From Blue Crab Boulevard we see the first subtle signs of panic from the Obama administration over the likely repercussions of letting Congressional Democrats attempt to scapegoat Wall Street for their own sins.
Obama Seeks to Soften the Punitive Legislation
WASHINGTON — The Obama administration wants to soften the impact of bills speeding through Congress that would impose heavy new taxes on Wall Street bonuses. But some potential allies in the Senate are reluctant to cooperate, fearing the political consequences of watering down the legislation.
Financial-industry officials launched a campaign Friday to fight back but are finding their hands tied: Anti-Wall Street sentiment following the American International Group Inc. bonus payouts is making it difficult to reach once-friendly lawmakers to make their case. Key senators and their staffers, nervous about appearing to support the industry, are refusing all meetings, and, in some cases, turning away phone calls. “Unless you have a pitchfork and a noose nobody’s listening to you” on Capitol Hill, said one financial lobbyist.
The White House has yet to publicly criticize the bonus tax proposals. But administration officials say privately they are concerned the House and Senate bills could lead to an exodus of employees or whole companies from the Troubled Asset Relief Program, known as TARP, as well as other government-sponsored financial rescue efforts.
My first thought when I read that was this classic animated video sequence of the Sorcerer’s Apprentice from Fantasia:
It’s all there, from the “meddling with forces that are only dimly understood” to the “slacking off after immediate goals are met” to “attempts to fix the long-term problem only makes it worse.” Unfortunately, we have yet to get to the “Wizard Ex Machina swoops in and fixes the problem” part… assuming that we ever do. After all, Disney was making fiction, and this is real life.
If the Obama administration would like some advice, I have some: stop trying to sneak around on this. This “stimulus” has been an unmitigated disaster from its conception. The administration needs to forthrightly admit to that, quit looking for outside elements to blame for its own mistakes, and stop making things worse. Doing all of this will, of course, be very politically painful, which is why this advice is almost certain to be ignored even if by some highly improbable chance it comes to the President’s attention.
None the less, it’s still good advice.
Crossposted to Moe Lane.