SOME (not all) of the people on here make up a community that is probably the most partisan and Obama loyalist of the progressive blogs out there. First, Glenn Greenwald criticized Obama, and a lot of people go after him. Then it's FDL, which couldn't accept the Senate Health Bill, and they were gone after. Now and again it's Huffington Post.
What does Huffington Post do? Besides being effective, it gives a platform for people who are actually knowledgeable and have credentials to write about certain topics to air their views. Simon Johnson is one such person. He has been writing at Baseline Scenario and Salon about the financial crisis since it began. He knows what kind of populist ire there is out there-- fair or not. And as some of my own past diaries show, I definitely agree some of the criticism is not.
Obama's quote is quite clearly spelled out:
I, like most of the American people, don't begrudge people success or wealth. That is part of the free- market system.
Obama's continued refusal to take tough action against these banks' bonuses is a public relations disaster.
Simon Johnson's response, is this:
This is the antithesis of a free-market system. Not only were their banks saved by government action in 2008-09 but the overly generous nature of this bailout (details here) means that the playing field is now massively tilted in favor of these banks. (I put this to Gerry Corrigan of Goldman and Barry Zubrow of JP Morgan when we appeared before the Senate Banking Committee last week; there was no effective rejoinder.)
Not only that, but the incentives for the people running these megabanks is now to take on reckless amounts of risk. They get the upside (for example, in these compensation packages) and - when the downside materializes - this belongs to taxpayers and everyone who loses a job. (See my testimony to the Senate Budget Committee yesterday; there was no disagreement among the witnesses or even across the aisle between Senators on this point.)
Hello? This is what people have been saying all year. Yet Obama never seems to address it, or if he does, it addresses it passingly in a right-sounding soundbite but never fits it into the context of his actions-- or lack thereof. That is the problem.
The main real defense of this is that if the government clamps down on the bonuses of only these banks, then the crooks will just move over to unregulated hedge funds where they will do the exact same thing only with even less regulation than they do now. If the government is going to clamp down on bonuses there needs to be an across the board clampdown on all bonuses to executives and traders in all financial firms! OR they can minimize moral hazard by actually prosecuting some of the jackals that created this mess in the first place.
Once again, just for your viewing pleasure, this woman is beating Kos:
Blind partisanship doesn't work. Being media savvy and giving people what they want does.
Comments are closed on this story.