People respect honesty, especially if they can check the books.
Obama's Biggest Mistake: Selling Out to the Bankers
The original sin of Obama's presidency was to trust bank-friendly economists and Bush carryovers, whose primary goal was to protect their own past decisions and futures.
New Deal 2.0 / By James K. Galbraith
November 7, 2010
EXCERPT...
But one cannot defend the actions of Team Obama on taking office. Law, policy and politics all pointed in one direction: turn the systemically dangerous banks over to Sheila Bair and the Federal Deposit Insurance Corporation. Insure the depositors, replace the management, fire the lobbyists, audit the books, prosecute the frauds, and restructure and downsize the institutions. The financial system would have been cleaned up. And the big bankers would have been beaten as a political force.
Team Obama did none of these things. Instead they announced “stress tests,” plainly designed so as to obscure the banks’ true condition. They pressured the Federal Accounting Standards Board to permit the banks to ignore the market value of their toxic assets. Management stayed in place. They prosecuted no one. The Fed cut the cost of funds to zero. The President justified all this by repeating, many times, that the goal of policy was “to get credit flowing again.”
SNIP...
These facts were obvious to everybody, fueling rage at “bailouts.” They also underlie the economy’s failure to create jobs. What usually happens (and did, for example, in 1994 - 2000) is that credit growth takes over from Keynesian fiscal expansion. Armed with credit, businesses expand, and with higher incomes, public deficits decline. This cannot happen if the financial sector isn’t working.
Geithner, Summers and Bernanke should have known this. One can be fairly sure that they did know it. But Geithner and Bernanke had cast their lots, with continuity and coverup. And Summers, with his own record of deregulation, could hardly have complained.
CONTINUED...
http://www.alternet.org/story/148770/obama%27s_biggest_mistake%3A_selling_out_to_the_bankers
Politically speaking, one would be amazed at what an economy based on justice, not just-us, would do at the polls.
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