The Obama Administration appears a bit schizophrenic these days. In California, the President sounded like the pitch perfect voice of populist anger at the AIG bonuses and using – finally – a key word in diagnosing our economic ills, "culture." But, Secretary of the Treasury Tim Geithner still is figuring out how best to shore up that culture and blithely failing to perceive the ways in which that culture revolts most Americans. He should be fired.
President Obama was forthright about the ultimate problem with the AIG bonuses: "And that is a system and culture that made them possible – a culture where people made enormous sums for taking irresponsible risks that have now put the whole economy at risk." He might have added that this culture did not even really produce anything of actual value, that not one of these bonuses went to anyone who invented a more fuel efficient car or a way to more cheaply bring the internet to rural areas or a cure for a pernicious disease. They created derivatives and credit default swaps, bets on hedges and sophisticated ponzi schemes. One of the blind spots of unregulated capitalism is that it values anything someone else is ready to buy.
The President also tried to tie in his budgetary proposals with the remedy for what ails but, again, one wishes he would go further. The idolatry of the market that previously prevented health care reform could scarcely be in more ill repute. And, while people are generally angry at the rich is not a bad time to suggest higher tax rates, not now, when the economy is still trying to prevent free fall but as part of a long-term plan to genuinely change the culture of greed that has dominated our economic counsels for too long.
Secretary Geithner, alas, is an imperfect messenger for such reforms. He is as much a part of the culture that got us into this mess as it is possible to be unless your name is Hank Paulson. Geithner was at the New York Federal Reserve during the start of the bailouts last year, so he cannot plead ignorance of arrangements like the AIG bonuses: If he did not know, he should have known. Geithner has not once shown any evidence that the problem is not merely one of excess but one of structural limitations, that the government must police the economic world because people cannot be trusted to resist greed in a system that rewards it. Even Alan Greenspan gets that his assumptions were wrong about how capitalists would behave. Did I miss a similar mea culpa from Geithner?
And, of course, anyone who cheats on his taxes is someone who does not take prima facie umbrage at gaming the system.
It is funny to see how the President seems to understand that the "experts" in the economy were wrong or corrupt, that the values of common people are often truer and more moral than the powerful and the smart, that populism need not be ugly. Yet, on an issue like embryonic stem cell research, we have to let the experts decide not "ideology" even though "ideology" is another way of saying values organized into a coherent whole. Of course, with conservative Sen. Orrin Hatch and Nancy Reagan supporting stem cell research, I have given up hope of expecting Obama to see the light on that issue. But, there is still hope that he will translate his populist words into more populist policies that will not bolster the economic culture of yesterday but replace it with an economic culture more responsive to the needs and desires of the common man. He can start be finding a new Treasury Secretary.