Change? - Not So Much

Commentary By Ron Beasley

I didn't anticipate that Barack Obama would be all I wanted him to be.  That said he has been a disappointment.  There is of course the steady march into the quagmire of Afghanistan with no real plan but it's on the economic front where his inadequate response is the most troubling.  I was concerned when he selected Timothy Geithner and Larry Summers as his economic team.  During the Clinton years Summers was a cheer leader for the policies that got us into this mess and Geithner was Paulson's right hand man,   Well I'm not the only one to notice.

Dem Rep. Miller Interview: No 'Change I Can Notice' At Obama's Treasury

As a member of the House Financial Services Committee, Rep. Brad Miller (D-NC) has had a front-row seat for the fireworks over the financial bailout -- and he's not convinced that the new administration has changed the Treasury Department.

"I want change I can believe in," he told me in an interview late yesterday. "I don't think I have change I can notice."

Miller's chagrin over Treasury's lack of responsiveness and transparency signals a distressing trend for the Obama administration. As the nation seethes with anger over lavish spending at bailed-out banks -- particularly AIG's $450 million in bonuses to the same executives who bankrupted the company -- a number of lawmakers from both parties are pointing out that Treasury Secretary Tim Geithner's team could have clamped down on the excess earlier.

And Miller is no gadfly; he has worked with colleagues on predatory lending and mortgage bankruptcy measures that have become top-tier priorities thanks to the financial crisis. He was candid in calling out Geithner for failing to fully inform Congress about his management of the bailout: "I don't feel a lot of confidence in all of this, because I don't have much idea what they're doing ... I'm a fairly conscientious member of the Financial Services Committee, and I haven't found out."

One thing Miller is sure of is that Goldman Sachs, the alma mater of Bush Treasury Secretary Hank Paulson, "had a lot of influence over" the decision to rescue AIG's counterparties (among which Goldman was No. 1).

"I don't want to sound like a right-wing conspiracy theorist who thinks the Trilateral Commission controls the world, but it seems [Goldman] had a lot of influence over this," he said, citing the Obama administration's decision to waive ethics rules to bring in a former Goldman lobbyist as Geithner's chief aide.

Miller was particularly aghast at AIG's suggestion that its Financial Products employees would sue if they were denied their retention bonus payments. "I've been wracking my brain thinking of ways we can sue them," he quipped.

Early in his administration Obama has little credibility on economic policy at a time when the country and the world needs an economic leader.  The US taxpayer now owns 80% of AIG but the management is still telling us what we can do and what we can't.  Citibank, US Bank and others should have been seized months ago - even many conservative economists agree.  There will be no additional "bailout" money so I hope they have a plan B.

Obama had political capitol and an opportunity for greatness which he has managed to waste in only two months and we all will suffer.

Comments

[karl]

This problem is as political as it is economic. Obama's M.O. has been to sit back, wait for an opening, and pounce at the opportune time. The situation is still unfolding and I think that the Obama team is constantly reacting to both new revelations and evolving public opinion (which might mean that there really is no master plan, not that that's a bad thing). The AIG bonuses (and related financial sector news) may just be the trigger for a more aggressive approach to handling the financial institutions -- he can ride the wave of Republican outrage at a time when their objections to his methods will sound the most hypocritical and obstructionist.

Of course, with this crowd the solutions they come up with are likely to be less far-reaching than you or I would like -- but I'm still willing to give this administration the benefit of the doubt on economic matters for a few more weeks.

[geoff]

I have to agree with you. Some of Obama's economic team appear stunned. I haven't settled in my mind yet whether Geithner is, as Paul Keating said, a "gigantic fool"; someone trapped in an ideological mindset that has fallen apart; or simply in over his head. Larry Summers, as usual, demonstrated on Sunday why he should never be allowed access to a microphone, you'd think Obama and his handlers would have known to have a general gag order on him from Larry's past faux pas. And then Obama's weak kneed response to the AIG bonuses at his press meeting. Why did he have to put the modifier "legal" in to his statement - that's the old weasel word to get you out of a commitment: "my hands were tired; we tried everything; excuses, excuses, excused. Be definitive Obama: WE SHALL GET THE MONEY BACK!