[F]inance is global in a way it wasn’t during FDR’s day, which means the Obama administration and Congress can’t simply impose new regulations or Glass-Steagall restrictions such as the “two tier” system Paul Volcker boldly proposed the other day, getting way ahead of the president he’s advising. If this is done unilaterally, finance could simply decide to depart our shores. So Geithner has to fly off to the G20 and wait his turn to speak.
No, Obama does not resemble FDR at the midway point of his first 100 days. There are some legitimate beefs with what he’s done and how he’s done it. “Given that they had two and a half months to get it ready, the first thing should have been kind of a 10-point plan articulated two hours after the inauguration,” says Johnson. “Summers with Geithner at his side. Ten principles, details to follow. Then shut down a couple of big banks—there was plenty of time to do an orderly restructuring. And the last thing is, don’t let Capitol Hill do the stimulus program. Now the money’s going out too slowly. It’s designed like a time release for reelection campaigns in 2010.” Johnson also says the mortgage-restructuring proposal should have included a reduction in principal rather than just interest rates.