There is a part of me that wants to defend this kind of thing. Who else did people think would be in charge of economic policy? As even Taibbi notes, most of those mentioned were not only executives at Citigroup; they were also veterans of the Clinton Administration. While it is true the Clinton Administration was the period of time during which the basis for the current crisis was laid, most especially the '99 repeal of Glass-Steagall, although other regulatory provisions on banking, investment, and financial products in general were weakened during the Clinton years as well. It should also be noted it wasn't Bill Clinton or Bob Rubin who repealed Glass-Steagall's provision on separating investment from commercial banking, but Congress, with former Texas Republican Phil Gramm taking the lead.
Yet, there really is no defense for Obama's actions. He not only had people already in place who had sound policy recommendations. There were various advisers, formal and informal, who were making all sorts of recommendations and proposals that could have benefited the newly-victorious President-elect. Instead, he made a crucial error, thinking that people with experience in both government and industry at the highest levels were more capable of dealing with the crisis then those who did not have the experience. That there were serious questions regarding the role, and even responsibility, senior banking executives played not only in setting the housing bubble - and its effect upon the economy in general - in motion; having these same people turn around and devise a plan that, in essence, saved them from the worst effects of their own actions is unconscionable.
Taibbi begins his piece asking the following questions:
Is [Obama] just a rookie in the political big leagues, hoodwinked by Beltway old-timers? Or is the vacillating, ineffectual servant of banking interests we've been seeing on TV this fall who Obama really is?
Whether the source of Obama's decision to look for help from the very people who brought about our current catastrophe lies in inexperience or naivete is important, but also irrelevant. My own guess is that, in reality, it was a deliberate decision on his part, done in the belief that "these people know best", even if actual evidence shows they really don't know anything at all. Yet, it is important to ask the question, because it goes to the heart of how Obama will govern for the rest of his time in office, and how we evaluate his performance.
So, deliberate choice? Ignorance based either in inexperience or exuberance? What do you think?
