Paul Krugman's right on the money, as usual:
I’ll leave to others the question of who knew or should have known that the bonus firestorm was coming; but it’s part of a pattern. At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.
This was bad analysis, bad policy, and terrible politics. This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that it’s owned by the wheeler-dealers. And that leaves it with no ability to counter crude populism.
No question ... Obama's blowing it.
Conservative cabinet appointments have in fact foreshadowed a dangerous reluctance to abandon faith in the champions of Wall Street "free-for-all" capitalism and instead shift the power back to responsible regulation by those not devoted mainly to the cause of the ultra-wealthy and über-powerful in America.
Why is common sense liberalism still so radiocative in Washington even after America's economy goes critical right before our eyes due to injuries sustained in a horrible Reaganomic trainwreck?
Will Obama (finally) take Krugman's advice, bite the bullet, temporarily nationalize zombie banks and institutions like AIG, clean out the corrupt culture of "me first" greed that still so pollutes the waters of America business and finance, roll back the Reagan tax cuts on zillionaires, etc. – before it's too late to actually make a difference?
If not, he may find his own political capital account is bankrupt before his first 100 days are over.
You know what to do.
O's contact info:
President Barack Obama
Email form: http://www.whitehouse.gov/contact/
Pass it on.
UPDATE 3/22/09 : Frank Rich of the New York Times seems to agree with my assessement. In his latest excellent piece, Rich ponders the calamitous consequences should Obama's cozy relationship with and ridiculous coddling of Wall Street turn out to be his administration's "Katrina Moment." Read it here.
The Democratic Activist
The Democratic Activist