Sunday, April 05, 2009

Obama's Lessons from Enron?

You simply must read Glenn Greenwald's take on Obama's economic shenanigans and the steps he's taking to subvert the necessary regulations and oversight that could save this economy by restoring faith in the system. Make sure you also read the articles he links to for background and watch Bill Moyer's interview with William Black. (The very last sentence is priceless.)

My favorite is this quote from a WaPo article:

The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials. . . .

The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials. . . .

In one program, designed to restart small-business lending, President Obama's officials are planning to set up a middleman called a special-purpose vehicle -- a term made notorious during the Enron scandal -- or another type of entity to evade the congressional mandates, sources familiar with the matter said.

That's right. Obama is using the same fraudulent practices that tanked Enron and saw its leaders convicted of criminal activity. Who could have known that Obama would be unwilling or unable to do what it takes to save our country from the largest economic disaster since the Great Depression? Wait, I remember. You read it here in November:

I assure you that his policies are the exact opposite of what needs to be done right now and what is being done by state and local governments around the country. The decisions are hard, but they have to be made if we're going to stabilize our economy. Obama refuses to either see or admit that.

At best, Obama's shenanigans will be pushing the can down the road a bit, hoping another bubble will improve the economy enough to make it look like his policies worked. Ultimately, however, his failures now will lead to even bigger disasters down the road, mimicking the same boom/bust cycle that led to the Great Depression not the investigations, regulations and public investment that stabilized our economy, shortened recessions and prevented depressions until they were gutted during the last four presidencies.


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