Who Are You and What Have You Done With the Community Organizer We Elected President?

What's up with Barack Obama? The candidate
for change once promised to take on the powerful banking interests but
is now doing their bidding. Finally, a leading Democrat, in this case
Senate Banking Committee Chairman Chris Dodd, has a good idea for
monitoring the Wall Street fat cats who all but destroyed the American
economy, and the Obama administration condemns it.

Dodd wants to take supervisory power from
the Federal Reserve, which is controlled by the banks it pretends to
monitor, and put it in the hands of a new independent agency. That
makes sense given the Fed's abject failure to properly monitor the
financial sector over the past decade as that industry got drunk on
greed. As Dodd's spokeswoman Kirstin Brost put it: "The Federal Reserve
flat out failed at supervising the largest, most complex firms." But
White House economic adviser Austan Goolsbee frets that taking power
from the Fed would cause financial industry "nervousness." Isn't that
the whole point of government regulation-to make the bandits look over
their shoulders before they launch their next destructive scam?

Not so in the view of Deputy Treasury
Secretary Neal Wolin, who blithely insists that the Fed "is the best
agency equipped for the task of supervising the largest, most complex
firms," despite the mountain of evidence to the contrary. There is some
irony in the fact that the largest of those complex firms got to be
"too big to fail" because of the radical deregulatory legislation that
Wolin drafted during his previous incarnation as the Treasury
Department's general counsel in the Clinton administration. Wolin is
now deputy to Timothy Geithner, who as head of the New York Fed in the
five years preceding the banking meltdown looked the other way as the
disaster began to unfold.

Why is Barack Obama allowing these
retreads from the Clinton era who went on to great riches on Wall
Street to set economic policy for his administration? The fatal
hallmark of this president's financial policy is that it is being
designed by the very people whose previous legislative efforts created
the mess that enriched them while impoverishing the nation, and they
now want more of the same.

In the Clinton years, Wolin was general
counsel to then-Treasury Secretary Lawrence Summers, the key architect
of the radical deregulation that caused the recent banking collapse.
Summers went off to work for hedge funds and banks that paid him $15
million in 2008 while he was advising Obama. Meanwhile, Wolin became
general counsel for Hartford Insurance Corp., which had to be bailed
out by the taxpayers because it took advantage of the radical
deregulation that he helped write into law.

Wolin, Geithner and Summers were all proteges of Robert Rubin, who, as
Clinton's treasury secretary, was the grand author of the strategy of
freeing Wall Street firms from their Depression-era constraints. It was
Wolin who, at Rubin's behest, became a key force in drafting the
Gramm-Leach-Bliley Act, which ended the barrier between investment and
commercial banks and insurance companies, thus permitting the new
financial behemoths to become too big to fail. Two stunning examples of
such giants that had to be rescued with public funds are Citigroup
bank, where Rubin went to "earn" $120 million after leaving the Clinton
White House, and the Hartford Insurance Co., where Wolin landed after
he left Treasury.

Both Citigroup and Hartford would not have
gotten into trouble were it not for the enabling legislation that the
three Clinton officials pushed through while they were in power. But
even with that law, had Geithner been on the case protecting the public
interest while head of the New York Fed much of the damage could have
been avoided.

Thanks to the legislation that Wolin
helped write, the limits preventing mergers between insurance companies
and banks imposed during Franklin Roosevelt's presidency was reversed.
Hartford got into banking, and as The Washington Times observed in a
scathing editorial, "Hartford ... rushed to buy regulated savings and
loans just so they could call themselves banks and qualify for
government TARP funds." Wolin collected his millions while the
taxpayers were obliged to cover Hartford's losses.

It is depressing for a columnist who had
great hopes for Obama to be forced by the facts to credit editors at
the right-wing Washington Times for getting it right when they opined:
"Revolving doors between industry and the administration and fat-cat
political contributors getting bailed out at taxpayer expense sound
like business as usual. This certainly isn't change we can believe in."
Please, Mr. President, say it ain't so.