Obama, Wall Street, & Public Perception

The Necessity of Choosing Sides

The guerilla wins if he does not lose. The conventional army loses if it does not win.

--Henry Kissinger

What does Kissinger's famous maxim about guerilla warfare have to do with Barack Obama and Wall Street?

That in every great engagement, there are always two battles being waged: the real one, and the one over people's perceptions.

It's this latter war that Barack Obama is losing badly vis a vis Wall Street (although the real war -- to tame and hold Wall Street to account -- ain't going so great, either).

The New York Times' Frank Rich cuts to the quick of Obama's problem:

Since Obama has neither aggressively pursued the crash’s con men nor compellingly explained how they gamed the system, he sometimes looks as if he’s fronting for the industry even if he’s not. Voters are not only failing to give the White House credit for its economic successes but finding it guilty of transgressions it didn’t commit.

--Frank Rich, "What Happened to Change We Can Believe In?"; The New York Times (10/24/2010)

Exactly.

President Obama, time to (re)read your Machiavelli (and Kissinger).

P.S.: best line from "Inside Job," reviewed on this blog previously: asked why there’s been no systematic investigation of the 2008 crash, economist Nouriel Roubini answers: “because then you’d find the culprits.” Graphic (above) from NY Times.

Required Reading

"Who's Who" Discussion of Financial Crisis

Best read of the weekend: a roundtable called "The Crisis and How to Deal With It."

Participants are a "who's who" of finance and public policy: Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, and George Soros.

Warning: their (quite sober) analyses are not for the easily spooked or faint of heart. Here's an excerpt from Nouriel Roubini:

There are only a few ways of resolving a [huge national] debt problem: either you default on it as countries like Argentina did; you use the inflation tax to wipe out the real value of the debt; or you have to raise taxes and cut government spending.

As depressing as the mess, its causes, and likely solutions are . . it's encouraging that someone out there has got a handle on what to do about it.

Now, if only they were in charge . .