Ed Harrison has interesting observation on Taibbi's article "Obama's Big Sellout"

[KoKo]

Matt Taibbi: Obama’s Big Sellout

By Edward Harrison of Credit Writedowns

Matt Taibbi is one of the few commentators in the mainstream media who is not worried about ‘access’ and has, therefore, been free to write much more critically about the economic crisis and reform efforts on Wall Street.

His first piece was a polemic against Goldman Sachs, which triggered a backlash against the venerated Wall Street firm due to its incestuous relationship with Washington. Afterwards, he took on health care reform. Now, he is taking on the Obama Administration and its status quo bias. I have an excerpt below and a link to the full article. But, first, let me say a few words.

As you probably know, I have been quite disappointed with this Administration’s leadership on financial reform. While I think they ‘get it,’ it is plain they lack either the courage or conviction to put forward a set of ideas that gets at the heart of what caused this crisis.

It was clear to many by this time last year that the President may not have been serious about reform when he picked Tim Geithner and Larry Summers as the leaders of his economic team. As smart and qualified as these two are, they are rightfully seen as allied with Wall Street and the anti-regulatory movement.

At a minimum, the picks of Geithner and Summers were a signal to Wall Street that the Obama Administration would be friendly to their interests. It is sort of like Ronald Reagan going to Philadelphia, Mississippi as a first stop in the 1980 election campaign to let southerners know that he was friendly to their interests.

I reserved judgment because one has to judge based on actions. But last November I did ask Is Obama really “Change we can believe in?” because his Administration was being stacked with Washington insiders and agents of the status quo.

Since that time it is obvious that two things have occurred as a result of this ‘Washington insider’ bias. First, there has been no real reform. Insiders are likely to defend the status quo for the simple reason that they and those with whom they associate are the ones who represent the status quo in the first place. What happens when a company is nationalized or declared bankrupt is instructive; here, new management must be installed to prevent the old management from covering up past mistakes or perpetuating errors that led to the firms demise. The same is true in government.

That no ‘real’ reform was coming was obvious, even by June when I wrote a brief note on the fake reform agenda. It is even more obvious with the passage of time and the lack of any substantive reform in health care.

Second, Obama’s stacking his administration with insiders has been very detrimental to his party. I imagine he did this as a way to overcome any worries about his own inexperience and to break with what was seen as a major factor in Bill Clinton’s initial failings. While I am an independent, I still have enough political antennae to know that taking established politicians out of incumbent positions (Joe Biden, Janet Napolitano, Hillary Clinton, Rahm Emanuel, Kathleen Sebelius or Tim Kaine) jeopardizes their seat. So, the strategy of stacking his administration has not only created a status quo bias, but it has also weakened his party.

more at....http://www.nakedcapitalism.com/

[chill_wind]

1. K & Recommended.

This is a pretty balanced critique, IMHO, but still comes out overall supportive of Taibbi's main points:

I don’t care if Froman or Geithner ‘intended’ to favour Citi over other institutions; I care whether they were mentally predisposed to helping Citi and other large institutions at the expense of others because they ascribed unwarranted and disproportionate importance to them. Unfortunately, cognitive regulatory capture leads to crony capitalism just as outright corruption would do.