The reviews are in on Barack Obama’s plan to address the crisis of Wall Street speculation and casino capitalism that has dramatically increased the gap between working Americans and the rich, created pressure for the deindustrialization of the United States and depression of wages and income for workers and farmers and created a nasty banking crisis.
Though even Obama acknowledges that this is the big one –- the issue that as much as anything led Americans to elect him last fall –- his “financial overhaul plan” did not merit above-the-fold coverage on the front page of The New York Times, the country’s “newspaper of record.” Two stories from Tehran and one on a poll about health care reform held the top spots. The overhaul merited only a feature suggesting –- correctly — that there was “only a hint of Roosevelt” in Obama’s plan.
In other words, for the great mass of Americans there will be no new “New Deal.” To be sure, there’s some good stuff here: creation of a new agency to help protect consumers of “financial products” and some stronger transparency requirements, a few more rules regarding banks and mortgage-backed securities. “But,” as Times writer Joe Nocera notes, “it’s what the plan doesn’t do that is most notable.”Nocera focuses, appropriately enough, on the failure of the administration to do much about the problem –- for taxpayers and for democracy –- of banks that are “too big to fail.”
But the real concern ought not be focused on what this seemingly tepid plan fails to do.
The real concern is what it does.
The plan dramatically increases the authority and reach of the Federal Reserve, an already too powerful and unaccountable institution that will — to the delight of the administration’s “Fed men”: Treasury Secretary Tim Geithner and administration economic adviser Lawrence Summers — become what the Wall Street Journal says will be “the nation’s most powerful financial overseer.”
“The proposal, if passed into law, would represent one of the biggest changes ever in the Fed’s role,” explains Journal writer Sudeep Reddy. “The central bank would win power to monitor risks across the financial system, and sweeping authority to examine any firm that could threaten financial stability, even if the Fed wouldn’t normally supervise the institution. The nation’s biggest and most interconnected firms would be subject to heightened oversight by the central bank.”