The administration’s game plan has been to blame Bush for the country’s troubles. That has gotten long in the tooth. So now it’s the banks that are the demons for the problems created “over the past two years.” Bloomberg quotes the President’s tiresome remarks:

Over the past two years, more than seven million Americans have lost their jobs in the deepest recession our country has known in generations. Rarely does a day go by that I don’t hear from folks who are hurting. And every day, we are working to put our economy back on track and put America back to work. But even as we dig our way out of this deep hole, it’s important that we not lose sight of what led us into this mess in the first place.

This economic crisis began as a financial crisis, when banks and financial institutions took huge, reckless risks in pursuit of quick profits and massive bonuses. When the dust settled, and this binge of irresponsibility was over, several of the world’s oldest and largest financial institutions had collapsed, or were on the verge of doing so. Markets plummeted, credit dried up, and jobs were vanishing by the hundreds of thousands each month. We were on the precipice of a second Great Depression.

To avoid this calamity, the American people — who were already struggling in their own right — were forced to rescue financial firms facing crises largely of their own creation. And that rescue, undertaken by the previous administration, was deeply offensive but it was a necessary thing to do, and it succeeded in stabilizing the financial system and helping to avert that depression.

Since that time, over the past year, my administration has recovered most of what the federal government provided to banks. And last week, I proposed a fee to be paid by the largest financial firms in order to recover every last dime.

So with Scott Brown to be seated, and the apparent death of the healthcare monstrosity, the administration trots out another populist theme to change the subject, find a new enemy to blame for the nation’s woes and (perhaps) fire up the base and mobilize the masses. How do we know this? Two reasons: (a) there is no reason for Obama to make the remarks at all, unless he was trying to score political points; and (b) Democrats (even Geithner?) agree among themselves that Obama’s idea about a special bank tax and certain other punitive measures are dumb and/or non-starters:

Barney Frank:

“I will be supportive of this with a time frame of no less than 3 or 5 years before it gets done,” said House Financial Services Committee Chairman Barney Frank, D-Mass., on CNBC TV. “To have all these sales at the same time would be a fire sale and I can’t support that.”

Cramer:

“Everyone on Wall Street knows how bogus this is,” he said. Cramer said he wished Goldman Sachs would have posted a loss or burned all the money in a furnace because “then we wouldn’t have this tax.”

More Cramer: What did Goldman Sachs do to deserve this? That’s all I can think of in the second day of President Obama’s nuclear strike against firms that invest in anything other than plain-vanilla loans. If you parse the words of Obama’s statement Thursday you come out with three thrusts: Smaller banks will keep us out of trouble and will not be needed to be bailed out and what causes a bank to need bailing is private-equity and hedge fund investing. In other words, Goldman Sachs could cause a bailout because it does the most hedge fund investing and private equity of any of the publicly traded firms. No wonder Obama picked the same day as Goldman Sachs’ conference call — he was talking about Goldman. I wish he had been on the call. “Congratulations guys, on a good quarter, let this be the last one because you made so much money,” he might have said. At least everyone wouldn’t have had to be punished for Goldman’s sin of making too much money.

Warren Buffett:

“If it’s some kind of a guilt tax or something of that sort because banks were among the whole United States that were saved back in 2008, everybody was taken care of then. And the banks, basically, somebody like Wells, it’s cost them a lot of money to be in the TARP and it was basically forced upon them. (They) didn’t want to take the money, but really had no choice. So that’s cost Wells a lot of money. The government’s made a lot of money off Wells. They’ve made a lot of money off Goldman. They’ve made a lot of money off J.P. Morgan. And where they’re going to lose money, at least where its possible they’ll lose money, is in the auto companies.

So if you’re going after the people you saved, you might say GM shareholders didn’t get saved, the GM bondholders didn’t get saved. What happened there is they kept employment. I’m the last guy to suggest that you should go and put a special tax on autoworkers. (Laughs.) If you’re really looking for the people who benefited from government losses, you’d have to look there. Or if you look at Fannie or Freddie. Are you going to go and tax the members of Congress who ran Freddie and Fannie…

The American people love the idea of Goldman or AIG or anybody like that, those are bad names. They don’t think so much about Freddie or Fannie which are that expensive and which Congress ran. But I just think a tax that’s enacted with the idea that the headlines will be appealing and that a certain amount of vengeance will be achieved, I don’t think that’s the greatest form of tax policy.”

We’re reminded of the Isiah Berlin fox/hedgehog distinction, noted by a professor at UC Berkeley: “Hedgehogs are big-idea thinkers in love with grand theories: libertarianism, Marxism, environmentalism, etc. Their self-confidence can be infectious. They know how to stoke momentum in an argument by multiplying reasons why they are right and others are wrong. That wins them media acclaim. But they don’t know when to slam the mental brakes by making concessions to other points of view. They take their theories too seriously.” President Obama is part of that portion of the US that has had little or no contact with the private sector during their lives, the business world where most of life takes place. He is anti-business and he knows almost nothing about business. In a sense he lives in an alternate reality. Not good news for the rest of us.

This entry was posted on Saturday, January 23rd, 2010 at 4:52 am and is filed under business, Democrats, General, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.