Tuesday, January 19, 2010

Simon Johnson on What Obama Needs to Do Now

From BaselineScenario.com:
Think of it this way. If the Democrats lose badly in November – as seems likely, with their current weak and unconvincing narrative about the financial crisis and origins of our mass unemployment – then President Obama’s reelection campaign will be a long struggle to redefine the message, presumably towards finding something he has changed in a major way. In that context, strong attempted action against the power of big banks would appeal to the left, center, and even part of the right. Why wait for defeat in November before making this switch?

Run hard now, against the big banks. If they oppose the administration, this will make their power more blatant – and just strengthen the case for breaking them up. And if the biggest banks stay quiet, so much the better – go for even more sensible reform to constrain reckless risk-taking in the financial sector.

When you are running against opponents with bottomless resources, great hubris, and a profoundly anti-democratic bent, get them to speak early and often in as public a manner as possible. Dig up and publish everything there is to know about them. Review and forward the details of how JP Morgan was humbled over Northern Securities and how John D. Rockefeller was finally brought to account.

FDR’s favorite president was Andrew Jackson. The White House might like to read up on why – Jackson confronted, ran against, and ultimately defeated, the specter of concentrated financial power. President Obama needs to do the same.