Frontline's " Money, Power & Wall Street " Episodes 3 &4 aired on PBS affiliates nationwide last night. Episode 3 covered the federal government's response to the economic meltdown during the waning days of the Bush administration and the first ten months of the Obama administration. Most striking was the coverage of the relationship between Timothy Geithner and and President Obama--two peas in a pod it turns out. The ironic takeaway: Geithner played to Obama's weak side--his cautiousness--by advocating the strength of the steady course. In so doing, Obama forever relinquished his potential air traffic controller strike moment in refusing to oust a bank CEO and put a bank on a short leash as a way of demonstrating that he was serious about reform.
Geithner won the day over competing voices within the administration by correctly assessing Obama's aversion to downside risk. Yet it is likely that if--of all people--the president's chief economic advisor Larry Summers had won the day and we had kicked a little bank ass, banks would be compliantly lending today. Instead, as Texas Republican Representative Jeb Hensarling so aptly put it, the response to the last economic crisis planted the seeds of the next, as we now only have Too Big To Fail on steroids as well as banks that have not separated house trading from client relations, fueling the inherent conflict of interest that has spread like mold since the repeal of the Glass-Steagall Act.
Read the entire post, an Editor's Pick, at: