Excellent column by Arianna Huffington on her views of the current inadequate approach to this economic crisis. One thing I love about Arianna is her loyalty to principles, never to a party or a person. That's the kind of thinking we need.
Her basic point is that Obama's Summers-Geithner-led economic team is with good intention but operating on a toxic philosophy that banks come first, and everything and everyone else follows. The cosmological analogy to Ptolemy and Galileo is spot on. Here's her thesis:
The longer bank-centrism is the dominant cosmology in the Obama administration -- and the longer it takes to switch to a plan that reflects a cosmology in which the American people are the center of the universe and are deemed too-big-to-fail -- the greater the risk that the economic crisis will be more prolonged than necessary. And the greater the suffering the crisis will continue to cause.
It pretty much mirrors my opinion on Geithner's toxic assets plan. His operating assumptions are a) this crisis was just an unfortunate glitch in an otherwise fine system, and b) as long as the banks are up and running again, everything will be jolly.. Neither of which I agree with. Paul Krugman has written a lot of excellent columns and blog posts about this lately.
Here's what I'd like to add to Arianna's analysis: I don't doubt that Obama has considered her (and Krugman's and the swath of economics with that view) viewpoint. And deep down I think Obama realizes it's the right thing to do. But unlike us, who have the privilege of being backseat drivers, President Obama is mapping out a larger strategy for the country and the world, whose magnitude and complexity we can't even begin to comprehend.
I think he realizes that his approach to fixing the economy is imperfect, but considering the political costs and risks of a more comprehensive approach, I think Obama has decided he'd prefer to play this one safe, so he can proceed to fix energy, health care and education -- which he got elected to do. So maybe he's correct in his own way, despite the flawed approach. I've written more about this here.
If Obama takes the Krugman approach and temporarily assumes control of the banks, cleans them up and sells them back -- the right wing machine will cry Russian Revolution faster than Sarah Palin can pick up a pair of binoculars. It wouldn't matter how wrong they are and how right Obama would be; perception is everything and Republicans are brilliant at this kind of distortion.
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