Can Anyone Transplant a Spine into Obama to Kill Citi’s Bailout Bill?

By William K. Black
Bloomington, MN: December 12, 2014

President Obama is a terrible negotiator and if Senator Warren and Representative Pelosi are unable to save him from himself he will effectively end his presidency as even an episodic force for good.  Yes, the Republican legislators will have more power in Congress next month.  Obama’s justification for supporting the odious omnibus budget bill is avoiding that danger.  No, the fact that the Republican will take control of both houses in January does not mean that Obama would be forced into approving an even worse budget bill next year.

Obama needs to do three things to succeed in the negotiations.  First, state they he will sign only a clean bill that has nothing in it other than the spending authorization.  Second, veto anything other than a clean bill.  If the Republicans want to force the U.S. government to shut down so that they can deliver special favors to the five largest U.S. banks (that’s what the current bill that Obama is urging Democrats to agree to does), then they can do so.  If Obama does not blink, the Republicans will lose and look terrible in the process because their actions are indefensible.  Third, pound away at indefensible portions of the Republican demands such as the giveaway on derivatives to the five biggest banks.  The Republicans have presented Obama with a Christmas gift by making their policy demand a policy surrender to the five largest banks.  Note that the surrender is so unprincipled that no Republican is publicly supporting the case for gifting the five largest banks with a promise to bailout their future financial derivative losses.  With luck, Obama’s opposition would smoke out Citicorp, which drafted this giveaway, and lead the big banks to attack Obama.  That would be a second political gift just before Christmas.  An element of this strategy is rallying Congressional Democrats to forcefully and publicly oppose such subsidies to the banks.  That opposition might cost them some campaign contributions, but it would greatly add to public support for the Congressional Democratic stalwarts.

If Obama gets his way and surrenders to the Republicans on the legitimacy of using bills on other matters to extort Obama and the Democrats into passing obscene provisions like the gift to the Big Five banks that trade virtually all the derivatives, then the Republicans will have for the remainder of Obama term in office a strong Congressional majority, leverage, and the certain knowledge that they are negotiating with someone with rounds heels who falls over when pushed.  They will subject him to the death of ten thousands cuts.

The Republicans now have joint responsibility for the government.  The people of the United States, even those that purport to hate our government, discover when the Republicans shut it down that they actually need and want a government and large numbers of people become hostile to the Republicans.  Obama needs to practice saying the word “no” and then making it clear through his actions that “no” means “no.”

Warren and Pelosi are trying hard to save Obama, their Party, and our Nation.  It is bad enough that they have to confront the Congressional Republicans.  It is unconscionable that they have to stop a White House run by invertebrates from committing reputational and policy suicide.

16 responses to “Can Anyone Transplant a Spine into Obama to Kill Citi’s Bailout Bill?

  1. eachcitizen100


  2. Thanks.

    Conservatives over at redstate agree with us.

    Would be nice if there were a springboard for a more bi-partisan effort against Wall Street CEO’s and the oligarchs.

  3. Given the President’s treasury appointments and neoliberial stance on the defict have you ever thought that this is the out come that he wanted and played to get.

  4. From your lips to God’s ears, or if you prefer, from your screen to God’s eyes.

  5. Steven Greenberg

    Could it be that our dear leaders have all been warned that the CLO’s are about to blow up in our faces, and that is why we need this legislation? If they do blow up and we are forced to bailout the banks, they should be nationalized, and the executives ought to all give up their bonuses and go directly to jail without even passing Go.

    • Steven Greenberg

      Ii should make clear that if the CLOs are about to blow, I don’t think this Wall Street give away is the answer. I am just saying that might be the way that some of our dear leaders were convinced to go along with it.

      I agree with the comments that Obama’s politics and understanding of economics is more in line with the Republicans than it is with the progressive Democrats. After all, it was Obama who decided to do away with the few progressive experts in his administration and replace them with more Wall Street types Just look at his two recent nominees, Lynch and Weiss.

      Greenberg’s Law of Counterproductive Behavior – “If you see a behavior that seems to you to be counterproductive, perhaps you have misunderstood what the behavior was trying to produce.”

  6. Expecting Obama to veto the omnibus spending bill if the Wall Street giveaways aren’t stripped from the bill would be asking him to cease respecting the wishes of his benefactors and it hasn’t happened so far. Why is there reason to expect it now? Obama made his soft on Wall Street agenda obvious when he ran for president the first time and has been consistent in prostrating himself to the demands of his Wall Street masters.

  7. Flat out extortion, no other way to put it. Obama is a weasel, he does not stand for anything. The next two years will be bill after bill of big money holding the rest of the country hostage to its demands.

    America is dying, something BIG must happen if we are to change course, and it must happen soon.

  8. John Hemington

    There seems to be an assumption here which surprises me coming from Professor Black. That is that this bill is something which Obama does not want. This would seem to be entirely inconsistent with all of the other actions of his Presidency where he has consistently supported the desires of Wall Street no matter how absurd — up to and including a refusal to permit the prosecution of an absurdly large number of clear-cut criminal actions on the part of senior bank managers and others within the greater financial system. It’s pretty clear that this bill is something which Obama wanted badly enough to get down and dirty in the trenches of Congress to insure that it passed — and not because he is afraid of an incoming Republican controlled Congress.

  9. Black is right of course in principle, but he always omits discussing the vital detail: voters and democracy:

    * The House is controlled by Republicans who have a substantial majority, and therefore their policies are the will of the majority of the voters.

    * The President himself has been re-elected convincingly on his record of massive bankers bailouts and no-prosecution policies for rich fraudsters.

    If the majority of voters endorse and elect or re-elect congresspeople and presidents campaigning on their record of massive bankers bailouts and no prosecutions for rich fraudsters, and proposing more of the same, that’s just how democracy works.

    What perhaps need changing is the culture and attitudes of the majority of voters; but politicians that get re-elected on a record of grifting and complicity in grifting are otherwise just doing the democratic will of their voters.

    • Steven Greenberg

      I think it is wrong to posit that “… the majority of voters endorse and elect or re-elect congresspeople and presidents campaigning on their record of massive bankers bailouts and no prosecutions for rich fraudsters”

      The candidates don’t campaign on that platform, and the voters are easily convinced that this is not their record, unless the opposition points out that it is their record. I’d like to see Democrats campaign on the issue that Republicans are soft on white-collar crime. Elizabeth Warren does, and she wins. You also have to connect why the white collar crime is robbing you of wages, safe mortgages, and jobs. You also have to have a record of doing something about this crime. Obama obviously had no record against white-collar crime. What is a voter to do when the Republicans are soft on crime and so are the Democrats? There is no choice here.

      • «I think it is wrong to posit that “… the majority of voters endorse and elect or re-elect congresspeople and presidents campaigning on their record of massive bankers bailouts and no prosecutions for rich fraudsters”

        The candidates don’t campaign on that platform, and the voters are easily convinced that this is not their record,»

        That to me seems rather optimistic, because of the exposure that things like bailouts have been given, and the number of politicians (more often Republican) that have defended that in public, and the very explicit defense and support both by Bush and Obama for the bailouts.

        But this argument has a fundamental defect: bailouts for bankers and no prosecution for rich fraudsters *are* a significant part of the records of two presidents and hundreds of congresspeople, and if voters forget about that or don’t care about that, they are responsible adults and are still electing their leaders with that record, as if it mattered to them.

        The best argument one can make is perhaps that those issues as such are not the *leading* issue on which many politicians campaign, and that they are not the “button” issues that motivate most voters to vote one way or another.

        Similarly perhaps to what Norquist once said about deficits no longer mattering that much to Republican politics, because it is not a “vote-moving primary issue”:

        But if the voters *don’t really care* about the record of their congresspeople and presidents about financial looting, then they behave like notable “historian” Gingrich said:

        My usual quote from famous “historian” Newt Gingrich:
        «If you have a society where almost every middle class person routinely fudges the law, that’s telling us something. We have laws that matter – murder, rape, and we have laws that don’t matter. Speed limits are an example. Why would you think that a regulatory, process-oriented bureaucratic model would work?
        The first thing that every good American says each morning is “What’s the angle?” “How can I get around it?” “What does my lawyer think?” “There must be a loophole!” Then he proceeds to work the angle, and the bureaucracy spends its time chasing that and writing new regs to stop him. America is the most incentive-driven society on the planet.»

        which is a quote that I put in almost every one of my comments to Black’s well meaning articles.

        The issue is persuading USA voters that white collar crime should be prosecuted, not that it *happens*, they know very well that it happens and rich and not so rich bankers and their accomplices almost always get away with it.

        But they think it is not something that affects them directly, that only uptight nerds and jimini crickets worry about it, and that what matters to them is more like property taxes and cutting the pensions of state workers, and hoping that Wall Street bankers in between a looting and a fraud push property and stock prices up.

        What Black rarely (if ever) makes is why suburban property owning middle aged lady voters should give a damn about looting and fraud of bank and government money by bankers and their accomplices when thanks to the magic of ever ballooning debt levels it seems it does not affect them at all.

  10. «The next two years will be bill after bill of big money holding the rest of the country hostage to its demands.»

    Hostage? Demands? In the recent elections voters massively endorsed and elected politicians with a public record of trying to hard to pass bills benefiting big money interests. In practice they have a *mandate* to pass those bills; everybody knows what Republicans (and most Democrats) stand for, and if you vote for them, you endorse that.

    If the majority in congress will not pass «bill after bill of big money» friendly policies their voters could feel they have betrayed their mandate.

  11. Obama doesn’t lack a spine. He lacks a heart, a conscience, and a belief in “fiat justitia, ruat caelum.” Instead, he believes in “the perfect is the enemy of the good” and the good is anything we can get through the blasted Congress and put lipstick on!

  12. Obama not only has a spine but he is fierce. He is similar to the late radio personality Paul Harvey, who is quoted as having said “I am fiercely loyal to those who are willing to put their money where my mouth is.” And not only is he loyal with his mouth but with his power of making and executing laws.

    This is a huge part of the “free market” that neoliberals rave about– fiercely loyal presidents and Congress members being sold on the “free market” to the highest bidder:

  13. Excellent post.