Taibbi: Obama's Big Sellout

There's no other way to say it: Barack Obama, a once-in-a-generation political talent whose graceful conquest of America's racial dragons en route to the White House inspired the entire world, has for some reason allowed his presidency to be hijacked by sniveling, low-rent shitheads.

That is the inescapable conclusion Matt Taibbi reaches in his latest Rolling Stone article, "Obama's Big Sellout". While this article definitely won't have the impact of his Vampire Squid expose of Goldman Sachs, it will nonetheless rattle some cages.

Taibbi makes the point that Obama ran, and was elected, on a progressive populist platform. His economic advisers on the campaign trail included Austan Goolsbee (a University of Chicago econ professor) and Karen Kornbluh (policy adviser and party wonk), both well known liberals advising Obama to crack down on Wall Street. The day after he was elected, Goolsbee and Kornbluh were sent packing and an economic team incestuously connected to former Treasury Secretary Robert Rubin was brought in to take the reins.

Some of you might remember Rubin as the guy who stuck a fork in the Glass-Steagall Act, clearing the path for the massive Citigroup merger and Rubin's almost immediate exodus to the new Citigroup which earned him over $140 million (no conflict of interest there...). Another thing Rubin isn't really remembered for (but should be) was his near-constant obstruction of Brooksley Born's efforts to regulate the derivatives market in the late 90's after the Long Term Capital Management disaster.

Not surprisingly, Citigroup was the first major beneficiary of the new Obama economic team, receiving a staggering $306 Billion bailout. As payback for his part in funneling the money to Citi, Timothy Geithner was elevated from his post at the New York Fed to the Secretary of the Treasury, according to Taibbi. Whether or not that's true, there can be no doubt that the taxpayers received a raw deal in this transaction, evidenced by Citigroup CEO Vikram Pandit's testimony before Congress:

Throughout it all, I can't get past the fact that the amount of money we've committed to bailing out banks was more than enough to retire every single sub-prime mortgage in the United States in full, and they were the root of the problem to begin with. I'm not saying that would have been the best use of the money, but it would have certainly been better than giving it to the banks.

Taibbi further lays out the case that Obama has allowed Wall Street fat cats to take over his economic team and that no meaningful reform will be forthcoming in his presidency. Quite the opposite, actually, as there is an effort underway to institutionalize the presidential authority to bail out firms at the whim of the president and without the consent of the Congress. I don't know why this comes as a shock to anyone; after all, we already go to war at the whim of the president and without Congressional approval.

Further, Taibbi opines that Robert Rubin is quite possibly the biggest fuck-up in the history of Wall Street, and he provides example after example of how everything Rubin touches turns to shit. It's hard to argue with the evidence, circumstantial though it may be. Taibbi seems to think that the guys in charge are simply moronic greedheads intent on stealing as much as they can, while they can, but he doesn't give them much credit beyond that.

Which leads me to the following conclusion. There are two alternate possibilities that explain the economic circumstances under which we currently exist, and neither are pleasant to consider.

Either the guys at the top are:

1) Bumbling fuckwits (in which case they don't belong running the night crew at a Dairy Queen, much less a global investment bank or offering economic advice to the leader of the free world)

or

2) They are as smart as we're led to believe, and everything has gone according to plan (in which case they've collapsed the world economy, bankrupted the U.S. treasury, and affected the largest wholesale robbery in the history of mankind)

Which world would you rather live in?

 
Best Response

I don't believe those options are fair. While Obama did use a populist approach to winning the election, it was clear that he wasn't an idiot and therefore wouldn't bow to some of the more ridiculous demands of his constituents. I think Obama's policies seem out of sync with much of his voter base, because that base has shifted further to the left as the crisis has progressed, clamoring for increasingly ridiculous measures to punish Wall Street and maim American capitalism.

While I think the post-Glass-Steagall system is deeply flawed, Obama's average voter has no idea how to fix it and probably doesn't know what Glass-Steagall is. And as smart as some people in the administration might be, this is an incredibly challenging problem and not something that the public sector is really capable of fixing on its own. Obama's presidency has not been hijacked by Wall Street, it's simply recognizing that no group has the prefect solution and is willing to listen to the finance industry that is so vilified.

Robert Rubin may not have done much good the past few years, but he was one of the brightest on the street at one point and helped make Goldman what it is today. Finally, Taibbi is too much of a sensationalist, the accusations he levels Goldman and Obama are incendiary rather than constructive, he's becoming the National Enquirer of finance and politics.

 
GoodBread:
I don't believe those options are fair. While Obama did use a populist approach to winning the election, it was clear that he wasn't an idiot and therefore wouldn't bow to some of the more ridiculous demands of his constituents. I think Obama's policies seem out of sync with much of his voter base, because that base has shifted further to the left as the crisis has progressed, clamoring for increasingly ridiculous measures to punish Wall Street and maim American capitalism.

While I think the post-Glass-Steagall system is deeply flawed, Obama's average voter has no idea how to fix it and probably doesn't know what Glass-Steagall is. And as smart as some people in the administration might be, this is an incredibly challenging problem and not something that the public sector is really capable of fixing on its own. Obama's presidency has not been hijacked by Wall Street, it's simply recognizing that no group has the prefect solution and is willing to listen to the finance industry that is so vilified.

Robert Rubin may not have done much good the past few years, but he was one of the brightest on the street at one point and helped make Goldman what it is today. Finally, Taibbi is too much of a sensationalist, the accusations he levels Goldman and Obama are incendiary rather than constructive, he's becoming the National Enquirer of finance and politics.

I honestly couldn't disagree more. Taibbi is one of the only people out there doing any sort of honest reporting. No one is saying that Obama should've bowed to the farthest of the far left, but he certainly did a total 180 and bent over a table for the banks to have their way. Let's be real here, he hoodwinked a whole lot of people.

And fuck Bob Rubin, I don't give a fuck what he did back at Goldman from 1990 - 1992, that's irrelevant. He's one of the key players in bringing down Glass-Steagall and then went right from gov't to Citigroup itself. Absolutely disgusting.

We haven't done anything to fix any of the problems - instead, we rewarded those that exacerbated them.

Let's hope the House can pull its weight and get some real reforms passed before we end up with permanent bailouts. In my opinion, and I am not alone here, we have just witnessed the greatest robbery of wealth ever. American Corporatism at its finest.

 

Great post - it's much better than reading if someone would rather be the CEO of SunTrust or Lloyd Blankfein's bdsm lover or whatever the fuck. Can anyone answer to me what citi is doing wrong? I read that their new head economist, Buiter, described Citigroup as "a conglomeration of worst practice from across the financial spectrum" in an April 2009 FT blog post. Did they just have the worst loan portfolio or are there other factors contributing to their suckitude? What are JPM, BAC, and WFC doing that they aren't? I know what makes a good IBD but makes a good full service financial institution? I think i read in the bronte capital blog that there are serious problems with IT integration and information flow within the firm. Can anyone comment as to the validity of this? Opinions from within citi are highly valued.

"Ride your bike. Drink good beer." - Fat Tire Amber Ale
 

ventured not a single degree from the crowd pleasing drivel we had shoved down our throats and up our asses in the good'ol Eastern Block. WHITE LIBERAL GUILT had more to do with getting this substitute teacher elected then any plan or idea. I, coincidentally, am still waiting for change to arrive. What Obama changed about himself was absolutely nothing, he just proved that his voting populus is as far removed from reality, as Barack is from having had the typical African-American experience growing up in the United States. Everything the man has done (more accurately, lack thereof) points to what anyone who has spent a single day in Illinois and especially Chicago knew years ago. This incompetent political dilletante who (prior to his election as PRESIDENT!!!) was not even qualified to be Dean of a law school or Senior Partner of a name-brand law firm.

I couldn't be more greatful for Obama and his uselessness. I have enjoyed few things in my life as meeting honest hard working people who cringe and growl through their teeth that they voted for a Bolshevik. Seeing him do the exact same things he swore he wouldn't please me to no end. I am glad Americans are getting to feel on their own skin what tens of millions of us ran away from and are learning the hard way why CAPITALISM is the only American way.

Keep up the good work Comrade.

Dasvidanya.

 

stupid article from a stupid magazine and stupid author. obama & co are and have been a bunch of commie hacks from the start. the only (positive) surprise is how utterly incompetent they've been at executing their destructive agenda. george soros must be FURIOUS

 
MarginCalling:
stupid article from a stupid magazine and stupid author. obama & co are and have been a bunch of commie hacks from the start. the only (positive) surprise is how utterly incompetent they've been at executing their destructive agenda. george soros must be FURIOUS

In the words of Tom Jackson to Michael Irvin:

Excuse me...Are you retarded?

::cut to commercial::

 

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