Focus and Ferocity

Martin Wolf in a column entitled Why Obama's new Tarp will fail to rescue the banks, (via) asks the same question that has been haunting me today:

Has Barack Obama’s presidency already failed?

If we are going to judge by the way he's handled the two big campaigns he has tackled so far: the stimulus and the righting of the financial sector (and that's fair given the importance of the issues) I don't see how the answer is anything but a resounding yes.  Wolf hits the nail on the head as to what Obama is doing wrong.  He's talking about Geithner's plan announced today but it applies to the stimulus package as well:

It has not asked what needs to be done to be sure of a solution. It has asked itself, instead, what is the best it can do given three arbitrary, self-imposed constraints: no nationalisation; no losses for bondholders; and no more money from Congress. Yet why does a new administration, confronting a huge crisis, not try to change the terms of debate? This timidity is depressing.

Robert Borosage and Paul Krugman, no fans of the Geithner plan, put on a happy face and suggest that the "stress test" part of the scheme is some sort of quiet path to nationalization, which is the best way forward and would be the hardest on the (very wealthy and powerful) people who drove us into this ditch.  Borosage:

The Treasury could use this clause to "discover" that the banks applying for assistance aren't solvent - and then proceed to restructure them (never using the N word). Congress might sensibly instruct the administration to do just that. Otherwise, another trillion or so will be devoted to keeping the zombies alive, while the economy -- and the Obama presidency -- suffer.

I get a headache thinking that the well-being of the global economy depends on Congress doing the difficult, but correct thing.  As Wolf writes, "it is extraordinary that a popular new president, confronting a once-in-80-years’ economic crisis, has let Congress shape the outcome."   I'd call it mystifying.  Somone should let Obama know two things:

1. There are too many people on Capitol Hill who don't seem to have an interest in the country's economy improving and who do not recognize his mandate to do what has to be done to right the ship.
2. Millions of people who voted for him can be called on to help remind them that it exists.  

So far, we've watched Obama come at two herculean problems backwards and from an unnecessarily weak position.  But it isn't only the strategy he seems to favor that is depressing, it's the lack of vision, courage and leadership.  It's the sick feeling that the people in charge now think that the only thing Clinton did wrong was get caught with a girlfriend.  It's the terrifying feeling that they don't want to give up the power that BushCo amassed or really repudiate and abandon the policies that got us in this mess - and that his base is their base. 

Comments

[Mark Gisleson]

From my next blog post:

Capitalism is dead, but since the money isn't really worth anything anymore, why not hook up the jumper cables over and over again just to see how high we can make the corpse jump?