bit of good for regular folks.
Congressmen allowed this, as Scheer puts it: “The chicanery of the financial system, securitizing highly suspect mortgages, was codified into laws that made the hustle legal.”
CONGRESSMEN HAVE NOT BEEN PUNISHED and are still chewing up more of YOUR money. (Oh they can make the banks, lenders and even you, fellow homeowners, to be villains, BUT WITHOUT THEIR LAWS this “meltdown” never would have happened. (A nod to ACORN here, too, while we’re at it…)
Greenspan said it best: “You can’t regulate greed.”
Scheer is surprised there’s a fox in the henhouse?!? (OMG – is that racist?)
It’s time for the whole lot of the thieves, crooks and liars to be thrown out. In fact, it’s hard to imagine you and I couldn’t do a better job, all things considered.
» on 09.18.09 @ 09:03 AM
So sbnative if you cannot regulate greed then the folks on Wall Street are the ones to blame. Your logic is flawed if you are saying it is impossible to regulate then why not throw the source in jail? How about those in the Financial Products Division at AIG, or the flash trading hedge funds, or the executives at many large banks that misrepresented their underlying collateral risks or the naked-short sellers that magnified the problem, or how about the rating agencies that falsified the rating of large banks for business? This were the greedy people. As you say you cannot regulate greed but what these folks did was not ethical or right. This financial meltdown happened well before Obama. The teabaggers should be hanging out in front of Wall Street in the financial district asking for their money back and demanding these folks go to jail.
» on 09.18.09 @ 01:52 PM
Local-u must understand that all the greed and the incentive for risk taking has been perputrated by the government and their policies. The government is the problem. WHy are you so keen on giving them all the regulatory power? End the fed…it will allow the people of the this country to be all the more wealthier.
The feds inflation policies delutes the commons persons wealth while enriching the special interests of the governement!
» on 09.18.09 @ 02:26 PM
Obama is a bright, articulate guy. His strength, and weakness, is that he’s still a D.C.
neophyte.
The strength may be that he can think outside the (lobbyist) box, and try some new
things, or try to break the parochial gridlock on any of 5,000 key issues un-dealt
with by Bush and Cheney.
The weakness is that to try to backstop his neophyte green-ness in D.C., he’s
surrounded himself with lots of the same geniuses who helped sink Clinton’s
presidency.
They are whispering the same old crud into his ears, every day, in every way. Not a
new thought among them.
But it’s still way early. Will some kind of health reform pass? Will some kind of
climate change legislation? Will reforms be enacted to restore the firewalls on
Wall Street against high-risk business and investment practices?
Will Guantanamo be closed? Will the bad guys finally be charged with something,
and put on trial? Will our troops finally leave Iraq? Will we finally find out if we’re
in Afghanistan to: destroy alQaeda? the Taliban? to “bring democracy”? Or to prop
up that robust nuclear neighbor, Pakistan?
Will any of the corsairs of corrupt capitalism be put in the public docks besides
lone-wolf Bernie Madoff, to account for the loss of all those hundreds of thousands
of jobs and tens of trillions of dollars of stock and income, lost during the Bush-
Greenspan-Paulson recession?
If, six months or a year from now, the answers are YES to several of these questions,
a lot of people will look back, and say that Obama had a very good first year.
If the answers are all, or mostly, No, then a lot of folks will end up agreeing with
Mr. Scheer.
Should be interesting. Joe Wilson, anyone?
» on 09.18.09 @ 03:34 PM
TN, I never said the government was not partly responsible. I was merely responding to sbnative’s naive understanding of the facts. Of course the government had a hand in this. They looked the other way. I agree with you about the Fed. But none of that argument justifies what the Wall Street folks did. I used to be one of them more than 10 years ago. It is like saying that a guy robs a bank and the cops do not catch him and you are mad at the cops. The guy robbed the bank and there and broke the rules and if caught should be punished. Are we at a point with Americans where if they can cheat and make a pile of cash they will? What happened to honesty, ethics and morals? The measure of success is not how big your pile of cash is but rather the road you took to obtain it. Most of the financial meltdown is do to greedy SOBs that never have enough and just needed more through the dishonest avenue. Look all of the 50,000 tax evaders with overseas accounts through UBS. This problem was invented and marketed by Phil Gramm.(Remember Him? the man who reversed Glass/Stengell and was McCain’s economic advisor)
» on 09.18.09 @ 07:08 PM
I don’t have as much money as “the wich”! Evewybodys gweedy. Da guberment needs to gimme some of evewybuddy elses money.
SO GET OFF YOUR POSTERIOR, STOP WHINING AND GO MAKE YOURSELF A LIVING INSTEAD OF COMMENTING ON HERE ALL DAY
» on 09.18.09 @ 09:08 PM
Dear Local:
You WISH I was naive… here’s a link that’ll explain my “position” since my words are too deep for you:
http://www.lookingattheleft.com/2009/09/conservative-woodstock-rocks-the-capital/
» on 09.19.09 @ 07:15 AM
Hey SBNative, thanks for the link. Now I fully understand given what you read how brainwashed you are and how you might have such a distorted view of facts. This really goes a long way to explain the reason you have taken many of the positions you have. Next time you should try to actually read the real news and not some very slanted right wing opinion. Are you one of those people in the picture holding the signs? I guess you are in this birther, death camp, hitler, socialist movement? What a shame because I was hoping for an intellent opponent to debate the facts.
» on 09.20.09 @ 07:54 PM
IMO, Robert = The President already had used the vast majority of “good will” going into office, during the FIRST FOUR MONTHS! It’s difficult to go back to an increasily empty well - when there’s no bucket, either!
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