Simon Johnson writes in the web site, the Baseline Scenario, about the Obama Administration’s protection of banks and failure to hold the mega financial institutions to standard of law and justice.
The premise – and central mistake – of the Obama administration in 2009-10 can be summed up in what the president said to leading bankers on that fateful day, March 27, 2009: “My administration is the only thing between you and the pitchforks”.
The organizing notion then, provided by Larry Summers and presumably Tim Geithner, was that the “responsible” administration would protect global megabanks from “dangerous” populists, in return for cooperation and better behavior. This kid gloves strategy turned out to be a very bad bet – not only is it far from best practice with regard to handling failed financial systems (there must be consequences for executives and shareholders, at the very least), but it also allowed banks and their close allies to bounce back to profitability and use that cash (underwritten by the taxpayer) to oppose the administration on financial reform and, according to credible public reports, to funnel large amounts of money into various “populist” anti-administration midterm campaigns.
The article calls for White House support for Elizabeth Warren and the new agency to protect consumers from the depredations of financial predators. I strongly support that.
I want you to understand that I come to criticize the Obama Administration reluctantly but their actions make a mockery of ethics, of doing the right thing, and of carrying out their obligations to the law.