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Matt Taibbi Was Right to Blast Obama For Capitulating to Wall Street

There is a worrying trend amongst Obama supporters - the complete inability to fault the President for anything, even when it's obvious he screwed up. Case in point- Obama's complete failure to regulate Wall St.
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Yesterday, Bob Cesca went after Matt Taibbi for making the claim that President Obama's record on corporate America has been worse than George Bush's. Generally, I agree with Bob's assertion that this claim is off the mark (Bush presided over a virtually unprecedented era of corporate deregulation and dismantling of the welfare state, so much so that there wasn't much left when Obama got into office). But this does not mean that Taibbi wasn't right to go after Obama's record. Some of our readers went a little crazy over Taibbi's comments, accusing him of being an anti-Obama/Glenn Greenwald/Libertarian shill, all of which is pretty ridiculous if you've spent any time reading Taibbi over the past 10 years.

This is a worrying trend amongst Obama supporters - the complete inability to fault the President for anything. I agree that Obama has an incredibly difficult job, made worse by the incessant nonsense coming from all sides of the political spectrum. It is admittedly hard to figure out what criticism is warranted, and what isn't given the hyperbole (he's a baby killing drone emperor, or a radical Muslim Marxist), but Obama has screwed up on many issues, particularly when it comes to the regulation of Wall Street.

Taibbi has reported extensively on what happened after the collapse in 2008, and has done immeasurable good highlighting the extraordinary corruption in an industry that threatened to take the entire global economy down. His credentials on this topic are impeccable, and he doesn't make claims lightly. When he says Obama has rolled over for Wall Street, he's not saying it to please Glenn Greenwald's Twitter followers. He may not be right when comparing Obama's record to Bush's, but his overall point is correct.

A reader left the following comment on Bob's piece:

Guys look, I'm no firebagger/Greenwald drone/emoprog and I have, and still do, support the president, but reading the comments I can't help but conclude from the comments that the majority of people here don't read Taibbi often, if at all (and certainly don't have a clue what's in his latest book). The tendency to dismiss any critique of President Obama regardless of its legitimacy isn't healthy. Taibbi's not some screeching Obama-bashing drone like Greenwald has become where that's completely his agenda. He's fair. He gives reasons why things ended up this way and how we got to this point, many or most of them having nothing to do with Obama. Honestly he's probably harder on Eric Holder than he is Obama, Obama is kind of a footnote anyway. His big issue is the "too big to fail" paradigm, and he's disappointed that the government (i.e., Obama and the Holder DoJ) basically capitulated in the face of it, at least so far.

Also people who are saying the government can't prosecute because what they're doing isn't illegal are mistaken. That's maybe half true. There've been multiple occasions where the government has had one of these companies nailed to a wall, and they back down, or settle with a symbolic fine that is a fraction of the damage the bank has done and comes out of no individual's pocket.

Let's be intellectually honest here and not just start throwing tomatoes at Taibbi because he must be some Greenwald apostle. He's not one of those guys trying to jump into a positive Obama news cycle going "but but but DRONES SNOWDEN NSA!"

The truth is, Obama relied far too heavily on advice from people like Timothy Geithner and Larry Summers when dealing with the fallout from the financial crisis, and crafted legislation massively favorable to Wall Street, and not the general public. It's pretty clear from the record that Obama was uneasy about this, and felt the banks were getting off too lightly. But ultimately, he bowed to pressure from the almighty financial industry that rebounded with free public money, went on paying its executives record bonuses, and had little to worry about in terms of regulation.

I spoke to a friend who worked for Citibank when the reforms were rolled out, and I asked him what the changes meant for the industry. "Nothing," he told me. "Just a bit more paperwork". Everyone on Wall Street knew that it would fight any bits of meaningful legislation with intense lobbying efforts, and that new red tape would soon get cut as soon as the public stopped worrying about a complete  financial collapse.

Much of this isn't Obama's fault - he didn't deregulate Wall St in the first place (Bill Clinton can be thanked for that), and was left with the most God Almighty mess any incoming President could ever expect. A sustained war against Wall Street would have been incredibly difficult given the other dilemmas he faced, but he didn't act boldly when he had the political capital to do so. As a result, America has been left with a financial sector still dangerously out of control, and hundreds of bankers who should be in jail, not swanning off to Barbados on private jets.

Obama's legacy on reining in Wall Street isn't a good one, and his supporters have to own up to that.