James K. Galbraith: "one cannot defend the economic actions of Team Obama on taking office"

[Better Believe It]

It Was the Banks
by James K. Galbraith
James Galbraith is currently a professor at the Lyndon B. Johnson School of Public Affairs and at the Department of Government, University of Texas at Austin. He is also a Senior Scholar with the Levy Economics Institute of Bard College.
November 5, 2010

The original sin of Obama's presidency was to assign economic policy to a closed circle of bank-friendly economists and Bush carryovers. Larry Summers. Timothy Geithner. Ben Bernanke. These men had no personal commitment to the goal of an early recovery, no stake in the Democratic Party, no interest in the larger success of Barack Obama. Their primary goal, instead, was and remains to protect their own past decisions and their own professional futures.

.... 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."

To counter calls for more action, Team Obama produced sunny forecasts. Their program was right-sized, because anyway unemployment would peak at 8 percent in 2009. So Larry Summers said. In making that forecast, the Obama White House took responsibility for the entire excess of joblessness above eight percent. They made it impossible to blame the ongoing disaster on George W. Bush. If this wasn't rank incompetence, it was sabotage.

President Obama didn't see this. Or perhaps, he didn't want to see it. His presidential campaign was, after all, from the beginning financed from Wall Street. He chose his team, knowing exactly who they were. And this tells us what we need to know about who he really is.

Read the full article at:

http://www.commondreams.org/view/2010/11/05-13

[SunsetDreams]

1. Election 2012 has started

[Gold Metal Flake]

2. I guess he didn't get a glitter-farting unicorn either.

Or some similar fucked-up, RW-based dismissive bullshit response.

[SeattleGirl]

3. ROFL and +1,000!!!

:rofl:

[Tansy_Gold]

4. Original Sin

"The original sin of Obama's presidency was to assign economic policy to a closed circle of bank-friendly economists and Bush carryovers. Larry Summers. Timothy Geithner. Ben Bernanke. These men had no personal commitment to the goal of an early recovery, no stake in the Democratic Party, no interest in the larger success of Barack Obama. Their primary goal, instead, was and remains to protect their own past decisions and their own professional futures."


http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=7922946

from #24 --

His economic team is nothing but recycled Greenspan believers. Greenspan and Rubin and Phil "King of Deregulation" Gramm are the ones who got our economy into its present mess.

He's already let it be leaked that he might not roll back the tax breaks granted to the super wealthy because it might not be good for the economy. Excuse me?????????????

from #53

Geithner has been working with Bernanke and Paulson on the current spate of bailouts. As head of the NY Fed, he has close ties to Wall Street. As a protege of sorts to Rubin -- and Rubin himself is now an Obama appointee -- there are additional ties to Citi. Geithner also has ties to Summers. And since both were Treas Secy under Clinton, with the ties to Gramm and repeal of Glass Steagall, Geithner is hardly free of taint.

Insiders, insiders, insiders all.

from #64

Obama's Treasury Pick Has All the Wrong Ideas
By William Greider, TheNation.com. Posted November 25, 2008.

Timothy Geithner is an architect, and now an enabler, of the unfolding crisis.

A year ago, when Barack Obama said it was time to turn the page, his campaign declaration seemed to promise a fresh start for Washington. I, for one, failed to foresee Obama would turn the page backward. The president-elect's lineup for key governing positions has opted for continuity, not change. Virtually all of his leading appointments are restoring the Clinton presidency, only without Mr. Bill. In some important ways, Obama's selections seem designed to sustain the failing policies of George W. Bush.

[SunsetDreams]

5. I'm not quite sure posting something from Nov 2008

does you any favors. All it does is reinforce the debate, that all of this "holding feet to the fire" and criticism of Obama started before he even took office, with some.

[Tansy_Gold]

7. I took a lot of heat over those posts in November 2008.

i was literally called batshit crazy; some of the posts were removed but my responses remain.

I was right then, I knew it then, and I and those who think like me are right now.

If the election was over the economy, as all the polls seem to say, then maybe the Obama team and some of the supporters should have listened to the critics from November 2008, especially those who are still the critics now of 2010.

Or would you prefer that we just shut up and pretend it never happened?

I'm not asking to have any favors done to me. I'm simply pointing out, for my own satisfaction, that I was fucking right. Yes, it's a sore spot. But it should also wake up a few people.

Then again, maybe those people would prefer to remain asleep.


Pleasant dreams.




TG,NTY

[SunsetDreams]

8. You might think it points that out, but

it really doesn't...quite the opposite.

[Tansy_Gold]

12. I'll certainly take your comments under advisement. n/t

[SunsetDreams]

14. Thanks :)

[PufPuf23]

18. Obama concerned me as soon as he started making appointments

especially economic and environmental.

I saw the fail coming. It was not a popular view then (or now apparently).

[Catherina]

10. Rec'd. And the OP too. n/t

[treestar]

6. I'm sure they can be defended somewhere

Even if that writer can't.

[Kahuna]

9. Commondreams, huh? Typical. nt

[Better Believe It]

17. Typical liberal post Perhaps you can find something more in the center, moderate and non-partisan

[BrklynLiberal]

11. There were many, many DUers saying that exact thing on January 21, 2009!!!

Maybe someone in the White House needs to read DU!!!

[Tansy_Gold]

13. See post #4 above -- 24 November 2008 n/t

[BrklynLiberal]

15. yep.

:thumbsup: :hi:

[glitch]

16. Zero rebuttal. K & R

Galbraith lays it all out in very easy to understand terms.

Excellent article, everyone should read it before criticising it, if only for their own credibility.

[Better Believe It]

19. There is nothing in the article that can be effectively rebutted.

Case Closed

[glitch]

21. Indeed. Unfortunately for us reality is confirming Galbraith* at breakneck speed.

*genuine progressive economists like him, Dean Baker, Michael Hudson, Nomi Prins, Catherine Austin-Fitts, David Korten, moderates like Stiglitz, Krugman, William Black, Simon Johnson... and even conservatives like Paul Craig Roberts and David Stockman.

Economists that just happen to exist outside Wall Street.

[WinkyDink]

20. I can't see how anyone can fault that opening sentence.