Time and again, Obama has defined down Wall Street reform. He went from calling for a foreclosure freeze as a candidate to handing mortgage servicers $75 billion in no-strings incentives—a plan that has left foreclosures churning at more than 350,000 a month. He wagged his finger at bailout recipients, then let them off the hook with Treasury Secretary Tim Geithner’s meaningless “stress tests.” And now, the White House’s answer for “too big to fail” banks is to help them fail in an orderly fashion, with taxpayer money—basically institutionalizing the bailout. Never mind not letting the banks get that big in the first place.
This trend started, as many have noted, when Obama assembled the most conventional economic thinkers in Washington to lead his declared search for unconventional solutions. He made so much fuss over not hiring lobbyists in his administration that people who worked for Human Rights Watch couldn’t get jobs. Yet, his economic team is crammed with Wall Street insiders. Chief economic adviser Larry Summers took in nearly $8 million in consultancy and speaking fees from Wall Street in 2008 alone.
Arianna Huffington was among Obama’s loudest, most gushing supporters during the campaign. Looking back on the year since Election Day 2008, through the lens of Obama campaign manager David Plouffe’s new book, she asked chilling questions about the company he keeps today. Her essay is worth quoting at length:
Reading the book, I often found myself wondering what Candidate Obama would think of President Obama. Would he look at what the White House is doing and say, “That’s what I and my supporters worked so hard for?”
How did the candidate who got into the race because he’d decided that “the core leadership had turned rotten” and that “the people were getting hosed” become the president who has decided that the American people can only have as much change as Olympia Snowe will allow?
How did the candidate who told a stadium of supporters in Denver that “the greatest risk we can take is to try the same old politics with the same old players and expect a different result” become the president who has surrounded himself with the same old players trying the same old politics, expecting a different result?
All of this is before we even get to foreign policy, or social issues like gay civil rights and criminal justice reform. Obama’s environmental team makes a far more credible claim to the reform mantle than its economic or health care counterparts. But it remains to be seen whether the White House will sideline the true reformers when the climate change debate begins, too. Already, Baucus is vowing to gum up the climate change bill in the same way he did health care. Will the White House again make him a king?