Somehow, Obama’s vow of  ”tough new regulations for Wall Street” immediately loses credibility when followed by the tagline “crafted by Larry Summers and Tim Geithner“.

Here are some other headlines that would have a similar eyebrow-raising effect:

Hitler promises equal rights compensation for Israeli bankers
Bin Laden dedicates new wing in Afghan Democracy Library to Dick Cheney
Palin receives honorary doctorate from MIT

Somehow, there’s something just wrong with taking the two worst regulatory failures in the history of capitalism–whose lack of regulatory oversight precipitated the worst financial crisis in the history of capitalism–and putting them in charge of financial regulation.

Geithner, cited as an abject failure by S&L regulator William K. Black, was completely asleep at the wheel at the Fed:

Geithner was one of our nation’s top regulators during the entire subprime scandal. He took absolutely no effective action. He gave no warning. He did nothing in response to the FBI warning that there was an epidemic of fraud.

And Summers, in one of his rare moments of consciousness, was instrumental in defeating Brooksley Born’s pending legislation to regulate derivatives, back in 1998, when they were first “industrialized” by JP Morgan:

Deputy Treasury Secretary Lawrence Summers decried it before Congress as “casting a shadow of regulatory uncertainty over an otherwise thriving market.”

In yet another display of Obama’s conflicting ideologies, he states that “derivatives are a huge potential risk to the system” then turns around and chooses the “Dysfunctional Duo” to regulate them–the statement is simply not compatible with the action.

But this will not be the first time that the actions of the enigmatic Obama have been in direct conflict with his stated ideologies. 

Consider the recent inexplicable termination of Inspector General Gerald Walpin:

There’s the question of how Mr. Walpin was terminated. He says the phone call came from Norman Eisen, the Special Counsel to the President for Ethics and Government Reform, who said the President felt it was time for Mr. Walpin to “move on,” and that it was “pure coincidence” he was asked to leave during the St. HOPE controversy. Yet the Administration has already had to walk back that claim.

That’s because last year Congress passed the Inspectors General Reform Act, which requires the President to give Congress 30 days notice, plus a reason, before firing an inspector general. A co-sponsor of that bill was none other than Senator Obama. Having failed to pressure Mr. Walpin into resigning (which in itself might violate the law), the Administration was forced to say he’d be terminated in 30 days, and to tell Congress its reasons.

dataAs in Obama’s treatment of bankrupt-auto-industry bondholders, his rewarding of financial fraud in the bailouts, his promotion of regulatory failures, and now his firing of a public official who refused to roll over to protect a crony, these actions not only betray a conflict of stated ideology, but also a complete disregard for the rule of law.

Perhaps it’s the media’s deification of Obama that allows him to “ascend” above the law.

Is that an aura or a halo that’s been photo-shopped into the image in the Bloomberg article? Perhaps the media can prepare a crown of thorns next?

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