President Barack Obama was elected last year in a sizable victory over his Republican competitor. Bolstering his position was the huge Democratic majority in both houses of Congress. Given these advantages, combined with intelligence and his natural talent as an orator, the President could pretty much chart his own course.
He did so, immediately turning to the weak economy and the battered financial sector first. In his first days in office, Obama pushed through a sizable stimulus package, bailed out numerous financial institutions, and put into place a host of measures to prop up the banking industry at considerable cost to taxpayers.
The plan worked. The financial industry has roared back to life with huge profits and large bonuses all around as a result of the government’s largesse – well at least for most of the largest companies. The surviving large financial institutions are even larger and more dominant than before the crisis. Now, it is business as usual again on Wall Street. In this sense, Obama and his economic team have been very successful.
But at what cost?
People are angry about this juxtaposition. No wonder everyone is having a hissy fit about Goldman, the owner of allegedly market manipulating trading codes and winner of the Wall Street earnings parade.
So, as the President turns his sights to health care reform, he is finding a much chillier reception from the media, Congress and the American people. In my view, this is not necessarily because of his presenting the wrong proposal at the wrong time. Obama has simply wasted too much capital on bailing out the banks and this has left him in a weaker position politically.
To be sure, there are many reasons one could find fault with the proposed health plan. But, with tens of millions of Americans having no coverage, the time for change is now. We all know that Obama could have made those changes had he not bailed out the banks first. His mandate will have to be more limited now.
So, as the President continues his public relations blitz to pass his health care bill, I look at the spectacle with a certain sense of disgust, wondering what could have been if so much weren’t wasted on propping up our still ailing financial system.
Originally published at Credit Writedowns and reproduced here with the author’s permission.