Obama: Too little economics knowledge to hire the right people?
I think Jeffrey Klein nails it:
The fundamental problem seems to be that our new president is a lawyer lightly versed in economics. His understanding of our financial crisis is not in the same league with his many other gifts. To help himself out, he’s hired the very people who created the crisis. Their impulse is to create ever more complex financial fixes. And to police these fixes and their shifting capital requirements, they’ve hired in from the private sector (from PriceWaterhouseCoopers, Ernst & Young) the same auditors trained to look the other way…
Like Bush, his first instinct has been to protect the status quo. He wants to save the banks. Why? If there is profit to be made, new banks will spring up in their stead. There is no sound reason — nothing the experts know that you don’t — to transfer private debt into public debt, where it will eventually result in decreased services, increased taxes and crippling inflation.
Is Obama rationalizing that his efforts are stabilizing? Citizens are already de-stabilized by Obama’s perpetuation of Bush’s ruling class rules: heads they win, tails you lose. Common sense and fair play dictate that financial shortfalls must wipe out bank equity and bond holders before anyone else. This should be non-negotiable. Why is Obama stooping to negotiate?
Why didn’t Obama hire the Joe Stiglitzes and Paul Krugmans of the world? They’ve got brilliant minds and Nobel Prizes to prove it. And they’re far more objective (and less compromised) than those who helped create the mess, whom Obama hired.
Posted by James on Monday, February 09, 2009