Too Big to Fail: White House Doesn't Get It

Spitzer noted, among other salient points, that divergent former Fed Chairs such as Alan Greenspan and Paul Volcker – also an economic advisor to President Obama – have converged on their agreement that stronger reform of the financial industry is necessary. The White House, Spitzer added, is “the only institution that doesn’t get” the continuing danger of having massive banks that are ‘too big to fail.‘ Among other points of interest, the show’s guests are all venerable Wall Street veterans who noted that American’s need to be engaged in this issue, and asking the tough questions in order to hold the the White House — under both administrations, the Treasury and the Federal Reserve accountable.The reform effort is being led by Treasury Secretary Tim Geithner – the former failed head of the New York Federal Reserve Bank, a position traditionally held by Wall Street-friendly scions; and under whose leadership failure to regulate banks and financial institutions contributed to the financial crisis – and by the President’s chief economic advisor, Larry Summers a multi-million dollar benefactor of the financial industry through speaker fees and other endorsements. 

Spitzer was joined on the panel by Rob Johnson, a former Soros fund manager as well as the former chief economist for the Senate Banking Committee during the Savings & Loan crisis. The discussion ranged from financial industry reforms such as the Consumer Financial Protection Agency, to public outrage over firms like Goldman Sachs that are making enormous profits on the backs of taxpayers made possible by the trillion dollar infusions of federal funds that prevented a larger financial disaster.

Such growing sentiment about the odious nature of Wall Street was also echoed by administration officials on the Sunday morning talk circuit. “The bonuses are offensive,” said the President’s senior adviser David Axelrod on ABC’s “This Week,” adding that banks must do more to support lending across the country and should stop their lobbying efforts aimed at blocking the passage of new consumer financial protections and needed industry regulations currently being considered in Congress.

“They ought to think through what they are doing, and they ought to understand that a year ago a lot of these institutions were teetering on the brink, and the United States government and taxpayers came to their rescue” Axelrod said. “They have responsibilities, and they ought to meet those responsibilities” by displaying good corporate citizenship and playing fair. They have a public duty to their country as well as to the American taxpayers. Amen!