This economic crisis is too useful for Obama to want it to end. When Rahm Emanuel -- and later Hillary Clinton -- spoke of never letting a good crisis go to waste many people were shocked. But now Obama seems to embody the corollary: that the crisis should continue until he has thoroughly milked it to reshape American politics society and the economy. Like Faust he seems to wish that this given moment will endure forever. Unlike Faust however he will not lose his life and soul to such a wish. Hell sacrifice ours instead.
First came the stimulus package. With only about $185 billion of its $800 billion in spending to be spent in 2009 Obama clearly never intended the spending to be about stimulus but wanted the need for a stimulus to trigger the spending he wanted anyway.
Then came the Troubled Asset Relief Program (TARP) funding often forced down banks throats. Now comes word that even as banks want to return the money the Treasury is making them keep it. One source at a TARP bank reports that Treasury Secretary Timothy Geithner is insisting that banks go through their stress test before refunding the TARP money. As Stuart Varney speculates in The Wall Street Journal Obama wants the banks to keep the money so he can enforce his regulations on them.
Now comes Geithners plea for extra regulatory powers and Obamas concession to global economic regulation at the G-20 summit. Both moves are game-changers for any major American business. Geithner wants the power to take over any business -- presumably in any field -- whose failure would imperil the national economy. Today its banks brokerage houses car companies and insurance firms. Tomorrow? Who knows?
And Obama agreed to agree on international high standards for the regulation of all systemically important companies to be promulgated by the new global Financial Stability Board (FSB). The United States occupying one of 20 chairs on the FSB board (21 if we count the EU) will come to a consensus with other central bankers from the G-20 nations on what these regulations should say. Then the Securities and Exchange Commission the Federal Reserve and the other regulatory arms of the U.S. government will impose them on our economy.
(Some have objected that Congress needs to be consulted but as long as the agreements are voluntary and the U.S. agencies are merely asked to impose the regulations no further grant of congressional authority is needed. But of course there will be nothing voluntary about the administrations demand that the agencies implement the coming FSB directives no matter how intrusive they may be.)
And finally there is Obamas delegation of a total overhaul of the tax code to a commission headed by Paul Volcker with a mandate to report back in December of this year.
So with the tax code totally changing Europe about to formulate regulations for our economy the U.S. government empowered to take over any large company the deficit and spending reaching unbelievable levels and the feds insisting on continued control of banks what businessman in his right mind is going to invest in anything? How could even the most foolish optimist pull the trigger on a business investment without knowing the tax consequences the regulatory framework and the policy of the banks on lending?
But Obama knows all this. He knows that his steps will delay economic recovery. But he wants these changes not as means to an end but as the end itself. And he is determined to get them passed and set in stone while the rubric of crisis justifies his doing so.
He is not unlike a leader who takes his country into war knowing that by wagging the dog he can reinforce his power.
But ultimately does Obama care if he is reelected? Doesnt he know that he needs a good economy to extend his mandate to eight years? Yes of course he does. But he probably figures that he can turn the economy around as Election Day 2012 draws nearer and reap all the credit then. In the meantime no good crisis should ever go to waste.
This economic crisis is too useful for Obama to want it to end. When Rahm Emanuel -- and later Hillary Clinton -- spoke of never letting a good crisis go to waste many people were shocked. But now Obama seems to embody the corollary: that the crisis should continue until he has thoroughly milked it to reshape American politics society and the economy. Like Faust he seems to wish that this given moment will endure forever. Unlike Faust however he will not lose his life and soul to such a wish. Hell sacrifice ours instead.
First came the stimulus package. With only about $185 billion of its $800 billion in spending to be spent in 2009 Obama clearly never intended the spending to be about stimulus but wanted the need for a stimulus to trigger the spending he wanted anyway.
Then came the Troubled Asset Relief Program (TARP) funding often forced down banks throats. Now comes word that even as banks want to return the money the Treasury is making them keep it. One source at a TARP bank reports that Treasury Secretary Timothy Geithner is insisting that banks go through their stress test before refunding the TARP money. As Stuart Varney speculates in The Wall Street Journal Obama wants the banks to keep the money so he can enforce his regulations on them.
Now comes Geithners plea for extra regulatory powers and Obamas concession to global economic regulation at the G-20 summit. Both moves are game-changers for any major American business. Geithner wants the power to take over any business -- presumably in any field -- whose failure would imperil the national economy. Today its banks brokerage houses car companies and insurance firms. Tomorrow? Who knows?
And Obama agreed to agree on international high standards for the regulation of all systemically important companies to be promulgated by the new global Financial Stability Board (FSB). The United States occupying one of 20 chairs on the FSB board (21 if we count the EU) will come to a consensus with other central bankers from the G-20 nations on what these regulations should say. Then the Securities and Exchange Commission the Federal Reserve and the other regulatory arms of the U.S. government will impose them on our economy.
(Some have objected that Congress needs to be consulted but as long as the agreements are voluntary and the U.S. agencies are merely asked to impose the regulations no further grant of congressional authority is needed. But of course there will be nothing voluntary about the administrations demand that the agencies implement the coming FSB directives no matter how intrusive they may be.)
And finally there is Obamas delegation of a total overhaul of the tax code to a commission headed by Paul Volcker with a mandate to report back in December of this year.
So with the tax code totally changing Europe about to formulate regulations for our economy the U.S. government empowered to take over any large company the deficit and spending reaching unbelievable levels and the feds insisting on continued control of banks what businessman in his right mind is going to invest in anything? How could even the most foolish optimist pull the trigger on a business investment without knowing the tax consequences the regulatory framework and the policy of the banks on lending?
But Obama knows all this. He knows that his steps will delay economic recovery. But he wants these changes not as means to an end but as the end itself. And he is determined to get them passed and set in stone while the rubric of crisis justifies his doing so.
He is not unlike a leader who takes his country into war knowing that by wagging the dog he can reinforce his power.
But ultimately does Obama care if he is reelected? Doesnt he know that he needs a good economy to extend his mandate to eight years? Yes of course he does. But he probably figures that he can turn the economy around as Election Day 2012 draws nearer and reap all the credit then. In the meantime no good crisis should ever go to waste.
