Obama speech shows Obama's listening only to banking industry insiders
More than two months ago I blogged that Obama, as smart as he is, doesn’t know economics and was listening to the wrong people. Sadly, today’s Obama speech shows he’s still not listening to the many informed, disinterested voices of economic reason (Stiglitz, Krugman, Johnson, et al.).
Unlike JFK during the Cuban Missile Crisis, who insisted on hearing all viewpoints, Obama is listening only to banking industry insiders. He’s not hearing from former IMF and World Bank chief economists and Nobel Prize-winning economists who have been shouting in unison that the Geithner/Summers open-ended subsidies approach is terrible.
Henry Blodget is not a great economist, but Blodget does a good job breaking down the major flaws in Obama’s speech. His conclusion:
I wish Obama didn’t spend so much time hanging out with Tim Geithner and Larry Summers, who I assume are responsible for the mistakes Obama continues to make in his diagnosis and treatment of the banking problem…
I’m glad I voted for Obama, and I’d do it again. But I wish he would spend a few minutes listening to Paul Krugman, Joe Stiglitz, or any of the dozens of other folks who have a better handle on the problem.
There’s another possible explanation for Obama’s apparent ignorance of the Krugman-Stiglitz-Johnson view, suggested in a comment on Blodget’s post:
I agree that President Obama is highly intelligent so I don’t buy the idea that he is being misled by Geithner and Summers or that he is somewhat naive about all this finance stuff. He KNOWS that his policy will save the rich at the expense of everyone else and that it will be more expensive in the long run and keep the economy weak. He KNOWS this and he is stubbornly going through with it anyway, looking every bit as close-minded on THIS issue as Dubya was on so many others. So, the question is why? And the answer isn’t pretty.
Posted by James on Tuesday, April 14, 2009