Out Of Touch, Part 2
What's interesting about the new DC J-List insiders' (just kidding) take on the AIG bonus mess is how they do not make the obvious connection to the bigger problem of Treasury's timidity regarding the financial crisis. Of course in the scheme of things, the AIG bonuses are a drop in the bucket -- but the problem here is, to coin a phrase, "systemic." Too much energy and political capital has been wasted by the Obama Administration in propping up the old Wall Street order and not enough in trying to figure out what exactly would be best for the country. Thus when Yglesias writes:
If thereís something the administration deserves criticism for, itís the fact that most observers think their public-private partnership for bank recapitalization canít work. If you want to talk about latter-day conservative populists being hypocrites, talk about their stances on the tax provisions in the budget. Thatís the big stuff thatís still in play. On the bonuses, the politicians have heard peopleís outrage and now seem determined to avoid future such blow-ups. Itís fine.
He fails to see the obvious connection with Geithner's sh*tty plans and his political blunder on the bonuses. They are intimately connected. Geithner and Summers are busy trying to save Wall Street, not the country's economy. Therein lies the problem.
I'll grant you that Geithner and Summers think saving Wall Street is necessary to saving the country's economy. And that is where they are wrong imo. They believe that these Masters of the Universe are essential to saving the economy. I do not believe they are.
Of course we need a vibrant financial system and eventually a new private sector financial industry will rise. But that does not mean we need, or can even afford, the old Wall Street that we have now.
If old Wall Street needs new money from the Obama Administration, I think it can not be gotten anymore. The days of the free bailout are over. Ironically, Geithner's political blunder doomed his plan to save Wall Street. And it may get him to concentrate on saving the country's economy. Which will be good for him, for President Obama, and most importantly, for the country.
Speaking for me only
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