Mortgaging the White House
Editor’s Note: Despite Wall Street's responsibility for today’s financial crisis, President Obama stacked his economic team with people having close ties to the major culprits, aides such as Treasury Secretary Tim Geithner and economic adviser Larry Summers.
Those connections mark a big difference between how Obama approached his first hundred days and FDR did his, as Bill Moyers and Michael Winship note in this guest essay:
Finally, here we are at the end of this week of a hundred days. As everyone in the western world probably knows by now, this benchmark for assessing presidencies goes back to Franklin Delano Roosevelt, who arrived at the White House in the depths of the Great Depression.
In his first hundred days, FDR came out swinging. He shut down the banks, threw the money lenders from the temple, cranked out so much legislation so fast he would shout to his secretary, Grace Tully, "Grace, take a law!"
Will Rogers said Congress didn't pass bills anymore; it just waved as they went by.
President Obama's been busy, but contrary to many of the pundits, he's no FDR. Our new president got his political education in the world of Chicago ward politics, and seems to have adopted a strategy from the machine of that city's longtime boss, the late Richard J. Daley, father of the current mayor there.
"Don't make no waves," one of Daley's henchmen advised, "don't back no losers."
Your opinion of Obama's first 100 days depends of course on your own vantage point. But we'd argue that as part of his bending over backwards to support the banks and avoid the losers, he has blundered mightily in his choice of economic advisers.
Last week, at a hearing of the Congressional Oversight Panel (COP) monitoring the Troubled Asset Relief Program (TARP), Treasury Secretary Timothy Geithner tried to correct AFL-CIO General Counsel Damon Silvers.
"I've practiced law and you've been a banker," Silvers said. Never, Geithner replied, "I've only been in public service."
We beg to differ. Read Jo Becker and Gretchen Morgenson's front-page profile of Secretary Geithner in Monday's New York Times, and you'll see how Robert Rubin protégé Geithner, during the five years he was running the New York Federal Reserve, fell under the spell of the big barons of banking to whom he would one day help shovel overly generous sums of money at taxpayer expense.
During "an era of unbridled and ultimately disastrous risk-taking by the financial industry," the Times reported. "... He forged unusually close relationships with executives of Wall Street's giant financial institutions.
"His actions, as a regulator and later a bailout king, often aligned with the industry's interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records."
Wined and dined at the Four Seasons, and in corporate dining rooms and fine homes by the very men whose greed and judgment helped bring on the Great Collapse, Geithner became so much a favorite of the Club that former Citigroup chairman Sandy Weill talked with him about becoming the bank's CEO.
According to Becker and Morgenson, "Even as banks complain that the government has attached too many intrusive strings to its financial assistance, a range of critics - lawmakers, economists and even former Federal Reserve colleagues - say that the bailout Mr. Geithner has played such a central role in fashioning is overly generous to the financial industry at taxpayer expense."
The two reporters write that Geithner "repeatedly missed or overlooked signs" that the financial system was self-destructing. "When he did spot trouble, analysts say, his responses were too measured, or too late."
In choosing a man to manage the bailout of the banks who's so cozy with its players, and then installing as his White House economic adviser Larry Summers, who in the Clinton administration took a laissez-faire attitude toward the financial industry which would later enrich him, the President bought into the old fantasy that what's best for Wall Street is best for America.
With these two as his financial gatekeepers, President Obama's now in the position of Louis XVI being advised by Marie Antoinette to have another piece of cake until that rumble in the streets has passed on by.
In fact, other Wall Street insiders - many of them big contributors to the Obama presidential campaign, and progressive in their concern for the public interest - privately are expressing serious concerns that Geithner, Summers and their associates are leading the President and America's taxpayers down a path toward further economic disaster.
This week, as Senate Majority Whip Richard Durbin of Illinois unsuccessfully fought for a congressional amendment he said would have helped 1.7 million Americans save their homes from foreclosure, the senator told a radio station back home that, "The banks - hard to believe in a time when we're facing a banking crisis that many of the banks created - are still the most powerful lobby on Capitol Hill. And they frankly own the place."
He could say the same of the White House.
Bill Moyers is managing editor and Michael Winship is senior writer of the weekly public affairs program Bill Moyers Journal, which airs Friday night on PBS. Check local airtimes or comment at The Moyers Blog at www.pbs.org/moyers.
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