President Obama: Wall Street Bankers are terrorists holding us hostage

Everybody agrees on the paramount importance of freeing up credit for individuals and businesses. In a bank-centric universe, the solution was a bailout plan giving hundreds of billions to banks. It failed because, instead of using the money to make loans, the banks "are keeping it in the bank because their balance sheets had gotten so bad," as the president himself acknowledged on Jay Leno. As a result, the administration, again according to the president, had to "set up a securitized market for student loans and auto loans outside of the banking system" in order to "get credit flowing again."

But think of all the time we wasted while the first scheme predictably failed. And how much better off we'd now be if we had provided credit directly through credit unions or small healthy community banks or, as happened during the Depression, through a new entity like the Reconstruction Finance Corporation.

Luckily, there is a plethora of economic Galileos out there who recognize that the old bank-centric cosmology is just plain wrong. But while Joseph Stiglitz, Simon Johnson, Jeffrey Sachs, Nassim Taleb, Niall Ferguson, Paul Krugman, etc. are not being imprisoned for life for their heretical views -- they are also not being listened to. Which is really surprising for an administration that has prided itself on a "team of rivals" approach.

Worse, as the fundamental flaw in the administration's cosmology becomes more and more evident, the economic team around the president is closing ranks. Even David Axelrod, once the administration's champion of a more skeptical view of a bank-centric universe, appears to be peering through the Geithner-Summers telescope.

Back in February, he crossed swords with Geithner, arguing for executive pay caps. But there he was on Sunday, whiffing on a pro-populist softball offered up by Fox News' Chris Wallace, who asked: "When taxpayers are putting up most of the money and taking more of the risk, why would the Obama administration allow some of these executives to get even richer?"

Axelrod's answer? "On some of these programs, we're asking financial companies to come in and help solve this problem by providing more lending, by buying up toxic assets and so on. We don't want to create disincentives and undermine the program."

"Asking" them? Aren't we, in fact, bribing them with massive capital infusions and loan guarantees? That's what being surrounded by a group of modern day Ptolemys will do to a person.

Of course, it's less of a surprise that Geithner and Summers believe in bank-centrism -- they're both creatures of it. Which is why it wasn't a shock when it was reported this weekend that Summers had received $5.2 million for advising a hedge fund last year, or that he received hundreds of thousands of dollars in speaking fees from some of the very banks -- including J.P. Morgan, Citigroup, and Goldman Sachs -- that have been on the receiving end of billions in taxpayers money. Billions that have come with very few strings attached -- and almost no transparency.

I am in no way suggesting there is anything corrupt about this or any quid pro quo involved. It's just that in a bank-centric universe, funneling no-strings-attached money to too-big-to-fail banks is the logical thing to do.

So is arguing that the banking crisis is just a liquidity problem rather than an insolvency one, as Geithner continues to do (and if the stress tests come back declaring Citi solvent, it will be high time to start stress testing the stress testers).

President Obama needs to open his inner economic circle to those untethered to this flawed way of thinking and acknowledge that navigating our economic crisis using maps based on a cosmology that places banks at the center of the universe can only lead to our being lost at sea for years to come.
http://www.huffingtonpost.com/arianna-huffington/the-obama-economic-teams_b_1...

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[combovergi]

hes a wall street puppet bought and paid for,are you that blind in the states

[oldhacks]

the bankers payed for Obamas campaign. pay to play politics. thats representative government..

[NewWorldOrderElite]

In Soviet Russia you rob bank, in Capitalist America bank robs you!

[genesistwoeighteen]

The only way to avoid this mess is to use gold and silver as currency. When the banks create money and have a monopoly on the money they will always use their greed to buy up a nation and its politicians. the peole get what they want with fake money but they pay for it at a certain point when the bankers want to control everything.

[genesistwoeighteen]

Obama, "We got to figure out how to raise their capital." Huh? They create the money they lend out in the first place! That is how money is put into our money supply. They can loan out ten times more then they have in reserves. They make money so I dont understand what Obama is trying to say. They dont need to raise capital.

[genesistwoeighteen]

It sounds to me like Obama is sounding like he is against the bankers but still gave them trillion of taxpayers Childrens money. He says they paid back a lot of it. The bankers are laughing at us

[genesistwoeighteen]

The appointment of a Secretary of the Treasury is just that, an appointment to a position which is NOT a cabinet position in any administration. The S.o.T. is the [governor] appointed to the World Bank, International Monetary Fund (IMF). He is not an officer of the United States, is not a cabinet member and does not represent the interests of the United States. His position is as liaison between the federal government and the IMF. His obligation is to the IMF, not to the United States

[FuckThatShitBitch100]

@tchen10 im not so sure about that

[1XMarksSpot]

Obama is bought and paid for by Wall Street from the beginning.

He's all talk and no walk.

[SadegoGG]

@adm1ackbar

Wall Street invests money so that businesses can grow and develop and people can earn a living. There is absolutely no better use for money than investment once you have purchased your absolute necessities for long term economic growth. What would be a better use of trillions of dollars than through investment and building long term economic growth? Should we keep the economy where it is and never make it better or never expand it?

[adm1ackbar]

those are pretty bold words from a president who gave trillions of dollars to wall street and is friendly and in bed with wall street and appoints wall street insiders to posts in his sickeningly corrupt government....

F.uKC OBAMA and THE FEDERAL GOVERNMENT, they are all corrupt and purposely destroying our country, all politicians are scum, they are all raping our liberty, it's sad that there will never be any chance of voting honest and responsible people into dc...

[genesistwoeighteen]

The beast(fallen government) shall hate the whore(central banks who have bought most commerce and run the NWO) strip her naked(unconver her deeds) eat her flesh and burn her with fire. Rev. 17-18