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Obama Fatigue

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Since President Obama first assumed office, it hasn’t been too difficult to find harsh criticism of the new administration.  One need only tune in to the Fox News, where an awkward Presidential sneeze could be interpreted as a “secret message” to Bill Ayers or George Soros.  Nevertheless, with the passing of time, voices from across the political spectrum have joined a chorus of frustration with the Obama agenda.

On February 26, 2009 – only one month into the Obama Presidency – I voiced my suspicion about the new administration’s unwillingness to address the problem of systemic risk, inherent in allowing a privileged few banks to enjoy their “too big to fail” status:

Will Turbo Tim’s “stress tests” simply turn out to be a stamp of approval, helping insolvent banks avoid any responsible degree of reorganization, allowing them to continue their “welfare queen” existence, thus requiring continuous infusions of cash at the expense of the taxpayers?  Will the Obama administration’s “failure of nerve” –  by avoiding bank nationalization — send us into a ten-year, “Japan-style” recession?  It’s beginning to look that way.

By September of 2009, I became convinced that Mr. Obama was suffering from a degree of hubris, which could seal his fate as a single-term President:

Back on July 15, 2008 and throughout the Presidential campaign, Barack Obama promised the voters that if he were elected, there would be “no more trickle-down economics”.  Nevertheless, his administration’s continuing bailouts of the banking sector have become the worst examples of trickle-down economics in American history – not just because of their massive size and scope, but because they will probably fail to achieve their intended result.

Although the TARP bank bailout program was initiated during the final months of the Bush Presidency, the Obama administration’s stewardship of that program recently drew sharp criticism from Neil Barofsky, the retiring Special Inspector General for TARP (SIGTARP).  Beyond that, in his March 29 op-ed piece for The New York Times, Mr. Barofsky criticized the Obama administration’s failure to make good on its promises of “financial reform”:

Finally, the country was assured that regulatory reform would address the threat to our financial system posed by large banks that have become effectively guaranteed by the government no matter how reckless their behavior.  This promise also appears likely to go unfulfilled.  The biggest banks are 20 percent larger than they were before the crisis and control a larger part of our economy than ever.  They reasonably assume that the government will rescue them again, if necessary.

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Worse, Treasury apparently has chosen to ignore rather than support real efforts at reform, such as those advocated by Sheila Bair, the chairwoman of the Federal Deposit Insurance Corporation, to simplify or shrink the most complex financial institutions.

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In the final analysis, it has been Treasury’s broken promises that have turned TARP – which was instrumental in saving the financial system at a relatively modest cost to taxpayers – into a program commonly viewed as little more than a giveaway to Wall Street executives.

It wasn’t meant to be that.  Indeed, Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals – whether born of incompetence, timidity in the face of a crisis or a mindset too closely aligned with the banks it was supposed to rein in – may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises.  This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy.

Another unlikely critic of President Obama is the retired law school professor who blogs using the pseudonym, “George Washington”.  A recent posting at Washington’s Blog draws from a number of sources to ponder the question of whether President Obama (despite his Nobel Peace Prize) has become more brutal than President Bush.  The essay concludes with a review of Obama’s overall performance in The White House:

Whether or not Obama is worse than Bush, he’s just as bad.

While we had Bush’s “heck of a job” response to Katrina, we had Obama’s equally inept response and false assurances in connection with the Gulf oil spill, and Obama’s false assurances in connection with the Japanese nuclear crisis.

And Bush and Obama’s response to the financial crisis are virtually identical:  bail out the giant banks, let Wall Street do whatever it wants, and forget the little guy.

The American voters asked for change.  Instead, we got a different branch of the exact same Wall Street/military-industrial complex/Big Energy (BP, GE)/Big Pharma party.

Another commentator who has become increasingly critical of President Obama is Robert Reich, Secretary of Labor in the Clinton Administration.  Mr. Obama’s failure to push back against the corporatist politicians, who serve as “reverse Robin Hoods” enriching CEOs at the expense of American workers, resulted in this rebuke from Professor Reich:

President Obama and Democratic leaders should be standing up for the wages and benefits of ordinary Americans, standing up for unions, and decrying the lie that wage and benefit concessions are necessary to create jobs.  The President should be traveling to the Midwest – taking aim at Republican governors in the heartland who are hell bent on destroying the purchasing power of American workers.  But he’s doing nothing of the sort.

As attention begins to focus on the question of who will be the Republican nominee for the 2012 Presidential election campaign, Obama Fatigue is causing many people to appraise the President’s chances of defeat.  The excitement of bringing the promised “change” of 2008 has morphed into cynicism.  Many of the voters who elected Obama in 2008 might be too disgusted to bother with voting in 2012.  As a result, the idea of a Democratic or Independent challenger to Obama is receiving more consideration.  Rolling Stone’s Matt Taibbi recently provided this response to a letter inquiring about the possibility that Elizabeth Warren could make a run for the White House in 2012:

A few months ago I heard a vague rumor from someone who theoretically would know that such a thing was being contemplated, but I don’t know anything beyond that.  I wish she would run.  I’m not sure if it would ultimately be a good thing or a bad thing for Barack Obama – she could fatally wound his general-election chances by exposing his ties to Wall Street – but I think she’s exactly what this country needs. She’s totally literate on the finance issues and is completely on the side of human beings, as opposed to banks and oil companies and the like.  One thing I will say:  if she did run, she would have a lot more support from the press than she probably imagines, as there are a lot of reporters out there who are reaching the terminal-disappointment level with Obama ready to hop on the bandwagon of someone like Warren.

If Elizabeth Warren ultimately decides to make a run for The White House, Mr. Obama should do the right thing:  Stop selling the sky to people and step aside.


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More Disaster And Dishonesty

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Unfortunately, the cynicism expressed in my last posting was well-founded.  The Japanese government has been misleading everyone about the extent of the nuclear hazards at the aptly-named Fukushima power plant.  The only remaining question is whether the Japanese government was knowingly misleading everyone or whether it was just passing along the deception generated by the Tokyo Electric Power Company (TEPCO).  If the latter is the case, the Japanese are living under a similar system of “regulatory capture” to what we have in the United States.  The frustration I expressed about the difficulty involved in attempting to obtain credible information about the Japanese nuclear crisis was experienced and discussed by a number of other commentators.  Clive Crook put it this way:

From the start of this calamity I have wanted to know, “What is the worst that can happen at these nuclear sites?  Suppose everything that could go wrong does go wrong:  what then?”  I still don’t know the answer.  In what I have read so far — dozens of articles –nobody who knows what he is talking about has spelt this out carefully.

We are now learning that in 2008, the Japanese government had been warned by the International Atomic Energy Agency (IAEA) that the nuclear reactors on the island nation could not withstand an earthquake.  Through cables obtained by WikiLeaks, The Telegraph was able to provide this report:

The document states:  “He [the IAEA official] explained that safety guides for seismic safety have only been revised three times in the last 35 years and that the IAEA is now re-examining them.

“Also, the presenter noted recent earthquakes in some cases have exceeded the design basis for some nuclear plants, and that this is a serious problem that is now driving seismic safety work.”

The cables also disclose how the Japanese government opposed a court order to shut down another nuclear power plant in western Japan because of concerns it could not withstand powerful earthquakes.

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Another cable reported to Washington local concerns that a new generation of Japanese power stations that recycle nuclear fuel were jeopardising safety.

The cable, quoting a local newspaper, reports:  “There is something precarious about the way all electric power companies are falling in step with each other under the banner of the national policy.  We have seen too many cases of cost reduction competition through heightened efficiency jeopardizing safety.”

The cables also disclose how Taro Kono, a high-profile member of Japan’s lower house, told US diplomats in October 2008 that the government was “covering up” nuclear accidents.

The outrage expressed by Japanese citizens over their government’s handling of the entire situation – both pre-crisis and post-tsunami, is rapidly receiving more coverage.  American journalists who are covering the situation are expressing concern over their own safety.  NBC’s Lester Holt and his crew had been exposed to what was described as  “minute levels” of radiation, which was found on their shoes.

At a hearing before the House Energy and Commerce Subcommittee on March 16, Nuclear Regulatory Commission Chairman Greg Jaczko testified that despite the fact that the Japanese government had established an evacuation zone with a radius of only 12 miles from the Fukushima plant, the NRC had recommended a 50-mile evacuation zone for U.S. forces and American citizens.

ABC News quoted the reaction of an expert from Europe, who provided a harshly different message than the vague statements issued by the Japanese government:

“There is talk of an apocalypse and I think the word is particularly well chosen,” European Union’s energy commissioner Günther Oettinger said today, according to various reports.  “Practically everything is out of control.  I cannot exclude the worst in the hours and days to come.”

The coming days will reveal the extent of the misrepresentations by TEPCO and the Japanese government concerning the threat posed by the hazardous situation at the Fukushima power plant.  As I said last time:  It’s not looking good.


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