I too do NOT want Obama to succeed – on financial plans

Why?

First, his ever-growing penchant for wanting to hire Goldman Sachs alums, the disciplines and pupils of Bob Rubin and/or Larry Summers, the two anti-wunderkinder (almost typed wunderkiner!) of Sachs who helped get the country into this financial mess in the first place, through taking over two previous presidential administrations

Second, that these hires, and the presidential boss who took so much campaign money, refuse to face the reality that we’re like Russia or Argentina a decade ago; the only reason the IMF hasn’t already come knocking at our door is because the dollar is the world’s reserve currency.

This is also why I don’t agree with everything Krugman says; while he rightly and thoroughly critiques Geithner, on broader U.S.-vs-world economic issues, he’s still too much of an American exceptionalist, in my opinion.

Desmond Lachman, previously a deputy director at the IMF, does indirectly tackle that, or so I interpret him:

Yet how often do U.S. leaders respond to growing signs of economic dysfunctionality by spouting nationalistic rhetoric that echoes the speeches of Latin American demagogues like Peru's Alan Garcia in the 1980s and Argentina's Carlos Menem in the 1990s?

While Krugman isn’t that bad, nonetheless, his attitude seems to be that Europe just “doesn’t get it” with its different approach to the current situation, and therefore must be wrong.

Anyway, back to the main picture. Lachman says that the Goldmanistas, despite their Harvard Biz School pedigrees, seem about as clueless as their Argentine or Russian counterparts. Of course, Argentina’s finance minister at the time had a Harvard degree, and Harvardistas like Jeffrey Sachs, who is all of a sudden pretending to get religion, actually gave Russia the road map for driving itself off the cliff.

Simon Johnson has an even an even more in-depth piece at The Atlantic, both about how the U.S. is a potential IMF basket case, and about how, per Paul Kennedy in “The Rise and Fall of the Great Powers,” financialism has somehow become an “industry,” and one of the biggest in America at that.
His take on American economic exceptionalism?

Of course, the U.S. is unique. And just as we have the world’s most advanced economy, military, and technology, we also have its most advanced oligarchy.

Indeed. And, it’s aided and abetted by the dollar as global reserve currency, just as British moguls were up to World War I.
But, beyond that, there’s other parallels. Back to Lachman:

A singular characteristic of an emerging market heading for deep trouble is a seemingly suicidal tendency to become overly indebted to foreign creditors. That tendency underlay the spectacular collapse of the Thai, Indonesian and Korean currencies in 1997. It also led Russia to default on its debt in 1998 and plunged Argentina into its economic depression in 2001. Yet we too seem to have little difficulty becoming increasingly indebted to the tune of a few hundred billion dollars a year. To make matters worse, we do so to countries like China, Russia and an assortment of Middle Eastern oil producers -- none of which is particularly well disposed to us.

At the same time, I don’t want people like Desmond Lachman telling us how to react, either. At the end of his article, he makes clear that, were he the IMF person given the chance to knock on the Geithner-Obama door, he would call for the same “austerity measures” that the IMF did with the Argentinas and Russias of the 1990s world.

And, of course that means cutting Social Security and Medicare. Just because the IMF has the right diagnosis doesn’t mean it has the right prescription. Or, at least, some people in the IMF don’t.

Johnson offers up more concern about how Team Geithner, or Team Summers is dealing with the financial bailout issue:

Even leaving aside fairness to taxpayers, the government’s velvet-glove approach with the banks is deeply troubling, for one simple reason: it is inadequate to change the behavior of a financial sector accustomed to doing business on its own terms, at a time when that behavior must change.

Exactly. This has gotten lost over actual public-level anger, and DC Village pseudo-anger, at AIG bonuses. For people who think about the issue, far more than wanting AIG’s bonuses to disappear, we want AIG’s surrounding culture to be wiped out. (And, Geithner’s latest regulatory proposals don’t do that.)

Johnson disagrees strongly otherwise with Lachan. He says the “oligarchy” needs to be broken up. But, contra disappointed but still pony-seeking types like Paul Krugman, Geithner isn’t likely to ever do any of this. More coming in a second post.

Third, as far as the prescription, it seems Geithner has the same medical approach as Lachman, per Tiny Revolution.

Of course, we are all fiscal hawks now because of Pete Peterson. (Laughter.) There are no doves left on the fiscal side.

Really, though, this isn’t new. His boss has already made noises about “reforming” Social Security, tried to get veterans to start paying for their own health care, and has offered a “national health plan” that certainly won’t get us to a national healthcare plan and may leave us worse off in some ways.

So, for entirely opposite reasons than Rush Limbaugh, I want Barack Obama to fail.

I DON’T want a financial bailout plan that keeps bleeding money to plutocrats who already have one hand on the machinery of government.

I DON’T want healthcare reform that isn’t, or entitlements reform that isn’t.

I DON’T want a continued sense of American exceptionalism in our financial policy.

I DON’T want a financial sector bailout that, if anything, has a good chance of increasing the American income gap.

If Geithner is the fox guarding the henhouse, per Glenn Greenwald, what does that make his boss? And if, on average, people become more conservative as they age, is Obama’s RealAge more like 57 not 47?