Paul Krugman is disappointed. So are a lot of other economists and commentators who had hoped that President Obama and Treasury Secretary Timothy Geithner would leap into the economic crisis and basically take over Wall Street in the name of the federal government, throw all the Wall Street bums out, and rescue us from more economic disaster.
Dr. Krugman bemoans the retro look of the Obama rescue plan:
If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.
This is more than disappointing. In fact, it fills me with a sense of despair.
After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.
And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.
Frankly, I don’t know enough about economics to know who’s right, and I wish I did, because regardless of the theories and the confusing terms and the dense legalisms, the twists and turns of the economy, boom or bust, touch our lives in ways we can’t even think. So while I don’t know if John Cole’s pithy response to the leaked Geithner plan to rescue doomed assets is right in terms of monetary policy, I do know that the last line — “The Prognosis — We are so screwed” — is right in saying it matters to us all.
The other thing that strikes me is how President Obama seems to be confounding a lot of people. Of course the Republicans are predicting doom and destruction if his budget passes, but then, they are paid to say that, and given their track record of both predicting outcomes — they said the same thing about Bill Clinton’s economic plans and got it 180 degrees wrong, and then we all remember being greeted as liberators in Iraq — and managing the economy, they have put themselves in the position of the captain of the Titanic complaining that the rescue ship Carpathia didn’t have enough caviar. (Oh, that’s right; Captain Smith went down with the ship.)
If Mr. Obama is catching the requisite flack from the right, he’s also getting it from the left, and it’s not just over economics. We’re still sending troops to Afghanistan, we’re not getting of Iraq soon enough, the Pentagon is still discharging soldiers for being gay, and it appears his administration is dragging its feet in going after the miscreants of the Bush administration. It’s way too early to pass judgment on the legacy of the Obama administration, but the one thing you can say is that all of the predictions made by folks on both sides of the political spectrum have been off the mark: he’s not the wild-eyed socialist Black Panther liberal the right feared he was (and in a perverse way hoped he would be so they could raise campaign funds on secret photos of Angela Davis playing on the White House swing set), and he’s not the crusading progressive mowing down the malefactors of great wealth and purveyors of narrow-minded homophobia and intolerance that the liberals hoped he would be, either. The most predictable — and maddening — thing Barack Obama has done is defy predictions.