Monday, February 9, 2009

Geithner-Obama = Paulson-Bush

"Geithner Said to Have Prevailed on the Bailout" (NYT):

Abandoning any pretense about limiting the moral hazards at companies that made foolhardy investments, the plan also will not require shareholders of companies receiving significant assistance to lose most or all of their investment.

Nor will the government announce any plans to replace the management of virtually any of the troubled institutions, despite arguments by some to oust current management at the most troubled banks.

And for all of its boldness, the plan largely repeats the Bush administration’s approach of deferring to many of the same companies and executives who had peddled risky loans and investments at the heart of the crisis and failed to foresee many of the problems plaguing the markets.

What boldness?

On Jan. 25, this blog urged Pres. Obama to "think Kirk" in a post titled:  On Economy, not Obama's Style to Boldly Go Where No Man Has Gone Before".  This looks like a disaster, both financially and very possibly politically.  The real Barack Obama is coming into view.  He is looking like a conventional thinker on the greatest issue of our day.  Dr. Ken Rogoff, former chief economist for the IMF and the recent co-author of a major study of past banking/economic crises, was on the BBC recently  and already expressed disappointment that Mr. Obama did not propose decisive action on this problem in his inauguration address, which would have channeled FDR.  Dr. Rogoff was especially critical that there was no coherent plan presented within a week of attaining the presidency.

On the financial crisis, Barack Obama is looking like Bush III.

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