Sunday, December 13, 2009

Matt Taibbi: Obama's Big Sellout (Or Bait and Switch)

Matt Taibbi is slowly waking up from kool-aid he drank...

Obama's Big Sellout (Matt Taibbi, 12/9/09 Rolling Stones)

"Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers "at the expense of hardworking Americans." Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it's not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing.

"Then he got elected.

"What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.

"How could Obama let this happen? Is he just a rookie in the political big leagues, hoodwinked by Beltway old-timers? Or is the vacillating, ineffectual servant of banking interests we've been seeing on TV this fall who Obama really is?

Taibbi's naïveté is almost painful to see. He tries his best to forget that Obama was a strong supporter of the $700 billion bank bailout bill of 2008. He doesn't mention that Wall Street bankers, including those at Vampire Squid (aka Goldman Sachs), were big campaign contributors for Obama. He even calls Candidate Obama a "genuine outsider". Obama was a first-term U.S. Senator when he was nominated as the Democratic candidate. Before that, he was an Illinois state senator. I wouldn't call him a "genuine outsider". Obama has been immersed in left liberal politics all his adult life, from community organizing level all the way to the presidency. Taibbi fails to mention also that this "outsider" is a multi-millionaire for having written, supposedly, an autobiographical memoir before the age of 34. That's one "man of the people". What kind of people Taibbi is talking about, I haven't a clue.

The article continues:

"Whatever the president's real motives are, the extensive series of loophole-rich financial "reforms" that the Democrats are currently pushing may ultimately do more harm than good. In fact, some parts of the new reforms border on insanity, threatening to vastly amplify Wall Street's political power by institutionalizing the taxpayer's role as a welfare provider for the financial-services industry. At one point in the debate, Obama's top economic advisers demanded the power to award future bailouts without even going to Congress for approval — and without providing taxpayers a single dime in equity on the deals.

"How did we get here? It started just moments after the election — and almost nobody noticed."

Well, I think I can guess what it was without further reading the article. I noticed. Many traders noticed. It's the special bailout of Citigroup, announced on November 23, 2008. The rumor of it must have leaked on November 21 Friday, because that's the day another collapse of the stock market since Obama's election (more than 2000 points slide on Dow Jones Industrial Average in 12 trading days) was finally arrested. Now am I right?

"'Just look at the timeline of the Citigroup deal," says one leading Democratic consultant. "Just look at it. It's fucking amazing. Amazing! And nobody said a thing about it."

"Barack Obama was still just the president-elect when it happened, but the revolting and inexcusable $306 billion bailout that Citigroup received was the first major act of his presidency."

Yup. I was right. It is very telling, isn't it? Equally telling as the first major act of his presidency after the inauguration, which was to bomb Pakistan with killer drones. (And he was awarded Nobel Peace Prize.)

The entire article is about 10 pages long, and available as a convenient printer-friendly version by following the link above.

Welcome, Matt, to the real world. Take your red pill. Better late than never.


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