No doubt there are those that argue that bankers are just being rational when using government bail out money to make money for the bank's shareholders. These folks argue that it's not the banks fault. Rather, it's government's fault for not instituting the 'correct' rules. Yes, let's blame the rape victim for the rape. What me? I did nothing wrong. I was presented with such an opportunity that any hot blooded male would have done the same thing. Right.
I, for one, supported the bank bailouts. I still do. There was a problem with not putting stringent lending strings and so forth on those bailouts. That's why Tim Geitner and others need to be replaced. They never should have been part of the Obama Administration. Though, law is conservative, and Obama has certainly been conservative in his economic support for the middle class.
The Administration's recently announced measures aimed at the middle class are like feeding crumbs to the people of Haiti. Sure, they'll take those crumbs. What would you do? I would. That doesn't absolve Obama of his insane economic policies, the latest one being a spending freeze. Recall that during the campaign, McCain proposed such a policy and candidate Obama ridiculed it saying it was like using a hatchet when what you need is a scalpel. He's just handed the opposition a gift. As Krugman rightly points out, it's a stupid, cynical, wrong-headed political stunt. In an earlier post, I addressed the need for more stimulus spending rather than addressing the debt. Professor of Economics James Galbraith characterized the spending freeze proposal as like tossing red meat to the sharks in hopes that the sharks won't go after the people. Ouch. He's right, in my view.
Robert Reich hit the nail on the head in saying "...Obama’s package of middle class benefits is small potatoes. They’re worthwhile but they pale relative to the size and scale of the challenge America’s middle class is now facing. Obama can no longer afford to come up with lists of nice things to do. At the least, he’s got to do two very big and important things: (1) Enact a second stimulus. It should mainly focus on bailing out state and local governments that are now cutting services and raising taxes, and squeezing the middle class. This would be the best way to reinvigorate the economy quickly. (2) Help distressed homeowners by allowing them to include their mortgage debt in personal bankruptcy — which will give them far more bargaining leverage with morgage lenders. (Wall Street hates this.)"
Rachel Maddow had a great segment last evening in which she showed a series of bar charts on GDP and job losses by quarter for the last two years of the Bush Administration and the results during the Obama Administration. The results are striking, GDP growth and the reduced job loss numbers are a good start at turning the economy around. The economy has begun to recover, and the banking sector's not on it's death bed. This is the beginning of a recovery. Yet, what's your view of how the Obama Administration has done? They have both houses of Congress, 59 seats in the Senate (more than the R's had at the end of the Bush years) and what does Obama propose? A spending freeze. As Ms. Maddow put it "there he is on the one yard line and what does he decide to do? He decides to punt from the one yard line rather than driving it in for the score."
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