RUNNING SCARED

How well laid were “the best laid plans….?” An enormous chasm has opened between Obama’s election promises and their fulfillment. His waffling has created a yawning gap in the Democrat’s hopes for the off-year election and for 2012. The absurd health care “reform:” bill that is before the Senate is a “lose-lose” situation for Obama. If it is passed he will forever be known as the president who “caved.” If it is rejected, he will be known as the President who couldn’t control his own party. All of this because ideology trumps pragmatism, and expediency trumps necessity. His attempts to assuage the anger of the opposition have led him into a swamp.

Never mind the health care mess, how about the promise to introduce new controls on the financial system? How about the reality that having bailed out the banks with the “TARP” system, and watching those same banks return to improving their profits by investing in the very financial instruments that brought them down in the first place. Under the president, there has been nothing but empty threats about bonuses and salaries in the financial world, empty promises to reform the system from its continuing state of casino-gambling style derivatives.

The President can say “The banks just don’t get it,” all he likes. But his strength now seems to be speech-making. Ruefully I remember that his opposition said that it took more than eloquence to make a leader. Is it happening? Sadly, yes.

I am spurred to write this with the news that the French Finance Minister has announced a 50% tax on bank earnings that exceed a certain amount, she also is expected to levy the same tax on bankers whose personal income from stock options, and bonuses rises above a certain figure. In the U.K. there have already been moves made in the same direction. But not in the U.S. – where the “Free Market” rules and the whole word has inherited the fallout from the policies of an economist who is a big fan of Ayn Rand and her insidious brand of libertarianism. Right, Alan Greenspan, who admitted he had been wrong, that the marketplace did not automatically react and solve its own problems – is an Ayn Rand devotee! Talk about chaos.

Can you imagine what would happen if Obama and his Wall-street-centred finance people decide actually to take action against abuses? We have seen how powerful Big Insurance is in the face of a threat to their profits. It is beyond imagining what Big Finance would do if suddenly all those promises for reform were to turn into action.
The irony is that when financial ruin was hovering like a hungry albatross, banks took billions to save themselves. Now, in typical free market Wall Street fashion, they are buying their way out by selling enormous new stock issues, which are being snapped up by investment houses also on the route to quick and easy profits. The fact is that, not only do the bankers “not get it,” but the President had no idea how powerful the forces arrayed against him were and still are.

There is no reason for Canadians to sit smugly with our own Health Care system, or our well-run banks, or a government that, surprisingly for real Tories, actually thinks we can spend our way out of recession. How novel. How Keynsian.

But the U.S. trudges along in its own unchanging rut. The Securities Exchange Commission has still not moved to demand disclosure on the running of derivatives and hedge funds. No one has even thought of indicting the rating companies (Moody’s and S&P) for their part in declaring mortgage backed securities a triple A investment.
It is enough to turn a thinking man into a Socialist. At least then the preposterous claims by the “tea-baggers would gain some credibility.

Finally, I feel sorry for the man who started out in the bright sunshine of hope and has disappeared into the gloom of defeat. I feel most sorry for the millions of Americans who still believe that change is possible.