25 August 2009

Ugly economics.

WaPo reports that yesterday President Obama went golfing in ultra-posh Martha's Vineyard with Robert Wolf. Mr. Wolf is the president of UBS Americas. UBS is the Swiss bank at the center of three federal investigations of illegal tax evasion schemes.
From Martha's Vineyard, the Times also reports Obama intends to stand behind George W. Bush's man (and Wall Street favorite), Republican Ben Bernancke, and nominate him for a second four-year term as chairman of the Federal Reserve Bank, the semi-private entity which guides US monetary policy.
Mr. Bernancke is apparently a leading scholar on the Great Depression. That must be convenient. Interesting that he didn't see this one coming.
Granted, stocks are bouncing back nicely, but unemployment is at 9.7%. Wall Street and industry have been well served by the citizens, but they still aren't hiring them.
New York Times reports Citigroup, a bank that got a $45,000,000,000 TARP bailout, intends to pay $130,000,000 to just 2 Citi employees. Citi contends that these two traders are exempt from the TARP compensation rules. Reuters reports that Citi will lose another $44,000,000,000 over the next 18 months. Expect them to plead poverty and demand handouts once again.
Is this an example of the “sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression”? Because...I'm not feeling it.
Obama's tone-deafness here is astonishing. Making economic pronouncements on a golfing vacation with your banker buddies from a jet-setter's playground. Really? What's even more amazing is Obama's disappointing "incrementalism" philosophy and his "stay the course" mentality.
Obama is proving to be a profoundly conservative and unimaginative leader.

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