While it didn’t end up working, America watched as President Obama tried to make it work. Which meant a lot. He reached across the aisle, as they say. The problem is no one reached back.

But the President responded. He took decisive action in the face of diminishing bipartisan returns, coming out strongly against the GOP for its stall tactics week before last, then harnessing his popularity to take his case to the people, first in Indiana, then Florida, then Illinois. And it worked. A piece of legislation of unprecedented scope and scale, is now on the President’s desk.

Not bad for only being in office a couple of weeks. But the linchpin is that, unlike Bill Clinton, Obama has been able to appear bipartisan in intention and sentiment during this process, even as he failed actually to prompt any notable aisle-stepping.

Still, many believe that the President’s efforts to go beyond party lines could come at the expense of campaign promises to usher in real change. The President’s choice of administration officials is a popular target. Frank Rich, for example, has been beating up on Treasury Secretary Tim Geithner who not only failed to pay his taxes, but also “in his oversight of teetering Wall Street institutions.”

I don’t blame Giethner for what happened on Wall Street in 2008, but his unresolved tax issues were disappointing. The real problem with Geithner came this week with what he said, didn’t say and how he didn’t say it, during his announcement of the financial recovery plan. It was totally devoid of detail or certainty. And the manner in which Geithner spoke–closed posture, scripted, and otherwise ill-at-ease–inspired little confidence. In fact, it made me nervous.

Additionally, there doesn’t appear to be much daylight between Secretary Paulson’s “plan” and Geithner’s. As reported by the Washington Post:

Many of the specific policies Geithner offered were tweaks, adjustments or continuations of Paulson’s strategy. And the more novel elements of the Geithner plan — the creation of an entity with public and private money to buy up bad assets from banks, a “stress test” of 20 or so of the nation’s largest banks, and $50 billion to prevent foreclosures — came with so few details about how they would work that it contributed to the very public anxiety and investor uncertainty that Geithner criticized.

I’m not even sure it’s sensible to say Geithner’s plan is a “continuation” of Paulson’s because Paulson, like John McCain during the 2008 election, never had a plan. Rather, he did a lot of lurching around in response to the crisis–first we were going to buy the bad assets but then, no, that was too risky; we’d have to invest wisely for the American people, let’s inject cash; but then that wasn’t working, so Paulson reconsidered. And so forth.

Here’s the fact–unless we want to continue to bail-out large companies, on an ad-hoc basis, one by one, the bad assets of a select few large banks must be purchased by the US government. Cash injections haven’t worked and won’t work because they miss the mark; the bad assets remain and, like a 300 lb. ball and chain, continue to weigh down the banking institutions, discouraging them from doing the lending that’s required to revivify the economy.

People like to compare the current financial mess to the Great Depression, but it’s completely and categorically different in its scope and specific nature. Alan Greenspan is scratching his head, and Government is too. No one really knows what is happening, or what to do. And that is ultimately why Geithner’s plan was pitched at such a general level. Because the Obama team knows Geithner will probably need some room within which to lurch from time to time, and they don’t want to tie themselves down just yet.

And we musn’t forget Geithner’s main squeeze, Larry Summers, with whom so many Progressives seem to have a problem. Appointed as head of the White House’s National Economic Council, Summers is no angel. As Clinton’s Treasury Secretary he was a fierce deregulator who ushered in the repeal of Glass-Steagall at the tail end of the Clinton administration, paving the way for mega- one-stop-shopping bank conglomerates like Citi and AIG to become too big to fail, too complex to regulate and too risky to tolerate. (Summers was also fired from Harvard University for claiming men were better at math than women.)

But, most agree, Summers is incredibly bright and he has the right experience for the job. Shouldn’t we hold our aspersions in reserve until Summers makes a policy error or other error while serving in an official capacity? We elected Barack Obama because of his judgment. It’s time to trust it.

January 20, 2009: The day after the Martin Luther King Holiday, over 40 years after Martin Luther King suggested that within 25 years there would be a black president, 147 years after the declaration of the emancipation of slaves, 232 years after the creation of a nation that promised equality for all, but in fact denied this right to women, people of African descent, Native Americans, and others who did not belong to or bore the fabric of the “founding fathers.”

There was redemption on January 20 for all Americans, but in particular for European Americans and African Americans. Barack H. Obama was elected president of the United States of America—the land which is now my home. Nancy Pelosi and Diane Feinstein, two accomplished women, flanked President Obama. We have the most multi-ethnic cabinet ever–eleven whites, four African-Americans, a Hispanic and two Asians. The “Si Se Puede” movement became Obama’s “Yes We Can” movement.

This country–is a changin!

Irony and Sadness:

Yet, after a morning of no E-mail as all eyes were on Washington, I got the first post inauguration message sobering my ecstatic state: “ People of Color need your support-help keep the legal profession desegregated”—an urgent message from the Equal Justice Society. In California, there is a continuing effort to dismantle what remains of affirmative action by using social science research to show how affirmative action has been detrimental to people of color in the legal profession.

As a low-income, Latina immigrant who was often told (not by my family) that the best that I could hope for would be to be a secretary (not disparaging the occupation), affirmative action offered the only hope. It allowed me to show that despite the language barriers, the discrimination and challenges I faced based on my ethnicity and gender, I could reach my childhood dream of joining the ranks of attorneys who had used this venerable profession to seek justice and equality. It also provided me with a doorway out of poverty. Although I look forward to the day where affirmative action will no longer be necessary, we are not there yet. Despite President Obama’s victory and the promise that it represents, children of low-income families and children of color do not yet have equal opportunity. Our schools, neighborhoods, housing, health care are not equal.

During the last few weeks, Gaza was sacked and rendered a modern day Dresden; all an effort to beat the swearing in of President Obama. As we celebrated, more than 1,300 Palestinians had died; with their homes and schools destroyed. Without electricity, Palestinians were unable to watch the transition of power that is, disturbingly, unlikely to solve this intractable humanitarian crisis.

My happiness was also dampened by a realization— were have I been? — that capitalism has truly triumphed. On January 20, I was reminded of another equally joyous time –the election of Salvador Allende to the Chilean presidency. I remembered the hope that I had as a youth that at long last the world would be moving to a more just and equal society that would provide the economic security that is key to our basic humanity. We will be coming out of eight years of one of the worst incarnations and moving forward to what I hope will be perhaps a more benign and humane form of capitalism.

Hope:

President Obama is almost 100% right. We have the “responsibility” to ourselves and to the world to keep moving the arc of history.

We need to vanquish the crime of torture from our land and ensure that we not trade “safety” for our “values.” Gunatanamo will close. Unjustified surveillance of our citizens must end. We must ensure that the imperial presidency will not return.

We must keep our pledge “[t]o the people of poor nations, […] to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds.” American and international corporations’ depletion of the world’s resources for our benefit must end. We must return some of what we have taken.

We need to communicate to the “Muslim world, [that] we seek a new way forward, based on mutual interest and mutual respect.” Immoral, religious and or plundering wars must end and new ones not started. Gaza, without the destruction of Israel, must be rebuilt and be set free from the tyranny of walls, barbed wires, and bombs.

To Americans who have been battered by an “… economy [that] is badly weakened, a consequence of greed”… and are facing a “raging storm,” let’s restore our government’s capacity to “help[s] families find jobs at a decent wage, care they can afford, a retirement that is dignified,” housing that is affordable, neighborhoods that are healthy and safe, and provide an education to ensure prosperity to future generations.

“This is the meaning of our liberty and our creed — why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.” Let’s make equality a reality—and make sure it extends to our gay/lesbian/transgender sisters and brothers.

Let’s help President Obama fulfill his oath—our oath. Let’s not be afraid of finding our “common humanity.” We must be vigilant and persistent in our drive to maintain freedom and to continue to move towards the social and economic justice waiting for us at the end of that arc of history, that rainbow arc.

Laughable really. We were rounding up $1.6 billion, like it was nothing! It speaks volumes about this bizarre moment in our financial history. A moment in which an ungodly $350 billion has been laid at the doorstep of the financial industry without any accountability or oversight (with an additional $350 billion close on its heels), and a mind-blowing $790 billion economic stimulus plan (trimmed down from $838 billion) is inching closer and closer to the President’s desk.

But lest we forget, last year the market for credits default swaps grew to be in excess of $60 trillion, making those dinky hundreds of billions in bail-out money look like drops in the bucket compared to the problems we face. Through Feb. 10, the government has made commitments of nearly $8.8 trillion and spent $2 trillion–this, at a time when the national debt is nearing $11 trillion.

It’s government’s Trillion Dollar Era, folks.

But are we responding to private excess with governmental excess?

Tuesday, after the Senate had finally reached a deal on the colossal stimulus, and not a moment sooner, the latest round of additional billions and trillions were announced. They came as part of the financial recovery plan trotted out by Treasury Secretary Geithner. The new proposal could tap as much as $2 trillion from the Treasury, private investors and the Federal Reserve, in addition to the $350 billion remaining in the Treasury’s TARP money, which will also be spent.

With a purported overarching goal of unfreezing the credit markets, the new plan has three parts: First, a Public Private Investment Fund, jointly run by the Treasury and the Federal Reserve. The already renowned “bad bank” will start with as much as $500 billion, and grow to $1 trillion. It will be funded by both private investors and tax payer dollars.

Second, additional capital infusions into banks using the $350 billion that’s remaining in TARP.

And third, an expanded loan program to help finance consumer loans, including student, car loans and credit card debt, that could reach $1 trillion.

Wall Street’s response to Geithner’s speech was pessimistic. The markets plunged, especially in the banking sector which investors apparently hoped would get more or that something would be different in Geithner’s plan. Bank of America was hit particularly hard after Geithner’s stand-up falling 11%, while Wells Fargo fell 6.5%.

The problem is that Geithner’s speech was devoid of specifics. There was a lot of broad outlining but not a lot of detail. And the manner in which Geithner spoke–closed posture, scripted, and otherwise ill-at-ease–didn’t inspire much confidence. In fact, it made me nervous. There was also a timing issue. Did they have to roll out this plan now? While every one’s still trying to wrap their heads around the President’s $838 billion stimulus package?

One thing was clear however: Under the plan, there will be trillions spent in addition to what’s already being spent. The question on every one’s mind is whether we’re throwing good money after bad. To be sure, much of the money will again be going straight to the banks and, other than the executive pay orders issued by the President last week, no additional oversight measures are yet in place.

In other words, there doesn’t appear to be much daylight between Secretary Paulson’s “plan” and Geithner’s. As reported by the Washington Post:

Many of the specific policies Geithner offered were tweaks, adjustments or continuations of Paulson’s strategy. And the more novel elements of the Geithner plan — the creation of an entity with public and private money to buy up bad assets from banks, a “stress test” of 20 or so of the nation’s largest banks, and $50 billion to prevent foreclosures — came with so few details about how they would work that it contributed to the very public anxiety and investor uncertainty that Geithner criticized.

This shouldn’t be terribly surprising. Geithner and Paulson were arm-in-arm during the initial government response in Fall 2006 and there’s no reason to believe they are not still. We should also be concerned with the notion of a “Public-Private” fund. Just what alliances with private corporations will this fund entail? Who from the private sector will be investing? Might one investor be Goldman Sachs, from which Geithner’s Chief of Staff, Mark Patterson, hails (along with his chum Hank Paulson), and who Geithner is himself rather cozy with, having been the mentee of at least a few former Goldman executives, including embattled former-Merrill CEO (and ex-Goldman Co-President) John Thain? Do we want corporate America contributing to the decision-making on our financial recovery? I suppose that at the rate we’re spending (i.e., borrowing) money we may not have a choice.

Remember the Saving & Loan scandal in the 1980s? S&L’s or “thrifts” emerged during the Civil War and were originally confined to taking savings deposits and making mortgage loans. They became highly regulated during the New Deal, but policies began to change at the tail end of the Carter Administration when interest rate caps were lifted and the federal government started providing more comprehensive insurance against losses. Still, by the time Carter left office 3,300 out of the 3,800 S&Ls operating in the United States were losing money.

Signed into law by Ronald Reagan in 1982, the Garn-St. Germain Depository Institutions Act deregulated S&L’s even further allowing them to make commercial loans, issue credit cards, and take ownership positions in the real estate and other projects to which they made loans. The Act also made it easier to get a federal charter and therefore an implicit government guarantee. Meanwhile, net worth requirements were made lax and rarely enforced. These deregulatory measures paved the way to excess and, in the late 1980s, S&L’s began to fall off, one by one. Soon it became clear that the entire S&L industry had evolved into a house-of-cards, resulting in the failure of 747 banks, an unprecedented financial catastrophe. The basic story line is not dissimilar from the story of our current financial meltdown. And in both instances government, having essentially caused the crisis at hand, stepped in to help clean up the mess.

What was the tax payer tab for bailing out of the S&L’s in the 1980s? $124.6 billion over the course of nearly a decade.

Those were the days.