Why bail out Wall St. again?


Copy Editor

Why are we so tough when it comes to bailing out the auto industry, when we hand billions over to Wall Street with no strings attached? Why is it that auto workers are forced break contracts and make brutal wages and pension concessions while Wall Street executives from failed corporations are allowed to siphon off multi-million dollar bonuses in bailout money? Ostensibly because the U.S. government doesn’t have a right to break their contracts?

We need to look and see who is making these decisions. It is of grave concern to me, and I am sure a lot of people, whether Obama is getting and listening to the right advice. I wish he would listen to a wider range of opinions. Paul Krugman, Nobel prize winning economist and New York Times columnist mentioned in one column that he never met Obama and no one in the administration had contacted him (I think that’s an accurate representation of what he said) in spite of the fact that Obama said publicly, something like,” If Krugman has a better idea we will do it.” And many commenters have expressed concern that Summers (Obama’s top economic advisor) and Geithner (Treasury Secretary) are part of the same Wall Street establishment that got us into this mess, and are invested in promoting policy that supports them. That they might therefore might not be, if not honest brokers, then at least, unbiased in the advise they are giving to Obama.

E.J. Dionne of the Washington Post had this to say in his article entitled “The Nobelists v. Obama and Geithner.”

Critics of the administration plan (notably Stiglitz) [Joseph Stiglitz is another Nobel prize winning economist who is also a critic of the administration’s economic policy paticularily on the public/private bailout] believe it involves government subsidies for private investors that are much too large and will leave taxpayers far too exposed. And there is a difference in sensibility: Geithner simply has more trust in the working of the financial system than does Krugman, who recently criticized the administration as being “in the grip of the market mystique” and as overrating “the prowess of the wizards” who perform the market’s “magic.”

That’s the Obama enigma: boldness wrapped in caution rooted in an ambivalent relationship to the status quo. This is why Obama will, by turns, challenge not only his entrenched adversaries but also his natural allies.

And then there’s this: Documents show Geithner’s failures to foresee financial crisis at New York Fed. Have a look!

Let’s hope that Obama ends up listening to the RIGHT advice.