Pundits demand action on banks as Obama and Geithner ‘dither’

Tuesday, March 10. They are faced with what many people have called the biggest economic crisis in history. But, according to the pundits, President Barack Obama and his Treasury Secretary Tim Geithner are not handling it very well at all. The accusations levelled against the pair range from "dithering" to not having the economic nous to dig America out of the hole it is in.

Writing for the Guardian, Michael Tomasky says that Obama and Geithner have had long enough to impress American voters, and failed. "We're about seven weeks into this administration now," says Tomasky. "That's just seven weeks, but it's time enough for Geithner – and Obama himself of course – to have delivered more of a sense of direction on where they're headed on the banks."

It may be, says Tomasky, that Obama is frightened of generating negative headlines like 'Obama to nationalise the banks', but he needs to take decisive action. "Obama's doing a lot of good in a lot of a hurry in other areas. But this area is, uh, pretty important, and he and his Treasury Secretary aren't being anywhere near forceful enough."

In the New York Times, Paul Krugman feels that for all his talk of taking action because of the dangers of inaction, Obama is yet to put his money where his mouth is. "Among people I talk to there’s a growing sense of frustration, even panic, over Mr Obama's failure to match his words with deeds. The reality is that when it comes to dealing with the banks, the Obama administration is dithering."

Krugman goes on: "Officials... don't want to face up to the dire state of major financial institutions because it’s very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalisation is still, apparently, considered unthinkable."

Writing for the Nieman Watchdog, Dan Froomkin reports three questions that an oversight panel appointed by Congress to watch over the Troubled Asset Relief Programme would like answers to. First, Geithner needs to explain what he feels the reasons for the financial crisis are and how he intends to fix them. Second, he needs to say how he intends to recapitalice the banking system. And third, how much debt is it fair to lumber the American consumer with? "Geithner should be able to answer these questions," says Froomkin. "If he can't, we're in even bigger trouble than we thought."

Writing for the Business Insider, Henry Blodget says that Obama should take one dramatic course of action immediately: Geithner's got to go. "We don't mean to sound impatient, but we've seen enough. The country is in the middle of the worst financial crisis in 75 years, and the second-most-important person in charge clearly isn't the right man for the job."

On the Huffington Post, Phil Bronstein reckons that it is only thanks to Obama's lingering popularity that the failure to deal with the banking crisis hasn't led to rioting on the streets. "People like him. The big majority wants him to succeed. So how can they possibly riot against someone they're rooting for? I don't know how long that line will hold..."

FIRST POSTED MARCH 10, 2009