President Obama can’t have it both ways on reform of the financial industry, which led the nation into the Great Recession with wild speculative lending over the past several years. He has to come down either as a reformer or a collaborator.
Those options are in stark relief as the president’s choice to remain as the Federal Reserve chairman, Ben Bernanke, heads toward a confirmation vote in the Senate. Senators such as Bernard Sanders, I-Vt., and Barbara Boxer, D-Calif., want Mr. Bernanke put out to pasture, arguing with impeccable logic that the guy in charge during the financial meltdown should not be rewarded with another term at the Fed.
Yet, President Obama is backing Mr. Bernanke, who some economists believe may have been slow to realize the crisis but eventually guided the nation through the worst of it and prevented a full-blown depression, and is worthy of praise.
Time magazine, after all, named him its Person of the Year. Of course, we believe Joseph Stalin and Adolph Hitler also were named men of the year in the 1930s, which could illustrate something; we aren’t sure what.
The president also has continually defended his choice as Secretary of the Treasury, Timothy Geithner, who was -- and some say still is -- heavily involved with failed financial institutions and botched bailout efforts and was sharply criticized by reformers in the Senate as well. Rightly so, we would say.
So once again, a president who came into office promising sweeping reform has instead taken baby steps and strongly signaled that he is far more status quo than radical reformer by attempting to straddle conservative and liberal positions. This, Mr. President, is a biggest loser approach, and we have no doubt most of your friends and enemies would agree. We therefore have a suggestion: Go ahead and back Mr. Bernanke and retain Mr. Geithner, if you must, but also hire someone with an anti-Wall Street reputation -- like Eliot Spitzer -- to serve as your special watchdog for the financial sector, and hire former Fed Chairman Paul Volcker or columnist/economist Paul Krugman to advise you on Treasury policy.
And then, take the best advice you get.