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A Bad Fix Would Be No Fix

Posted on Mar 12, 2009

By Eugene Robinson

    Shouting “socialism” didn’t work, so now they’re yelling “overload” and “lack of focus.” Critics of the Obama administration counsel the president and his aides to spend every waking hour—and every available dollar, including stray coins found behind the cushions of the Oval Office couch—on the paralyzing financial crisis. What these critics really want, though, is to delay or derail the progressive reforms that voters elected President Obama to carry out.

    Advice to “fix” the financial system before even thinking about health care, energy or education is either misguided or disingenuous. Fortunately, Obama seems to be ignoring all the chatter. This isn’t about Rahm Emanuel’s too-cute admonition not to “waste” a good crisis. It’s about honoring a clear mandate.

    The banking meltdown is a genuine emergency, to put it mildly. But the worst thing Obama could do would be to allow the baying titans of Wall Street, the conservative commentariat and the overcaffeinated infotainers who “cover” the financial world on cable television to stampede him into premature, half-baked action. The last thing anyone needs is a new, multitrillion-dollar bailout for the banks—recapitalization, nationalization, receivership, whatever you call it—that turns out to be no more definitive than all the other bailouts we’ve tried.

    Wall Street’s impatience is understandable; the geniuses of Lower Manhattan just want to get back to business as usual, having failed to notice that business as usual is no longer remotely acceptable. Obama’s political opponents have a subtler motive: to occupy, exhaust and impoverish the administration, making its promised domestic initiatives impossible.

    The “overload” criticism makes sense until you think about it. There is general agreement that our system of health care, which leaves 46 million Americans uninsured, is unfair, wasteful and ruinously expensive. Anyone with a pocket calculator can see that as the baby boomers retire and become intimately familiar with the infirmities of old age, Medicare costs will bankrupt the Treasury. Waiting to tackle the problem will only make an eventual fix more expensive and more disruptive.


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    So the loudest complainers—Republicans who claim to stand for fiscal prudence, business leaders who claim to be able to read a balance sheet—ought to be the biggest cheerleaders for Obama’s decision to make a 10-year, $634 billion “down payment” on reform. But they don’t like the fact that Obama wants to fund that down payment, in part, by returning tax rates for the wealthy to the reasonable levels that were in place during the boom years of the Clinton administration.

    Politically, there are no winning arguments against fixing health care or reversing the tax-cutting excesses of the Bush administration. A more promising tactic for critics is to attack the administration for trying to do too much and taking its eye off the ball. 

    I would argue that a laser-like focus on the financial crisis, to the exclusion of everything else, would be unlikely to improve the situation and might actually make things worse. Given that we’ve already poured well over $1 trillion into the financial system, so far to minimal effect, how can anyone be confident that dumping in, say, another $2 trillion would magically turn things around? Do those who blithely argue for nationalizing Citigroup have any sense of how complicated that would be? Do the administration’s critics really want our government to run a huge chunk of the banking sector, or do they just want Obama to be bogged down in a financial Vietnam?

    I’ve been critical of the administration for a lack of transparency in handling the Wall Street crisis—officials should level with us about which banks are insolvent and which aren’t, and about the size of the overall problem. But I don’t fault the White House or the Treasury for a lack of haste. If there were an obvious, guaranteed solution, we’d know it by now. Unfortunately, there isn’t.

    One way or another, we’re going to borrow an obscene amount of money—mostly from China and the Persian Gulf states—to try to put the economy on a sustainable footing. Here’s the real question: Do we throw all that money into the apparently bottomless pit of Wall Street’s irresponsibility and greed? Or do we spend some of it on initiatives that would make the American people healthier, better educated and less dependent on foreign oil—and that, in the long run, should make us all more prosperous?

    Tell me, what is the real distraction?
    Eugene Robinson’s e-mail address is eugenerobinson(at)
    © 2009, Washington Post Writers Group

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By ThatDeborahGirl, March 15, 2009 at 3:56 am Link to this comment
(Unregistered commenter)

By dr wu, March 14 at 1:59 pm #

Obama’s rule of 3: energy,education, health care. Really, they don’t seem like economy-makers.

Obama’s Rule of 3 seems like a much better option than throwing money to people who seem determined to waste it. For instance Health care: Health care doesn’t just create a demand for doctors, nurses, health aides- but it also spans to medical supplies, medicines, research and even down to clerical, janitorial, giftshop workers - volunteer opportunities- tell me, when’s the last time you heard of a candy striper in a hospital?

Wall Street and corporate America give us the same answer. Give us the money. We promise, we know best what to do with it. And then they line their own pockets, the pockets of their cronies, redecorate their offices, hop on the corporate jet and continue their champagne lifestyle.

Meanwhile the reality is, CitiGroup is making my family jump through crazy hoops, if they approve us at all, just to add another two grand to a loan I already have w/ them (and have paid down substantially) so I can get a new car to replace a 17 year old car that recently died never to recover. And we need the second car so we don’t overtax the 11 year old NEWER car we have trying to get back and forth to work and other family needs.

Is this fair? Especially considering they were given money from the American people with the mandate - use this money to help the American people.

Well hell, I am the American people. And if you think the banks or city or anyone is trying to give John & Jane Doe money for housing, transportation, food, I’m talking BASIC needs here folks - you’ve got another think coming.

Wall Street is a bottomless pit. Help the people who really need the jobs and who REALLY make the economy work. As far as I can see, Obama’s plan to create jobs by solving problems we already have is the best of both worlds if people just get over the fact that yes, damnit, he’s black already! His plan is the awesome and it’s the best we’ve got. WORK WITH HIM, not against him as the GOP is determined to do.

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By dr wu, March 14, 2009 at 10:59 am Link to this comment

Housing bubbles,hi-tech bubbles—have failed us. Yes, there were highs but also devastating lows. So what else for our economy? Obama’s rule of 3: energy,education, health care. Really, they don’t seem like economy-makers. Nor do the Wall Streeters who click on mice,flip papers and sell illusions through fraud.

In the past the combustion engine was big, as were gasoline, electricity—compared to these, pardon the pun, we seem to be running out of stream.

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By yours truly, March 14, 2009 at 9:24 am Link to this comment
(Unregistered commenter)

“Do those who blithely call for nationalizing Citibank have any idea of how complicated that would be?”  Unfortunately the author is buying into the mistique about the inpenetrable labyrinth of high finance, which bankers themselves perpetrate in order to keep control & the spoils to themselves.  The savings & loan collapse thirty years ago proved that not only could government take over a failing financial industry, but quickly put humpty-dumpty back together again & make a bundle for the tazpayers, to boot.  And considering that the federal employee’s salary is linked to that of member’s of Congress, there’d be no hundred million buckaroo bonuses at the end of the year, not to mention the hyper-inflated salaries of the industry’s CEOs.  What it comes down to is that in banking and finance, as in health care, privatized public service is an oxymoron.

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By Purple Girl, March 14, 2009 at 3:08 am Link to this comment

Stop mincing words, these people having been trying to destroy our country for at least 30 yrs.
Trickle down is the beloved economic stratedgy of Monarchies and Dictators.The masses gnerate the wealth through labor and the wealthy siphon off and hoard as much as posssible-Only releasing resources and capital in a ‘Trickle’. This evenutally ‘starves’ out the masses who are also the consumers, and tax payers who fuel the economic engine.
Repugs have allowed Corps to become family crests- at best. At worst they have become the Communist czars which own and control not only all the necesssary resources, but also the marketplace. Killing off small business and independent vendors. We are not only limited to be employed by them, buying only the products they offer, but also become in debted to them. Worse yet is the ability of these Marketeers to lay bets that the system will fail.
so the thought it is merely a grudge that motivates the repugs is naive, they have a VESTED interest in assuring We do not succeed. That maintains the status quo of the Social class structure and the power of the Corp Rule.
America was founded on Socialist Ideals- one need only reflect on the Words “For the People & By the People”. This did not mean just our voting rights (which the Repugs and Corps attack consistently), but also the access and Control of our Free market system.Everytime a Repugs opens their mouths they only further confess to High Treason.Why do you think they have maintained their ‘Red’ Gang Color- the color of the ‘Coats’ they have been wearing for over 200 yrs.Is it really Ironic it was a George who thought himself a King who finally brought US to our knees?Or Just Cheney’s since of Poetic Justice, why not Jeb?
I won’t even start about how the Religious Right is attempting to become the American ‘Vatican’.

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By wildflower, March 13, 2009 at 7:29 pm Link to this comment

It’s a sight to behold, Eugene.  Former President Bush was in office for eight years, and at no time did I hear the Republicans ask Bush to “fix” anything. Bush’s lies and illegal invasion of Iraq were OK with the Republicans; Bush’s torture policies were OK with the Republicans; Halliburton’s overcharges and tainted water were OK with the Republicans; the breeches in our laws were OK with the Republicans; Cheney’s secret energy meetings were OK with the Republicans. The “OK” list went on and on - anything and everything was OK.

But now that Barack Obama has been elected to the Presidency everything has changed dramatically. The same groups of Republicans that have been “seen but not heard from” during the past eight years are suddenly scrambling all over the place demanding that President Obama “fix” this, no,“fix” that. What a group of deceitful scum. If they cared anything about this country and it’s economy, why didn’t they ask Bush to “fix” it before it became such a crisis?  No, you’re right, Eugene. The motives of these irresponsible jerks are rather obvious.

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By Wellington III, March 13, 2009 at 11:55 am Link to this comment
(Unregistered commenter)

Americans can escape Obama taxes by use of offshore holding companies and offshore trusts:

corporate inversion
offshore corporation
incorporate offshore
offshore banking
offshore packages
offshore incorporations

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