Crisis diverted

Barry Ritholtz says the health care issue pushed financial reform off the agenda, and to Guambat's expectations, we'll likely not get either because of it.

The massive taxpayer wealth transfer to inept, corrupt, incompetent bankers has created huge resentment amongst the populace — regardless of political affiliation.

As Rahm Emmanuel likes to say, one should “never waste a crisis” — and the White House has done just that.

There was a narrow window to effect a full regulatory reform of Wall Street, the Banking Industry and other causes of the collapse. Instead, the White House tacked in a different direction, pursuing health care reform.

This was an enormous miscalculation.

What we got instead, was the usual lobbying efforts by the finance industry. They own Congress, lock stock and barrel, and they throttled Financial Reform. It did not help that the Obama economic team is filled with defenders of the Status Quo — primarily Summers, but it appears Geithner also — the dynamic duo that fiddled while the economy burned.

This was a colossal blunder. Passing reform legislation successfully would have fulfilled the campaign promise of “Change;” it would have created legislative momentum. It could have provided a healthy outlet for the Tea Party anger and the raucous Town Hall meetings.

Instead, we have a White House that appears adrift, and the most importantly, may very well have missed the best chance to clean up Wall Street in five generations.

Guambat recently posted a story wherein it was noted, "For Wall Street, the longer it takes to get legislation passed the better."

Guambat wonders just how much of the diversion from Wall Street issues in pursuit of the health or high water one might be attributed to doing a deal with Hilary to keep her quietly onside.

Guambat hasn't quoted/linked to Barry in a while, but still is a regular reader of Barry's blog.