ObamaNeeds to Move on the Financial World

Politically, the Obama Administration is in trouble, although they probably think they’re not. People are getting impatient; I’m getting impatient. Yes, there is change, and this isn’t the Bush Administration – that is what has given the Administration so much slack, we still remember the WAH (Worst Administration in History). We now have some people who have some brains and some basic humanity.

But we’re not really going to see too much positive for quite a while, the way we’re going. Let me count the deficiencies.

Guantanamo – maybe not as grim as it was, we don’t really know. It’s just taking a while to wrap it up.

Torture. He did well at first saying we won’t torture, but we’re still going to do special renditions.

Justice Department. Still incompetent, and still double-dealing with Spiegleman. Still taking some Bush positions.

Greg Craig. All pundits agree, a good man wronged by bureaucratic infighting and failure of Obama himself to stand up.

Health care. Not going to go so well. Some things will be better, but not clear how soon, and not really clear if it will be a lot better in the end. Meanwhile, the perhaps necessary strategy of letting the Congress lead has not been pretty.

Afganistan. Will not a pull out, will readjust objectives and management, it will look competent, but it will take time.

Pakistan. A very most improvement, but the area itself is so difficult, who can expect much? If it doesn’t blow up, we will be well served.

Iraq. Certainly much better, but Obama can’t take credit for this; most people think that by our staying in there, it finally will be somewhat better, although it was done in the least effective way imaginable.

Middle East. No particular competence shown here.

All the public appearances. Regular guy, OK, but too many appearances. Watching basketball games, the turkey, enough, give me a break. It would be different if things were going well.

Which leaves the big boy, the economy, joblessness, low growth, the specter of more and more loss of homes, more financial upsets. The stimulus package was necessary, of course, but it’s controversial and since it’s just cushioning a fall, there is no one there to shout “whoopee!”

Which leads us to Wall Street. If there is one leaking sore, this is it. The other items above may not be solved, but many are somewhat better, and none demonstrably worse. Wall Street, the major miscreant in the most major problem we have, is awash in money and notably devoid of contrition. Quite the opposite. And their facilitators, their enablers, Geithner and Summers, are insiders.

So, here’s what I have been thinking for the past month or so. Get health care out of the way, one way or another. Just get it done, call it a victory, and move on. Say the results will take some time to see, although there will be a special near-term fund from the government for the uninsurable to buy insurance.

Get Afganistan set, say it will take time, we are not bugging out, but our strategy will be intelligent, and hope it recedes some in prominence.

Then, attack the financial problem head on. First, say that the system has been rescued. We had to prop it up so there wouldn’t be a liquidity crisis and there wouldn’t be a meltdown. Unfortunately, in the process of doing this, we have found out that the denizens of the Street are profoundly unconscious people. They have revealed themselves as who they are, and it’s not a pretty picture. It’s time for the extortion to end.

So, here’s what we’re going to do. We’re going to push for really big regulations on the Street. We’re going to reintroduce Glass-Steagall, which never should have been repealed – thanks, Clintons and thanks, Phil Gramm et al. We’re going to take measures to break up the big banks so that nothing will be too big to fail.

And we’re going to take the money from the banks and make them start lending to small business. We will start with gentle persuasion. If that doesn’t work, we’re going to take them over one by one. And we’re going to make the mortgages go back to the original interest rates of the ARM and not let them vary upward. Too bad, lenders; you’ll survive.

Now, a lot of what I suggest is untutored – I don’t know 5% as much about this as I know about health care. I’ll follow this up in a while with something more accurate. But I’m trying to indicate what I think is the tone they need to strike -- we’re kicking ass and taking names.

OK, it’s populist. But politically, this is what they have to do. Let the Republicans start to defend Wall Street. Isn’t that what the Administration needs?

Budd Shenkin