When Barack Obama nominated Timothy Geithner for Treasury Secretary and appointed Larry Summers to be the chief presidential economics adviser, I became very worried. Summers had a hand in some of Bill Clinton’s deregulation policies that have contributed to our current economic problems, and Geithner was a key architect of the Wall Street bailout last fall.
Here and at other blogs, some commenters urged me to “give Obama a chance–he hasn’t even been inaugurated yet.”
Geithner confirmed my worst fears today when he rolled out the new-and-improved bailout plan (using the second $350 billion tranche from the Troubled Assets Relief Program). Economist James Galbraith came up with the name Bad Assets Relief Fund (BARF) to describe Geithner’s plan.
Other bloggers have already explained why Geithner’s proposal is an unimaginably pricey gift to Wall Street bankers at the expense of the public interest. This diary by MyDD user bobswern hits all the main points, drawing on a front-page story in the New York Times and other sources.
Writing about how Geithner prevailed over presidential advisers like David Axelrod, who wanted to attach more strings to the taxpayer money Wall Street bankers would receive, David Sirota observed,
Interestingly, the divide inside the administration seems to hearken back to a divide discussed very early on in the formation of the administration – the one whereby progressives were put in strictly political positions, and zombie conservatives were put in the policymaking positions. In this case, more progressive politicos like Axelrod was overruled by corporate cronies like Geithner.
The good news is that at least there seems to be something of a debate inside the administration, however tepid. The bad news is what I and others predicted: namely, that progressives seem to have been ghettoized into the political/salesmanship jobs, the conservative zombies shaping policy aren’t interested in having any debate with them. Worse, we’re now learning that those zombies are as rigidly ideological as their initial policies seemed to suggest.
I stand by my prediction that Geithner will turn out to be one of Barack Obama’s worst appointments. I can’t fathom why Obama wants to “own” the very worst aspects of the Bush administration’s failed Wall Street bailout, while also depriving the government of cash needed for other domestic priorities.
The stock market fell sharply today, perhaps because investors have no confidence in Geithner’s scheme and perhaps because the compromise stimulus bill that passed the U.S. Senate came straight out of bizarro world (do click that link, you’ll enjoy it).
I hope Obama will recognize his mistake and let Geithner and Summers go within a year or so, but they’re already poised to do plenty of damage to his administration.
Speaking of bad appointments, isn’t it amazing that Obama didn’t even make Senator Judd Gregg of New Hampshire promise to vote for the stimulus bill in exchange for being named Commerce Secretary? Why would you put someone in a cabinet position with influence over economic policy if that person doesn’t even support the president’s stimulus plan?
Apparently Obama’s also considering making a lobbyist for the Chamber of Commerce the main presidential adviser on judicial appointments. I’ve long anticipated that judges appointed by Obama would be corporate-friendly, pro-choice moderates in the Stephen Breyer mode, but I never imagined that a Chamber of Commerce lobbyist would be in a position to recommend only judges who would favor business interests.
If Tennessee Governor Phil Bredesen becomes Secretary of Health and Human Services, the Obama-Biden magnet is coming off my car.