I, for one, feel betrayed by Obama. And I'm certainly not alone.
While he didn't really make many actual "promises" on the campaign trail (which should have been a red flag), he has backtracked from many of the things he did talk about: ending military tribunals, transparency (ha! as if!), protecting the Bush administration thugs, gay marriage, executive privilege, keeping many of the Wall Street banksters who were responsible for this economic mess, single-payer health care (he was for it as a Senator), the list is getting long.
I tell ya, the next time a candidate comes out of nowhere and is a smooth talker, just watch the hell out. We should have gone with a known quantity, with a decent track record, a la Hillary Clinton. I got sucked in by Obama's rhetoric like most. And that's about all it was. Rhetoric. Any Democrat could have beaten the Republican this time around what with all the crap that Bush dealt out. Obama saw his opportunity and went for it. And we all fell for it.
Nomi Prins gives the most thorough analysis of Obama's big Rx for economic regulation that I've seen so far, and it's lacking, in many respects. But I'm not really surprised. Disillusioned, yes. Surprised, no. Change we can believe in? Ha. What a bad joke.
Obamanomics: The Good, the Bad, the Weak
On bank regulation, the White House goes too far, and not far enough.
—By Nomi Prins
a few snips
Obama, alas, is no FDR. Roosevelt's New Deal reforms included the Glass-Steagall Act of 1933, which split complex financial institutions into commercial banks (for consumers) and investment banks (for speculators).
The administration's new 88-page white paper, titled "Financial Regulatory Reform: A New Foundation," focuses more on alterations than true reform.
Obama blames the financial crisis on a "culture of irresponsibility," but the absolute worst of his new proposals is to give the Fed more authority. That's like rewarding the king of this irresponsible culture, or at least its chief banker and liquidity provider, with a larger kingdom.
The biggest bank bailouts of all went to Citigroup, which grabbed $388 billion in public assistance, and Bank of America, which scored $220 billion—as much as AIG. And who was their regulator? The Fed.
Yet under Obama's plan, the Fed would be crowned as the supreme systemic-risk regulator, supervising the largest and most interconnected firms. This is plain wrong. It rewards an entity that neglected its regulatory obligations to begin with, that paid unprecedented sums to correct its mistakes, that never exercised its ability to contain the size of banks—blessing rather than questioning those that would become "too big to fail" (or to regulate)—and that shunned transparency. This is not the way to stabilize and provide necessary responsibility to the system.
Rather than regulate a complicated industry by creating more regulatory layers and giving more power to the Fed—which deserves its own stringent audit—a more lasting solution would be to restructure the banking industry itself. The smart move would be to divide banks once again into separate consumer and investment entities. This would make them far easier to regulate, and alleviate the need for government to play catch-up—and subsidize ever larger, more complex firms.
Yet as long as the Gramm-Leach-Bliley Act of 1999 (which repealed Glass-Steagall, and then some) remains intact, and as long as the Fed serves as marriage counselor and financier for the banks, then investment houses, commercial banks, S&Ls, and insurers can and will continue to merge operations. That fact alone renders it extremely difficult to monitor and control our banking system, or to achieve the stability Obama promises—and the rest of us seek.
You can read the whole article here. I'm washing my hands of this guy. If his Presidency turns out to be a raging success, I'll be surprised.
Nomi Prins, who knows a few things about Wall Street, has a website that can be found here.