What haunts the Obama administration is what still haunts the country: the stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression. There has been no legal, moral, or financial reckoning for the most powerful wrongdoers. Nor have there been meaningful reforms that might prevent a repeat catastrophe. Time may heal most wounds, but not these. Chronic unemployment remains a constant, painful reminder of the havoc inflicted on the bust’s innocent victims. As the ghost of Hamlet’s father might have it, America will be stalked by its foul and unresolved crimes until they “are burnt and purged away.”

After the 1929 crash, and thanks in part to the legendary Ferdinand Pecora’s fierce thirties Senate hearings, America gained a Securities and Exchange Commission, the Public Utility Holding Company Act, and the Glass-Steagall Act to forestall a rerun. After the savings-and-loan debacle of the eighties, some 800 miscreants went to jail. But those who ran the central financial institutions of our fiasco escaped culpability (as did most of the institutions). As the indefatigable Matt Taibbi has tabulated, law enforcement on Obama’s watch rounded up 393,000 illegal immigrants last year and zero bankers. The Justice Department’s bally­hooed Operation Broken Trust has broken still more trust by chasing mainly low-echelon, one-off Madoff wannabes. You almost have to feel sorry for the era’s designated Goldman scapegoat, 32-year-old flunky “Fabulous Fab” Fabrice Tourre, who may yet take the fall for everyone else. It’s as if the Watergate investigation were halted after the cops nabbed the nudniks who did the break-in.

Even now, on the heels of Bank of America’s reluctant $8.5 billion settlement with investors who held its mortgage-backed securities, the Obama administration may be handing it and its peers new get-out-of-jail-free cards. With the Department of Justice’s blessing, the Iowa attorney general, Tom Miller, is pushing the 49 other states to sign on to a national financial settlement ending their investigations of the biggest mortgage lenders. What some call a settlement others may find a cover-up. Time reported in April that the lawyer negotiating with Miller for Moynihan’s Bank of America just happened to be a contributor to his 2010 Iowa reelection campaign. If the deal is struck, any truly aggressive state attorneys general, like Eric Schneiderman of New York, will be shut down before they can dig into the full and still mostly uninvestigated daisy chain of get-rich-quick rackets practiced by banks as they repackaged junk mortgages into junk securities.

Those in executive suites at the top of that chain have long since fled the scene with the proceeds, while bleeding shareholders, investors, homeowners, and ­cashiered employees were left with the bills. The weak Dodd-Frank financial-reform law that rose from the ruins remains largely inoperative, since the actual rule-writing was delegated to understaffed agencies now under siege by banking lobbyists and their well-greased congressional overlords. The administration’s much-hyped Consumer Financial Protection Bureau is being sabotaged by Washington Republicans intent on blocking any White House nominee, whether Elizabeth Warren or some malleable hack, to lead it. “We can’t let special interests win this fight,” said Obama when he proposed the agency in October 2009. Well, he missed his moment to fight for both it and Warren, and the special interests won without breaking a sweat.

Rather than purge the crash’s crimes, Wall Street’s leaders are sticking to their alibi: Everyone was guilty of fomenting this “perfect storm,” and so no one is. Too-big-to-fail banks are bigger than ever, and ­Masters of the Universe swagger is back. Even Jamie Dimon of JPMorgan Chase, about the only bank chief not to be caught with a suspect balance sheet or a $1,400 office trash can, has taken to channeling Schwarzman. In June, he publicly challenged Ben Bernanke about the intolerable burdens of potential regulation—this despite a 67 percent surge in JPMorgan’s first-quarter profits and a 1,500 percent raise in his own compensation from 2009 to 2010. As good times roar back for corporate America, it’s bad enough that CEOs are collectively sitting on some $1.9 trillion in cash—much of it parked out of the IRS’s reach overseas—instead of hiring. (How many jobs can you buy for $1.9 trillion? America’s total expenditure on the Iraq and Afghanistan wars over a decade has been $1.3 trillion.) But what’s most galling is how many of these executives are sore winners, crying all the way to Palm Beach while raking in record profits and paying some of the lowest tax rates over the past 50 years.

The fallout has left Obama in the worst imaginable political bind. No good deed he’s done for Wall Street has gone unpunished. He is vilified as an anti-capitalist zealot not just by Republican foes but even by some former backers. What has he done to deserve it? All anyone can point to is his December 2009 60 Minutes swipe at “fat-cat bankers on Wall Street”—an inept and anomalous Ed Schultz seizure that he retracted just weeks later by praising Dimon and Lloyd Blankfein as “very savvy businessmen.”

Obama can win reelection without carrying 10021 or Greenwich in any case. The bigger political problem is that a far larger share of the American electorate views him as a tool of the very fat-cat elite that despises him. Given Obama’s humble background, his history as a mostly liberal Democrat, and his famous résumé as a community organizer, this would also seem a reach. But the president has no one to blame but himself for the caricature. While he has never lusted after money—he’d rather get his hands on the latest novel by Morrison or Franzen—he is an elitist of a certain sort. For all the lurid fantasies of the birthers, the dirty secret of Obama’s background is that the values of Harvard, not of Kenya or Indonesia or Bill Ayers, have most colored his governing style. He falls hard for the best and the brightest white guys.

He stocked his administration with brilliant personnel linked to the bubble: liberals, and especially Ivy League liberals. Nearly three years on, they have taken a toll both on the White House’s image and its policies. Obama arrives at his reelection campaign not merely with a weak performance on Wall Street crime enforcement and reform but also with a scattershot record (at best) of focusing on the main concern of Main Street: joblessness. One is a consequence of the other. His failure to push back against the financial sector, sparing it any responsibility for the economy it tanked, empowered it to roll over his agenda with its own. He has come across as favoring the financial elite over the stranded middle class even if, in his heart of hearts, he does not.

The economic narrative of his presidency has been bookended by well-heeled appointees with tax issues. First came his Treasury secretary, Timothy Geithner, introduced to the public as a repeat tax delinquent, just too important to attend to the fine print that troubles mere mortals. This January, when Obama at long last created a jobs council, he appointed Jeffrey Immelt, CEO of G.E., to lead it. The Times did the due diligence the White House didn’t and found that G.E. paid essentially no U.S. taxes on $14.2 billion of profit, even as it has shed one fifth of its American workforce since 2002. Were Immelt creating more new American jobs in his new administration role than he has at G.E., perhaps we could understand why Obama kept him on. But his only visible achievement has been to co-write a “progress report” on his efforts for The Wall Street Journal op-ed page in June. It read like a patronizing corporate annual report aimed at small shareholders—a boilerplate wish list of bullet points followed by a promise that “a more strategic view” would be unveiled by September, a full nine months after he took his assignment. Maybe he and the president can hash it out this summer on the Vineyard.

The roots of Obama’s capture by the corporate axis of influence inexorably trace back to his own personal Zelig, the former Clinton Treasury secretary and Harvard Corporation stalwart Robert Rubin. In The Audacity of Hope, published in late 2006, Obama called Rubin, then busily cheerleading the excessive risk at Citigroup, “one of the more thoughtful and unassuming people I know.” Two years later, when Citi cratered and threatened to take the economy with it, Rubin demonstrated his unassuming thoughtfulness by denying that he had anything to do with the toxic investments that cost taxpayers a $45 billion bailout and 52,000 Citi employees their jobs.

In his unseemly revolving-door career, Rubin not once but twice sped the Citi apocalypse—first in government, where he and his eventual successor as Treasury secretary, Larry Summers, championed the deregulatory policies that facilitated the consolidation of too-big-to-fail banks, and then in his $15 million-a-year role as Citi’s “guru,” where, by his own later account, he had no idea what was in the worthless paper the bank peddled to greedy dupes. You’d think Obama would have dumped him faster than he did the Reverend Wright, but that’s misreading him. Obama is preternaturally secure on thorny matters of race—as his magnificent speech on the subject made clear—and could distance himself from his preacher with no ambivalence. It’s “unassuming” braininess that’s his blind spot.

And so a parade of Rubin acolytes entered the White House, led by Geithner, a nearly lifelong civil servant so identified with the financial Establishment that even Mayor Bloomberg mistakenly introduced him as a Goldman alumnus at a public event in New York last year. It’s Geithner’s influence on policy, however, not his persona, that proved fateful. Not until March 2010 did the White House get its first explicit, modest jobs bill through Congress.

Obama had taken office at a true populist moment that demanded more than this. People were gagging over their looted 401(k)s and underwater homes, the AIG bonuses, and the bailouts. Howard Dean rage has never been Obama’s style—hope-and-change was an elegant oratorical substitute—and had he given full voice to the public mood, he would have been pilloried as an “angry black man.” But Obama didn’t have to play Huey Long. He could have pursued a sober but determined execution of justice and an explicit, major jobs initiative—of which there have been exactly none, the too-small stimulus included, to the present day.

By failing to address that populist anger, Obama gave his enemies the opening to co-opt it and turn it against him. Which the tea party did, dishonestly but brilliantly, misrepresenting Obama’s health-care-reform crusade as yet another attempt by the elites to screw the taxpayer. (The Democrats haplessly reinforced the charge with marathon behind-the-scenes negotiations with insurance and pharmaceutical-­industry operatives.) Once the health-care law was signed, the president still slighted the unemployment crisis. A once-hoped-for WPA-style public-works program, unloved by Geithner, had been downsized in the original stimulus, and now a tardy, halfhearted stab at a $50 billion transportation-infrastructure jobs bill produced a dandy Obama speech but nothing else.

Obama soon retreated into the tea-party mantra of fiscal austerity. Short-term spending cuts when spending is needed to create jobs make no sense economically. But they also make no sense politically. The deficit has never been a top voter priority, no matter how loudly the right claims it is. At Obama’s inaugural, Gallup found that 11 percent of voters ranked unemployment as their top priority while only 2 percent did the deficit. Unemployment has remained a stable public priority over the deficit ever since, usually by at least a 2-to-1 ratio. In a CBS poll immediately after the Democrats’ “shellacking” of last November—a debacle supposedly precipitated by the tea party’s debt jihad—the question “What should Congress concentrate on in January?” yielded 56 percent for “economy/jobs” and 4 percent for “deficit reduction.”

Geithner has pushed deficit reduction as a priority since before the inauguration, the Washington Post recently reported in an article greeted as a smoking gun by liberal bloggers. But Obama is the chief executive. It’s his fault, no one else’s, that he seems diffident about the unemployed. Each time there’s a jolt in the jobless numbers, he and his surrogates compound that profile by farcically reshuffling the same clichés, from “stuck in a ditch” to “headwinds” (first used by Geithner in March 2009—retire it already!) to “bumps in the road.” It’s true the administration has caught few breaks and the headwinds have been strong, but voters have long since tuned out this monotonous apologia. The White House’s repeated argument that the stimulus saved as many as 3 million jobs, accurate though it may be, is another nonstarter when 14 million Americans are looking for work.

In early June, the unemployment rate—7.8 percent when Obama took office and as high as 10.1 percent during his tenure—ticked upward to 9.1 percent. That cued a ubiquitous press refrain that no president since FDR has been reelected with an unemployment rate higher than 7.2 percent (as it stood when Reagan overcame a recession to win in 1984). Later that month, a plurality in a Bloomberg survey said the economy was worse now than when Obama took office.

The ultimate indignity, though, was a Washington Post / ABC News poll showing Obama in a dead heat with Mitt Romney. Mitt Romney! If any belief unites our polarized nation, it’s the conviction that Romney is the most transparent phony in either party, no matter how much he’s now deaccessioning hair products. It’s also been a Beltway truism that a Mormon can’t win the Republican nomination, let alone a Massachusetts governor who devised the prototype for “ObamaCare.” But that political calculus changed overnight. That this poseur could so quickly gain traction, even if evanescently, should alarm Obama.

It was on Monday, June 13, that the new state of play crystallized. That morning, Immelt unveiled his vacuous op-ed and rendezvoused with Obama in Durham, North Carolina, for a double-feature dog-and-pony show: a meeting of the otherwise invisible White House jobs council (only its second to date) and yet another small-bore presidential photo op promoting yet another green-tech employer illustrating the latest dim-wattage administration slogan, “Winning the Future.” Unfortunately for the White House, the Times front page delivered another message above the fold that morning: OBAMA SEEKS TO WIN BACK WALL ST. CASH. Among the objects of Obama’s affection interviewed was an unnamed Democratic financier who found it ironic that “the same president who once criticized bankers as ‘fat cats’ would now invite them to dine at Daniel, where the six-course tasting menu runs to $195 a person.”

That Monday morning was also when Romney unleashed a web video startling in its brazenness. Mockingly titled “Bump in the Road,” it dispatched a diverse parade of unemployed Americans (or actors impersonating them) to a desert, where each in turn plaintively announced in close-up, “I’m an American, not a bump in the road.” Though Romney (wisely) stayed offscreen, the ad cast him in the unlikely role of Tom Joad leading the downtrodden dust-bowl masses to salvation. Hours later, Romney aced that night’s first major GOP presidential debate by again offering himself as an economic savior. His jobs plan? “Keep government in its place” and let “the energy and passion of the American people create a brighter future.”

No one doubts that Romney is a shape-shifter par excellence, whether on abortion, health care, cap and trade, or the Detroit bailout (which he predicted would speed GM and Chrysler to their doom). In his last presidential run, he was caught fabricating both his prowess as a hunter and a nonexistent civil-rights march starring his father and Martin Luther King. But to masquerade as a latter-day FDR is a new high in chutzpah even by his standards. The only examples he can cite as a job creator are his “turnaround” of the Salt Lake City Olympics in 2002 and his ability to grow Bain Capital, the private-equity firm he founded, from “ten employees to hundreds."

The most significant workers he added to the payroll in Salt Lake City were sixteen lobbyists, at a cost of nearly $4 million, to solicit taxpayers’ subsidies—“more federal cash than any previous U.S. Olympics,” according to The Wall Street Journal. That’s hard to square with Romney’s current stand that jobs will bloom across the land if government stops giving any handouts (even to tornado victims, he said in the GOP debate) and lets the free market work its magic. As for his fifteen years in the corporate-buyout business, he was best known for the jobs Bain shredded at the once-profitable companies it took over and then demolished for parts.

It’s a record Romney perennially tries to cover up. It may have cost him his Senate race against Ted Kennedy in 1994. In that campaign, Romney was stalked by a “Truth Squad” of striking workers from a Marion, Indiana, paper plant who had lost jobs, wages, health care, and pensions after Ampad, a Bain subsidiary, took control. Ampad eventually went bankrupt, but Bain walked away with $100 million for its $5 million investment. It was an all-too-typical Romney story, which is why Mike Huckabee could nail him with his memorable 2008 wisecrack: “I want to be a president who reminds you of the guy you work with, not the guy who laid you off.” Stephen Colbert recently topped Huckabee, portraying Romney as a cross between Gordon Gekko and Jack Kevorkian because of the profitable mercy killings of companies in Bain’s care. When Romney was governor, his record was no better. A Northeastern University analysis of his term (2003–6) found that Massachusetts was one of only two states to have no growth in their labor forces. The other was Louisiana, which happened to have an excuse named Katrina.

That Romney thinks he can pass himself off as the working stiff’s savior and Obama as the second coming of the out-of-touch patrician George H.W. Bush of 1992 truly turns reality on its head. Obama’s palling around with Rubinistas may be too much for his administration’s or the American people’s good, but Romney is a bona fide plutocrat whose financial backers include David Koch and whose idea of a joke was to tell a group of out-of-work Floridians on the campaign trail, “I’m also unemployed.” Yet so far, Romney is getting away with it, and the Republican Establishment, smelling a savior, is happy to embrace and embroider his proletarian masquerade. Peggy Noonan recently anointed this well-connected son of a Detroit CEO and Michigan governor a “self-made” financial success. Should the ersatz Horatio Alger end up on a ticket with a right-wing pseudo-populist—Michele Bachmann, unlike Romney, is quite at ease with bashing Wall Street—it’s not inconceivable he could ride a sputtering recovery further than anyone expects.

There’s not much Obama can do to alter the economy by 2012, given the debt-ceiling fight, the long campaign, and nihilistic Capitol Hill antagonists opposed to any government spending that might create jobs and, by extension, help Obama keep his own. But the central question before the nation couldn’t be clearer: Who pays? The taxpayers bailed out the elite; now it’s the elite’s turn to return the favor. Massive cuts to the safety net combined with scant sacrifice from those at the top is wrong ethically and politically. It is, in the truest sense, un-American. Obama knows this, and he hit a welcome note last week when he urged some higher corporate taxes for hedge funds and the like. But his forays in this direction are tentative and sporadic. You have to wonder why he isn’t seizing the moment to articulate and fight for the big picture instead of playing a lose-lose game of rope-a-dope with the Republicans on their budgetary turf.