"Obama's economic brain trust is brain dead"

[Better Believe It]

Obama is far from a radical reformer
by JOHN R. MacARTHUR
Providence Journal
March 19, 2009

It’s one thing to rationalize the vast sums that Obama raised for his campaign from commercial and investment banks (“Well, you have to get elected,” etc.). But rationalizing the laissez-faire beliefs of Lawrence Summers and Timothy Geithner — exhibited most notably in their scandalous opposition to derivatives regulation in the Clinton administration — borders on the idiotic. The left pretends that Summers isn’t really Obama’s chief economic adviser, while the right pretends the former Treasury secretary has converted to left-wing Gaullism. In reality, Summers and Geithner are in place precisely to prevent real reform of a banking system that helped put Obama in the White House.

On budget matters, so far, Obama’s economic “brain trust” is brain-dead. Comparisons with FDR are spurious, given that the administration so far won’t even discuss restoring some form of Glass-Steagall, the New Deal law that separated investment banks and commercial banks. Meanwhile, Obama seems to have forgotten his proposed “reform” of NAFTA or of our cheap-labor investment agreement with China (so-called Permanent Normal Trading Relations). And he’s certainly not calling for higher tariffs to protect American industry and wages, or for bank nationalizations.

The Wall Street Journal’s Big Brother socialist bogeyman is a canard. There’s no authentic national economic planning in the Obama budget, just the usual hodge-podge of programs that sound good to this or that constituency, congressman or columnist.

Here’s one little bit of central planning that could have helped, but isn’t seriously addressed: rebuilding the nation’s passenger- and freight-railroad network, badly weakened by deregulation and mismanagement. The stimulus bill has $8 billion for high-speed rail lines and the proposed budget adds another $5 billion over five years. This is chump change compared with the cost of occupying Iraq and Afghanistan, and paltry next to the typical cost-plus Pentagon boondoggle.

Why not spend $50 billion on railroads? It would make the country more energy-efficient, put lots of people to work installing and upgrading track, and encourage General Electric to rehire the 1,200 people it just laid off at its locomotive plant in Erie, Pa. With faster, better trains (including urban rapid-transit lines), American companies could get back into the passenger-train-car building business, now lost to Canada and Europe, and American steel mills could profitably use some of its excess capacity.

Please read the complete article at:

http://www.projo.com/opinion/contributors/content/CT_rick18_03-18-09_1SDM2BF_v26.3e689c2.html

[ClarkUSA]

1. Another anti-Obama OP? You and Louis-Emmanuel must be twins separated at birth...

[Better Believe It]

3. Why did you post here?

Since it appears you don't have an opinion on the article that you'd like to share regarding the article.

Anyone can run around on this board launching personal attacks against posters instead of contributing to a democratic discussion and debate on economic and other issues.

Perhaps you can find a trash talk board somewhere that would meet your intellectual requirements.

[ClarkUSA]

4. Since you've joined this forum, all you do is run down Obama via one pissy OP after another.

Here's my response to you at another one of your anti-Obama OPs which you started today:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8269213&mesg_id=8269265

Enjoy your time here.

[Better Believe It]

2. Key Features of TALF and the PPP: Back To Mischief As Usual

The New TARF, the Moribund Bailout, and a Real-World Stimulus Plan
by Alan Nasser
Common Dreams
Marc 1, 2009

The alarm might well increase as some of the most disturbing elements of Ben Bernanke’s $1 trillion Term Asset-Backed Loan Facility (TALF), scheduled to begin operations on Thursday, become evident. The plan would work in conjunction with Treasury Secretary Tim Geithner’s public-private partnership (ppp), also budgeted at $1 trillion. Together, the two schemes christen some of the worst features of the financial system that has broken down.

The ground rules of ppp are byzantine. But this much is clear. The principal aims of the plan, to be implemented along with TALF, are threefold: to protect the big banks from failure by injecting them with yet more government funds, to keep these banks in private hands, and to restart the same kind of trading between banks and investors that contributed mightily to the present meltdown.

TALF restores exactly those features of the so-called shadow banking system that lead to financial instability. Investors will purchase, with the help of low-interest government loans, mortgage securities and a variety of other distressed assets from the banks. Since the plan is termed “Asset-Backed,” the banks will claim that the junk they are selling is collateralized by an array of (notoriously troubled) obligations such as credit card debt, student loans and car loans. The traded assets will continue to be marked-to-model, i.e. valued at the bloated prices set by incomprehensible models created to produce wildly inflated valuations. Thus, Treasury gives its blessing to the continued mispricing of risk. Complex, opaque and unregulated derivatives would remain in circulation.

TALF will also enlist the Federal Reserve to further protect financial institutions from the consequences of their misbehavior. This feature of TALF has received little comment. Most press attention has been directed at the Fed’s new function of providing one trillion dollars to hoped-for consumer and business borrowers. But overindebted and cash-strapped individuals and businesses have been wisely reluctant to get themselves further into debt. This does not faze Treasury or the Fed.

Please read the complete article at:

http://www.commondreams.org/view/2009/03/18-8