OK, I'm looking down the employee list of Goldman Sachs and I don't really see anyone that jumps out at me to replace Summers or Geithner.

I don't think Obama really has the overall picture of what is going on, so we'll just muddle on with Geithner. At least he politely listen when the President speechifies.

I'd really like to see how much biz GS will get brokering carbon tax credits now.

DeFazio as gov would be great, but I think he doesn't want to get caught betwixt the budget and the public employee unions, its a no-win for him - At least compared to being a rep. Now maybe replacing Merkley or Biden might be worth considering . . .

More on the greatness that is Geithner here.

The seminal malfeasance here was the Larry Summers/Robert Rubin/Alan Greenspan/Phil Gramm engineered repeal of Glass Steagal back in 1999. It's OK to have a wild, wild west investment banking sector (with disclosure requirements and appropriate protections against fraud).

But investment banking should not be wrapped into the commercial banking system. Deals should be at arms length.

Nor should the investment banking sector (or homeowners or unions or anyone else for that matter) be coddled by special deals brokered by the influential government officials.

"Geithner ended up dictating that all of AIG's counterparties"

That's rich, if true. GS was the biggest counterparty on those pay-thrus. Besides it worked great for Hank and friends. AIG gets $6B (or whatever) and it goes straight thru to GS to bail them out with no obligation on GS' part to the Fed at all.

Full quote makes more sense than the edited version:

"Geithner ended up dictating that all of AIG's counterparties get full payment"

I have got to admit that Obama's economic team kinda leaves a lot to be desired unless you are a wall street insider.

Jack, don't worry, Dr. No will find all sorts of creative ways to raise your taxes.

In the big scheme of things, we are on an unsustainable course and honesty is not politically expedient for either party (unless it can be used to discredit the other).

The new ruling party continues down an old path: taking credit for illusory "successes", promoting changes that have no hope of penciling out, blaming the opposition party for the entire mess and issuing vague warnings about the road ahead.

The opposition party continues the path of exposing the obvious mistakes of the ruling party and conflating them with imagined ones. The whole while they ignore their responsibility for participating in the long series of acts and equivocations that produced this mess.

The hats have changed but the game remains the largely the same - you acquire and maintain power by manipulating political levers that shouldn't really exist in the first place.

Most of these political levers evolved as generations of voters negligently ceded power to the government so it could promote unrealistic expectations.

As long as we (voters) expect that elected leaders can successfully dictate, manage, massage, tweak, etc. economic policy in order to promote "the general welfare" (whatever utopian model you prefer), we will enable powerbrokers to profit from inside knowledge, benefit from pay-to-play/crony capitalism and to shift their risks onto the public fisc.

Most voters remain pawns in a game they can't begin to comprehend, casting votes for the party or personality who is better positioned to exploit popular myths within a particular election cycle.

Given the unfolding crisis, the next time we collectively "throw the bums out" will probably come a lot sooner than the bums (from any of the parties) expected.

I just hope we figure out how to replace them with people who are not trying to sell us more magic beans.

PS - Whew! Forgive me for going a little "Tensky" on everyone. I just couldn't snark on this subject today.

The always-excellent Joe Bageant on our economic snafu:

http://www.joebageant.com/joe/2009/11/one-party-has-no-heart.html

Grady, you are right on - we need to reactivate the Glass-Steagall provisions that separated investment banking from commercial banking. Unfortunately, many banks are now not only too big to fail, they're also too big to break up, because they've accumulated so much power in Congress.

Gawd Jack, that's all we need. Another Union stooge.

Most of his funding comes from Unions and Lobbyists. check it out on Opensecrets.com.

DeFazio carefully manages to present himself as a "maverick" but he only votes against the Democrats when it won't make any difference in the outcome. He only plays up his membership in the Progressive Caucus to carefully selected audiences.

He's smart not to go for Governor. If he did that he might have to actually accomplish something. All he has to do now is make meaningless speeches.

You can bet he is going to be making hay about the mismanagement of the stimulus. Hoping people forget that he voted against ti because it didn't put all the money in the hands of incompetent bureaucrats.

Pat, I agree with your assessment.

I just about gagged last Fall when Clinton (the Bill one) said isn't it great we repealed Glass Steagall? Now we can save the system by bringing all the investment banks into the commercial banking system.

Problem is if we don't move back towards Glass Steagal, we either will have repeated bubble cycles or ponderous regulation that stunts economic growth and yields even more opportunities for the power crowd to play its inside/outside game. Structural regulation and disclosure requirements are the only things that have staying power.

If the Nobel economics committee had any sense it would have posthumously awarded a prize to Messrs. Glass and Steagal, instead of statistician dweebs like Krugman.

Pancho hits the nail on the head. The powers that be are hard at work blowing up the next bubbles as we speak.

And to get back to Jack's post -- Bob Rubin's book makes an interesting read. You'll find Tim TurboTax Geithner pictured there as one of his boys. I must say though, I'm willing to give the boys a lot of slack for the spur of the moment, caffeine induced decisions they made late last year. The system had frozen, banks runs had started -- there had to be massive, temporary intervention to keep us out of an uncontrolled meltdown that would have ended up in the Depression era 20 percent plus unemployment range.

Hilarious headline in the WA Post this a.m. about "Even ex-Bush aides rally to defend Geithner."

DOH! He's acted like the errand boy for the banksters since Day 1 ... why wouldn't the Paulson gang like him?

John Dunshee: Spot on about DeFazio. Just what Oregon needs - a bald-headed blowhard career politician that hasn't held a real job in nearly 20 years.