There is much to be thankful for this holiday, including the fact that we live in a country that has been remarkably good-natured, generous and pragmatic in the face of a nasty economic crisis. The rates of unemployment and under-employment have already hit a combined 17 percent. Household wealth has been significantly diminished. Reluctantly, we agreed to take on more public debt to finance a massive bailout of a financial sector that badly let us down. We stepped up our household savings and embraced the new frugality.
What really sticks in our craw, however, is that while most of the country is hunkered down, Wall Street continues to feast on a bounty of trading profits. You'd expect that a new liberal Democratic president would find a way to give voice to this populist outrage and constructively channel this public anger. But too often, the response from the administration has been to try to convince us that there's little we can do, or should do, to ensure that the economic harvest is more equitably distributed. Now, the White House and congressional leaders find themselves scrambling to get ahead of a growing political backlash that threatens to upend their carefully calibrated agenda, not to mention their political fortunes.
Fairly or unfairly, the official who has come to personify this let-them-eat-stuffing attitude is Treasury Secretary Tim Geithner, who can't seem to decide whose side of the buffet table he's really on. It was Geithner who, at the height of the financial crisis last year, was able to best articulate the unpleasant truth that we could save the financial system or we could punish the banks but we couldn't do both at the same time. But now that the system has been saved, he seems to have lost his appetite for retribution.
A telling moment came at the meeting of finance ministers in St. Andrews, Scotland, earlier this month, when Geithner gave a back-of-the-hand to the idea of a global tax on financial transactions as a way of raising money for economic stabilization while also discouraging high-volume, short-term speculation. In the past, the problem with this idea was that if any country imposed such a tax, trading would simply move somewhere else. But with most industrial countries now willing to act in concert, a transaction tax could have been a viable option -- until, that is, Geithner dismissed it as a desperate political gambit by an unpopular British prime minister and vowed that the United States would never go along.
By itself, perhaps, the incident could have been written off as a difference of opinion about means rather than ends. But it seemed to be of a piece with Geithner's determination to avoid upsetting markets or upending the Wall Street order.
This was the same Geithner, after all, who has pushed not only to preserve but expand the powers of a Federal Reserve that had been the regulatory hand-maiden of Wall Street banks and investment houses.
It was Geithner and the Treasury that proposed to enshrine the doctrine of "too big to fail" into law, rejecting calls to break up the biggest banks and designating certain institutions for this special status. Treasury also opposed language that would have required creditors and counterparties of these institutions to take losses if some form of government receivership were required.
And it has been Geithner who, for all his talk about reforming the structure of Wall Street pay, has never been able to bring himself to declare the simple truth that Wall Street pay is absurdly high.
It's fair to say that Geithner's credibility has been so tarnished in the eyes of Congress and the public that President Obama will now have to devote more personal attention to these issues.
Obama could start by instructing the Justice Department to launch an antitrust inquiry to determine why Wall Street continues to earn the extravagant profits from which the bonuses are derived.
The president could press Congress to close the tax loophole that allows managers of hedge funds and private-equity funds to pay lower tax rates than their secretaries. He could ask the country's largest pension plans, mutual funds and endowments to come up with voluntary pay standards for their own managers and traders, but also for any banks or money managers they do business with.
And Obama could ask the Group of 20 to put the transaction tax back on the agenda, and vow to use the $50 billion a year in revenue that it would generate here to finance the much-needed transportation infrastructure improvements that the president himself has proposed.
In truth, none of this will create the jobs the country now desperately needs. But governing is as much about symbolism as it is about substance. Only by taking steps to assure the nation that the economy will no longer be rigged in Wall Street's favor can the president regain the political high ground and push through a new jobs agenda.
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