February 17, 2009
I have the impression that many of us believe President Obama has the makings to be a great leader and that with him real change is possible. I recently read that greatness must be cultivated, that a leader isn't great through their own volition but because the people call it forth.
Naturally the individual needs to already possess the makings to be great. And like many of us I voted for President Obama because I believe he does. But I also know given the nature of our political and legislative environment that it will be extremely difficult for him to successfully break through the stranglehold America's corporate elite have over Washington. Thus greatness could elude him and us.
While in the mist of this financial crisis our first major test is now at hand, how will he, and we, step up to the challenge?
Our current opportunity comes through an interview that Bill Moyers had on "PBS" the "Journal" on Friday February 13, with Simon Johnson, a former chief economist of the International Monetary Fund (IMF), MIT Sloan School of Management professor and senior fellow at the Peterson Institute for International Economics. I strongly recommend reading the full transcript of the interview and have provided the link below.
Simon Johnson raises the trillion dollar question: Can Obama and the Treasury team he has assembled, led by Treasury Secretary Geithner the former President of the Federal Reserve Bank of New York, "really break with the vested elite that got [us] into this much trouble?"
Simon points out that the people who shape policy and in this particular case within the Treasury are "...powerful people [who] are the insiders...they're the CEOs of ...banks...they are the people who could pull the strings...who have the influence...who call the shots."
The Obama Treasury, which is not unique in this respect, is made up of various banker insiders. "Geithner hired as his chief-of-staff, the lobbyist from Goldman Sachs. The new deputy secretary of state was, until last year, a CEO of Citigroup. Another CFO from Citigroup is an assistant to the President and deputy national security adviser for International Economic Affairs. And one of his deputies also came from Citigroup. One new member of the president's Economic Recovery Advisory Board comes from UBS, which is being investigated for helping rich clients evade taxes." These appointments were made by exempting these individuals from an Obama ruling that lobbyist would not be hired into his administration.
The tendency for Obama caving in, thus falling short of his potential greatness, is very real when the same nucleus of powerful people who created the financial mess in the first place still has control and influence over policy. Surely he knows, as we do, that this powerful nucleus must be broken up. But can or will he when surrounded by them? "When there's a small group of people who got you into a disaster, and who [are]still powerful [where the]disaster even made them more powerful....and you know you need to come in and break that power [up] ...and you can't....you're stuck" as explained by Simon Johnson.
Having already blinked by exempting appointments from his own ruling, has Obama blinked again?
Mr. Moyers points out that earlier last week both the "Wall Street Journal" and the "New York Times" reported that "Obama's top two political aides, Rahm Emanuel and David Axelrod, have pushed for tougher action against the banks. But they didn't prevail. Obama apparently sided with Geithner and the Treasury Department in using a velvet glove." Many observers outside the circle of influence, such as members of the IMF, feel to coddle the bankers is a grave mistake. The consensus being that the banks should be held to account and must come clean with their true financial conditions.
This powerful group of insiders can and do have the same sway and stranglehold over Congressional leaders as is evidence in recent actions and in recent hearings before Senate committees:
Simon Johnson: "I think the view that a lot of people have in Washington...is that [they] need to rely on the technocrats ...and the technocrats are saying, "This is the way to go, and you mustn't be too tough on banks, because that will have adverse consequences for credits, and for the economy, and for unemployment. Those technocrats, if that's what they're saying, are wrong. That is not the right way to deal with this crisis."
It all depends on what we the electorate do and politically how this plays out but currently as things are unfolding nothing will change and the American public is being played as the chumps the bankers think we are, as revealed in the following exchange between Moyers and Johnson:
Bill Moyers: "Do you think that Obama understands how these guys play the game? Let me play you the recording of a conference call "Huffington Post" released this week. One of the top officials of Morgan Stanley [James Gorman] is speaking to his colleagues. Here it is":
James Gorman: "I'm going to turn to a topic that I suspect is near and dear to everybody's hearts, which is retention. There will be a retention award. Please do not call it a bonus, it is not a bonus it is an award. The award will be based on '08 full year production. Clearly it would have been cheaper to do it off '09 but we think it's the right thing to do and we've made that decision."