Wednesday, March 18

"Obama's Real Test"

Another interesting and informative article courtesy of NY Times op-ed columnist Thomas Friedman, putting the current financial crisis into terms even a neophyte can understand:
When you hear a sitting U.S. senator call for bankers to commit suicide, you know that the anger level in the country is reaching a “Bonfire of the Vanities,” get-out-the-pitchforks danger level. It is dangerous for so many reasons, but most of all because this real anger about A.I.G. could overwhelm the still really difficult but critically important things we must do in the next few weeks to defuse this financial crisis.
(The) plan will begin by using up the $250 billion or so left in TARP funds to start removing the toxic assets from the banks. But ultimately, to get the scale of bank repair we need, it will likely require some $750 billion more.

The plan makes sense, and, if done right, it might even make profits for U.S. taxpayers. But in this climate of anger, it will take every bit of political capital in Barack Obama’s piggy bank — as well as Michelle’s, Sasha’s and Malia’s — to sell it to Congress and the public.

The job can’t be his alone. Everyone who has a stake in stabilizing and reforming the system is going to have to suck it up.
The only person with the clout to sell something this big is President Obama. The bankers and Congress will have to help; every citizen will have to swallow hard. But ultimately, Mr. Obama will have to persuade people that this is the least unfair and most effective solution. It will be his first big leadership test. It is coming soon, and it is coming to a theater — and a bank — near you.
Read more about the solution, including Friedman's call for "the A.I.G. bankers to take one for the country and give up their bonuses" and a clear, understandable explanation of what went wrong...If you aren't a banker, and don't exactly understand the whole situation, this article should help (and Friedman even shows a hint of hesitant optimism).

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