Obama's Bailout Statement: Not a Home Run, But a Solid Double

Barack Obama released a new statement [1] on the bailout proposal. IMHO, here's the best part:

"It is wholly unreasonable to expect that American taxpayers would or should hand this Administration or any Administration a $700 billion blank check with absolutely no oversight or conditions when a lack of oversight in Washington and on Wall Street is exactly what got us into this mess...The plan must include protections to ensure that taxpayer dollars are not used to further reward the bad behavior of irresponsible CEOs on Wall Street. There has been talk that some CEOs may refuse to cooperate with this plan if they have to forgo multi-million-dollar salaries. I cannot imagine a position more selfish and greedy at a time of national crisis. And I would like to speak directly to those CEOs right now: Do not make that mistake...This plan cannot be a welfare program for Wall Street executives."

That's some solid positioning, and we'll see if Obama backs up that call with a demand for airtight legislative language (remember, on executive pay restrictions, the devil will be in the details).

Obama also joins Sen. Bernie Sanders as one of the few people who's talking about paying for this with some kind of tax. He said that "after the economy recovers, we should institute a Financial Stability Fee on the entire financial services industry to repay any losses to the American people." That's a solid position - one that echoes economist Dean Baker's speculator tax proposal [2]. My only fear is the timing: saying that the tax should come at a future time is a little bit of passing the buck. In the future, there won't be the imperative and political pressure generated by the immediate crisis, meaning it will be easier for Obama to ignore and Congress to reject. I'm not saying the timing Obama is proposing is a deliberate strategy to appease his Wall Street donors (though it's certainly possible) - I'm just saying that for whatever reason he's proposing such timing, it imperils the underlying (good) idea.

All in all, though, Obama's statement is very good. It's not a home run, but its a solid double - which is better than I expected from Wall Street's $9 million man [3] and the new best friend of Bob Rubin.