Well I thought that President Obama did a masterful job last night with Jay Leno. He gets high marks for remaining cool and, as ever, portraying supreme confidence (and even a sense of humor).

Specifically:

1) He understated AIG’s “billions” in swap related derivative transactions (it’s half a trillion).

2) He DID utter the “D” word, somewhat matter of factly, (but at least correctly identifying the problem).

3) I think he understated the extent of America’s growth in recent years, being “paper” or “financial” growth at 40%.

4) He worried me in his statement that he wants to preserve innovation in the financial markets.

5) He scared the shit out of me when he said that we need the banks and we need their ability to provide credit.

We definately DO NOT NEED banks as they currently function, and we especially do not need ANYTHING in this country that is perceived as “too big to fail”, because that means that no matter what they do, their “too big to fail-ness” GUARANTEES that the government, and the people, will be made to compensate for it, whether it be greed, corruption, excess, poor judgement, lack of discretion or just general failure. “Too big to fail” is the “get out of jail card” for all that and more, and that is a message that we must not send, unless we are willing to accept that they are running the show, and we are playing by their rules, not ours. That is what the outrage is about. That is what needs to be addressed.

In general, he did an excellent job of doing exactly what is called for if you hope to maintain the status quo, but just tweak it a little.

He did establish that he basically understands the problems with leveraging paper into wildy ficticious valuations based on risky underlying assumptions, but did not go far enough, in my mind, to invalidate the entire process of derivatives leveraging. The process is flawed and needs radical adjustment or complete elimination.

That is why we put hin in office: to reverse this “speculative leveraging and hedging to create wealth” mentality on Wall St., in London, and across the globe.

He identified AIG as an insurance company that morphed into a hedge fund, but he is surely not suggesting that we do away with hedge funds, or do away with derivatives – only tweak ‘em a little with some regulatory oversight.

This is a dangerous middle ground position coming from the candidate for change. This is why we are still bailing out the financial oligarchy, because we don’t want to cancel out the leveraged betting and get back to investing.

Though Mr. Obama made a reference to the importance of the physical economy, and kids wanting to grow up to be engineers or teachers instead of investment bankers (producing things for the good of the general welfare) I think he is still walking a moderate tightrope when it comes to bringing back Glass Steagall, fostering a Cuomo-style Pecora commission, killing off Gramm-Rudman and taking similar measures as drastic as those which FDR undertook in response to the excesses of the “economic royalists”.

In summation, I don’t think we can quite equate Barack Obama to FDR, whom he is said to be a student and great admirer of. At least not yet. Still … I can only imagine how badly this would have gone if it had been George Bush up there, or even John McCain.

Stay tuned for the televised White House bowling match where Barack gets a sound ass-whipping from the Special Olympic’s pro bowling pick.

You Should Also Check Out This Post:

More Active Posts: