Charles writes:
>
> CB: Hey, if it were me I'd nationalize them; get control for all that
> money. However, I'm not sure just letting them fail would have
> brought about the result of "fixing" the unemployment rate and ending
> the recession, which is what this author is saying the admin must do
> to be re-elected or win governorships. Even Doug and Krugman opposed
> letting them just fail.
Again, no one was for "just letting them fail", excepting conservatives who believe in the spontaneous self-correcting power of the market. The issue on the left and even beyond was whether to prop up failing banks, insurers, and auto companies in the interests of investors at taxpayer expense, or to wind these down while a) cushioning the effects of joblessness through improved severance, unemployment, and retraining benefits and b) offsetting the job losses in these sectors by a massive program of public investment in infrastructure, social services, and alternative energy and other promising new industries. The administration opted to keep the zombie banks and corporations afloat and to heavily subsidize the entire financial industry, much to the dismay of it's supporters.
> CB: As I say, if I ran the world... As to why Obama considered that
> he had to cave to the ruling sector of the ruling class, and couldn't
> take advantage of the seeming mass support for being more takeoverish,
> I don't know. Maybe O is just gungho for capitalism, like his
> detractors here say. I suspect it's more like he's under, what can I
> call it , control by threat of "we'll get you if you do something like
> that" from people who can and will definitely get you if they say it.
> Also, in all of this , Congress is more powerful than the Pres. The
> Pres doesn't control the Congress, especially a new one. Kennedy
> couldn't get hardly anything through Congress. It took LBJ who had
> been Senate majority leader. Look how the right Dems are the key to
> preventing a good health care law.
This overlooks that the bankers, conservative Democrats and Republicans were not as emboldened in January as they are today. They were anxious and on the defensive. Politics can be understood primarily in terms of the balance of forces and other objective constraints, but there are moments when bold leadership can affect these, and Obama's election seemed to present such an opportunity. His choice of key advisors, particularly Summers and Emanuel, was an early indication that he was not going to use the momentum coming out of the campaign nor his office as a bully pulpit to rally and broaden his base as a prelude to significant reform. It was an indication that he would, like his predecessors, take his base for granted while pursuing a more cautious course designed to attract these forces to his right in order to secure a second term. He bears the responsibility for the choices he made, and at this stage they do not look to be good ones, both in relation to the public interest and the narrower partisan interests of the Democratic party.