Two More Candidates for the McChrystal Treatment

It's not working. Time for the president
to concede that the economy is at best stagnating and at worst about to
take another steep nose dive. I don't know if we are headed for another
Great Depression, as Nobel Prize economist Paul Krugman dared suggest
recently, but it is amply clear that the Obama strategy, inherited from
George W. Bush, of bailing out Wall Street in the forlorn hope that it
would repair the economic damage the fat cats inflicted on the rest of
us has not worked.

The housing market remains in dire shape,
and with it the nest eggs of Americans who are responding by squelching
their appetite for consumption. The Wall Street hustlers were made
whole, but not so the people whose home mortgages the banks are
foreclosing, or businesses and their customers looking for the credit
that the banks had promised to free up.

The president conceded last week that our
economy is 8 million jobs in the hole despite his bailout and stimulus
program. With deficits running wild, heartless Republicans get to claim
that six months more of unemployment insurance to 1.7 million
out-of-work people whose benefits have ended is more than we can
afford.

Of course it's not. That would be a $34
billion outlay to people who would actually spend the money instead of
using it for acquisitions, as the big banks have done with far larger
gifts of taxpayer funds. That the Republicans who favor huge military
spending and tax breaks for the rich and who launched the Wall Street
bailout are being hypocritical scoundrels when they say we don't have
the money to help ordinary folks is obvious. But the problem is that
Barack Obama embraced the GOP strategy, and the failures of the
bailouts to turn the economy around, along with the cost of two wars,
are now his problems to explain.

What we need is for the president's
economic hotshots, Timothy Geithner and Lawrence Summers, to grant
damaging interviews to Rolling Stone as Gen. Stanley McChrystal
recently did in self-destructing. Perhaps then President Obama would
have the gumption to fire the misleaders of his economic team. It was
always bizarre that those two, who did so much to wreck the economy,
were put in charge of the effort to salvage it. Their previous records
should have provided ample warning that their economic outlook begins
and ends with the demands of Wall Street.

It was Geithner who, as head of the New York Fed, presided over the
$180 billion bailout of AIG, which, as revealed by the 500-page
documented record of that travesty released last week by the Financial
Crisis Inquiry Commission, was a scam to pass taxpayer money to Goldman
Sachs and the other large banks that had created the problem. And it
was Summers who as President Bill Clinton's treasury secretary pushed
through the Commodity Futures Modernization Act, which guaranteed
"legal certainty" for the toxic derivatives packages that Goldman and
the others sold. At the time Summers assured Congress that "the parties
to these kinds of contracts are largely sophisticated financial
institutions that would appear to be eminently capable of protecting
themselves from fraud and counterparty insolvencies. ..."

For such not-so-prescient but very
convenient insight, Goldman Sachs rewarded Summers with $200,000 for
two speeches he gave to its executives while he was an adviser to
candidate Obama. Not surprisingly, the new financial regulations
proposed by this administration and soon to be signed into law let
Goldman and the others so much at fault off the hook.

There is enormous and justifiable populist
outrage out there over the antics of a runaway Wall Street that is not
being held accountable. Obama could tap into that outrage by taking his
cues from a true populist, Democratic Sen. Russ Feingold of Wisconsin.
One of only eight senators to vote against the Clinton-backed 1999
repeal of the Glass-Steagall Act, which had done so much to protect the
economy, Feingold voted against the Bush bailout too and is now
breaking with Obama on his so-called financial reform:

"The bill does not eliminate the risk to
our economy posed by 'too big to fail' financial firms, nor does it
restore the proven safeguards established after the Great Depression,
which separated Main Street banks from big Wall Street firms and are
essential to preventing another economic meltdown. The recent financial
crisis triggered the nation's worst recession since the Great
Depression. The bill should have included reforms to prevent another
such crisis. Regrettably, it did not."

The president's record on the economy is
even worse than his performance in Afghanistan, and a reversal of
course is much in order. If he doesn't get the message now, the voters
will give it to him loud and clear come the November midterm
elections.