One issue that 'progressives' and 'right-wingers' seem to agree on is the way in which the Obama Administration has handled, or to be more direct, mishandled the banking industry.

John Judis at the New Republic thinks that Obama just doesn't get it when it comes to understanding the issues of Wall Street and Main Street.

The excerpts that Bloomberg published Wednesday from its interview with Barack Obama provoked some indignation from Simon Johnson, Paul Krugman, and others, but the full interview, published yesterday morning by Bloomberg BusinessWeek, deserves a few additional howls. It shows the degree to which Obama not only doesn’t understand but, on a deeper level, also doesn’t share the outrage many Americans—from left-wing bloggers to right-wing tea-partiers—feel toward the Wall Street CEOs and traders who have made off like bandits during the financial crisis they helped bring about.

It’s not the substance of what Obama says—he doesn’t back off on financial regulation or health care reform. It’s his tone, his emphases, and where he allows his sympathies to fall. [...]

Overall, the impression the interview leaves is of a president surprisingly oblivious to the fury that is sweeping the nation. Obama has occasionally attempted to speak to it, or read speeches that address it. But this interview shows that, in the choice between Main Street and Wall Street, his natural inclinations lie more toward one side—and it ain’t Main Street.

Matthew Rothschild at The Progressive points out that Obama and his advisers have failed to embrace progressive solutions to the banking and economic crisis. This has allowed similar criticism from both sides of the political spectrum.

Barack Obama and many Democrats have been way too timid in going after big business. In fact, the coziness of Tim Geithner and Ben Bernanke and Larry Summers with the Wall Street bankers has left Obama wide open for this kind of criticism.

A few Democratic populists have recognized this, most notably Marcy Kaptur, Dennis Kucinich, and Bernie Sanders, but Rahm Emanuel and David Axelrod and Obama himself have been reluctant to embrace progressive populism.

Sanders has called for some of the Wall Street wheeler-dealers to go to jail, and Sarah Palin suggested the same thing on Saturday.

The bank bailout is killing Obama. All Obama could muster in his State of the Union was the comment, “If there's one thing that has unified Democrats and Republicans, it's that we all hated the bank bailout. I hated it. You hated it.”

But Obama voted for the bailout when he was a Senator, and then expanded it when he was President.

It is a cement block tied around his ankles.

Both sides are criticizing Obama's handling of the banking and economic crisis. Both sides have answers on how to 'untie' the mess. But don't expect any agreement on the solution.

The old Washington shell game. Lobbyist out, lobbyist in.

That is why the lobbyist always wins!!!

The following is an excerpt from the transcript of PBS's Bill Moyers Journal.

One year ago, right about now, The economy keeled over, like an overstuffed sow.

First Bush, then Barack had to fix things at once. We had to shape up those banks and their high wire stunts.

But banks bought up banks, gladly too big to fail And sent millions to Congress so their views would prevail.

Now bonuses are back and phony finances abound, But all must be well, there's a market rebound.

Executives to bankers have wallets quite blubbery... And, oh by the way, it's a jobless recovery.

Bill Moyers: Polls show the overwhelming majority of Americans favor a non-profit alternative -- like Medicare -- that would give the private health insurance industry some competition. But if so many Americans and the President himself want that public option, how come we're not getting one?

Because, the medicine has been poisoned from day one, in part because of that same revolving door that Congresswoman Marcy Kaptur (D-OH)and Simon Johnson (former Chief Economist at the International Monetary Fund) were just talking about. Movers and shakers rotate between government and the lucrative private sector at a speed so dizzying they forget who they're working for.

Sen. Baucus:Our plan does not include a public option.

Moyers: Take a close look at that woman sitting behind Montana Senator Max Baucus. He's the Democrat who's the Chairman of the Finance Committee. Liz Fowler is her name. And now get this. She used to work for WellPoint, the largest health insurer in the country. She was Vice President of Public Policy. And now she's working for the very committee with the most power to give her old company and the entire industry exactly what they want: higher profits, and no competition from alternative non-profit coverage that could lower costs and premiums.

I'm not making this up. Here's another little eye-opener. The woman who was Baucus' top health advisor before he hired Liz Fowler? Her name is Michelle Easton. Why did she leave the Committee? To go to work -- where else? -- at a firm representing the same company Liz Fowler worked for WellPoint. As a lobbyist.

It's the old Washington shell game. Lobbyist out, lobbyist in. And it's why they always win.

They've been plowing this ground for years, but with the broad legislative agenda of the Obama White House, it's more fertile than ever. The health insurance industry alone has six lobbyists for every member of Congress, and more than 500 of them are former congressional staff members.

Just to be certain Congress sticks with the program, they've been showering megabucks all over Capitol Hill. From the beginning, they wanted to make sure that the bill that comes out of the Finance Committee next week puts for-profit health insurance companies first, by forcing the uninsured to buy medical policies from them. Money not only talks, it writes the prescriptions.

In just the last few months, the health care industry has spent 380 million dollars on lobbying, advertising and campaign contributions. And a million and a half of it went to -- don't hold your breath -- Finance Committee Chairman Baucus, who said he saw "a lot to like" in two proposed public options but voted "no."

Sen. Baucus: My job is to put together a bill that gets 60 votes. Now I can count and no one has been able to show me how we can count up to 60 votes with a public option in the bill.

Moyers: Of course not. They can't get 60 votes. Not when the people who want a public alternative can't possibly scrape up the millions of dollars Baucus has received from the health sector during his political career.

Over the last two decades, the current members of the Senate Finance Committee - you're looking at them -- have collected nearly 50 million dollars from the health sector. A long-term investment that's now paying off like a busted slot machine.

Not that we should be surprised. A century ago, muckraking journalists reported that large corporations and other wealthy interests virtually owned the Senate, using bribery, fraud, and sometimes blackmail to get their way. Jokes were made about the Senator from Union Pacific or the Senator from Standard Oil.

This fellow in particular was out to break their grip. His name was David Graham Phillips, and one day in 1906, readers of Cosmopoilitan Magazine opened its March issue to discover the first of nine articles by Phillips titled "The Treason of the Senate."

He wrote: "Treason is a strong word, but not too strong, rather too weak, to characterize the situation in which the Senate is the eager, resourceful, indefatigable agent of interests as hostile to the American people as any invading army could be…"

The public outrage provoked by Phillips and other muckrakers contributed to the passage of the Constitutional amendment providing for the direct election of Senators, who until then were elected by easily bought-off state legislators.

Of course, like water seeking its own level, big money finds its way around every obstacle, and was soon up to its old tricks, filling the pockets of friendly politicians. Today none dare call it treason. So how about calling it what it is: a friendly takeover of government. A leveraged buyout of democracy.

Outrageous? You bet. But don't just get mad. Get busy.

The 'Who Done It' Battle

The true reality is that people are the losers while the heads of the banks and the corporate CEO's get richer. Money going to the top does not trickle down to the bottom. But Paul Krugman and Robert Scheer are both sure they know 'Who Done It.'

Reagan Done It By Paul Krugman

“This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. ... All in all, I think we hit the jackpot.” So declared Ronald Reagan in 1982, as he signed the Garn-St. Germain Depository Institutions Act.

He was, as it happened, wrong about solving the problems of the thrifts. On the contrary, the bill turned the modest-sized troubles of savings-and-loan institutions into an utter catastrophe. But he was right about the legislation’s significance. And as for that jackpot — well, it finally came more than 25 years later, in the form of the worst economic crisis since the Great Depression.

Now, the proximate causes of today’s economic crisis lie in events that took place long after Reagan left office — in the global savings glut created by surpluses in China and elsewhere, and in the giant housing bubble that savings glut helped inflate.

But it was the explosion of debt over the previous quarter-century that made the U.S. economy so vulnerable. Overstretched borrowers were bound to start defaulting in large numbers once the housing bubble burst and unemployment began to rise.

These defaults in turn wreaked havoc with a financial system that — also mainly thanks to Reagan-era deregulation — took on too much risk with too little capital.

Reagan Didn’t Do It By Robert Scheer

Reagan didn’t do it, but Clinton-era Treasury Secretaries Robert Rubin and Lawrence Summers, now a top economic adviser in the Obama White House, did. They, along with then-Fed Chairman Alan Greenspan and Republican congressional leaders James Leach and Phil Gramm, blocked any effective regulation of the over-the-counter derivatives that turned into the toxic assets now being paid for with tax dollars.

How can Krugman ignore the wreckage wrought during the Clinton years by the gang of five? Rubin, who convinced President Clinton to end the New Deal restrictions on the merger of financial entities, went on to help run the too-big-to-fail Citigroup into the ground. Gramm became a top officer at the nefarious UBS bank. Greenspan’s epitaph should be his statement to Congress in July 1998 that “regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.” That same week Summers assured banking lobbyists that the Clinton administration was committed to preventing government regulation of swaps and other derivatives trading.

Then-Rep. Leach, as chairman of the powerful House Banking Committee, codified that concern in legislation to prevent the Commodity Futures Trading Commission or anyone else from regulating the OTC derivatives, and American Banker magazine reported that the legislation “sponsored by Chairman Jim Leach is most popular with the financial services industry because it would provide so-called legal certainty for swaps transactions. … ”

Legal certainty for swaps—meaning the insurance policies of the sort that AIG sold for collateralized debt obligations without looking too carefully into what was being insured and, more important, without putting aside reserves to back up the policies in the case of defaults—is what caused the once respectable company to eventually be taken over by the U.S. government at a cost of $185 billion to taxpayers.

Leach, an author of the Gramm-Leach-Bliley Act, which allowed banks like Citigroup to become too big to fail, is now a member of the board of directors of ProPublica, which bills itself as “a non-profit newsroom producing journalism in the public interest.” Leach serves as the chair of a prize jury that ProPublica has created to honor “outstanding investigative work by governmental groups,” and perhaps he will grant one retrospectively to Brooksley Born and the federal commission she ran so brilliantly before Leach and his buddies destroyed her.

Who will change it?

Economic Crisis: Money & Power

Matt Taibii says the global economic crisis isn't about money-it's about power. Below is an excerpt from his Rolling Stone article "The Big Takeover."

How Wall Street insiders are using the bailout to stage a revolution

The real question from here is whether the Obama administration is going to move to bring the financial system back to a place where sanity is restored and the general public can have a say in things or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex. It might not bode well that Geithner, Obama's Treasury secretary, is one of the architects of the Paulson bailouts; as chief of the New York Fed, he helped orchestrate the Goldman-friendly AIG bailout and the secretive Maiden Lane facilities used to funnel funds to the dying company. Neither did it look good when Geithner - himself a protégé of notorious Goldman alum John Thain, the Merrill Lynch chief who paid out billions in bonuses after the state spent billions bailing out his firm - picked a former Goldman lobbyist named Mark Patterson to be his top aide.

In fact, most of Geithner's early moves reek strongly of Paulsonism. He has continually talked about partnering with private investors to create a so-called "bad bank" that would systemically relieve private lenders of bad assets - the kind of massive, opaque, quasi-private bureaucratic nightmare that Paulson specialized in. Geithner even refloated a Paulson proposal to use TALF, one of the Fed's new facilities, to essentially lend cheap money to hedge funds to invest in troubled banks while practically guaranteeing them enormous profits.

God knows exactly what this does for the taxpayer, but hedge-fund managers sure love the idea. "This is exactly what the financial system needs," said Andrew Feldstein, CEO of Blue Mountain Capital and one of the Morgan Mafia. Strangely, there aren't many people who don't run hedge funds who have expressed anything like that kind of enthusiasm for Geithner's ideas.

As complex as all the finances are, the politics aren't hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate states to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system - transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.

Read the complete article here.

What Happened at AIG?

The story of AIG is complicated. Matt Taibbi, a contributing editor at Rolling Stone, explains to Laura Flanders on GRITtv what happened.

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