Tim Geithner and Larry Summers Bad Boys

Today Newsweek Magazine released an article on the advice these men gave Obama. I've been saying all along give Larry's job to Paul:

There is still time Barry.

``(One problem this time around, lawyers say, is that virtually everyone was complicit in the subprime-mortgage scam.)''

``But the administration had a much bigger job than that. The worst economic downturn since the Great Depression hadn’t occurred just because of a simple crash. An entire era had overreached—the markets-are-always-good, government-is-always-bad zeitgeist that defined the post–Cold War period. The very idea of government regulation and oversight had become heresy during this epoch. Washington policymakers came to ignore the key differences between financial and other markets, differences that economists had known about for hundreds of years. Financial markets were always more imperfect than markets for goods and other services, more prone to manias and panics and susceptible to the pitfalls of imperfect information unequally shared by investors. Yet that critical distinction was lost in the whirlwind of deregulatory passion that followed the collapse of the Soviet Union and other command economies. Finance, completely unleashed, had come to dominate the real economy rather than serve its traditional role as a supplier of capital to goods and services. Venture capital transmogrified into speculative fever. Innovative ways of financing new business ideas evolved into vastly complex derivatives deals, like subprime-mortgage-backed securities, that were often little more than scams.''

``Obama was clearly not pushing very hard to be FDR or even his trust-busting relative Teddy Roosevelt. Now it looks like grim growth and unemployment numbers could extend all the way into 2012. Distracting himself with health care and other issues, Obama may have politically maneuvered himself out of the only major remedy that could bring unemployment down and growth up enough to assure his re-election: another giant fiscal stimulus. Today, after engendering Tea Party and centrist Democratic resistance to more government spending by pushing his health-care plan, the question is whether he has the political capital he may well need, in the end, to save his presidency. And after a two-year fight over financial reform, one other question still lingers: has Wall Street come out the big winner yet again?

Adapted from Capital Offense, by Michael Hirsh, a new book on the 30-year history behind the financial crash and ongoing economic crisis.''