As a progressive, it is getting increasingly difficult to defend Barack Obama's continued coddling of the financial industry. Not only has the Obama administration used tax payers money to bail out the toxic banks that gambled their assets away, he is refusing to properly regulate them at a time when the government actually has the power to do so.
In another infuriating move, the Obama administration has basically squashed an idea from Chris Dodd that would see the Federal Reserve lose its power to regulate banks to an independent agency not corrupted by the companies it is supposed to oversee. Writes Robert Scheer:
White House economic adviser Austan
Goolsbee frets that taking power from the Fed would cause financial
industry “nervousness.” Isn’t that the whole point of government
regulation—to make the bandits look over their shoulders before they
launch their next destructive scam?
Not so in the view of Deputy Treasury
Secretary Neal Wolin, who blithely insists that the Fed “is the best
agency equipped for the task of supervising the largest, most complex
firms,” despite the mountain of evidence to the contrary. There is some
irony in the fact that the largest of those complex firms got to be
“too big to fail” because of the radical deregulatory legislation that
Wolin drafted during his previous incarnation as the Treasury
Department’s general counsel in the Clinton administration. Wolin is
now deputy to Timothy Geithner, who as head of the New York Fed in the
five years preceding the banking meltdown looked the other way as the
disaster began to unfold.
While I am still broadly supportive of the Obama administration, this type of blatant pandering to huge financial institutions has the potential to drive progressives away from the President. There is only so long that money can continue to funneled upwards, and policy crafted directly in favor the rich before popular anger takes over. And when it does, it will be interesting to see where Obama's loyalty lies. So far, it hasn't been with the people.