The Buck Stops With Obama on Tepid Financial Reform [View all]

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The Buck Stops With Obama on Tepid Financial Reform
by Jesse Eisinger
ProPublica, May 21, 2014, 12 p.m.

What are we talking about when we talk about Timothy F. Geithner's new book? President Obama.

The former Treasury secretary's new book, "Stress Test," has stirred up the old debates and anger: How the bailout was overly generous to the banks and bankers; how the failures on housing were inexcusable; how the financial regulatory reform was inadequate. These were Mr. Geithner's failures, but they were more deeply Mr. Obama's. The flaws we thought we were seeing during Mr. Geithner's tenure turn out to have replicated themselves in other Obama departments. And they have persisted after Mr. Geithner left. Why, it's almost as if the Treasury secretary wasn't the one making decisions and setting the tone after all.

President Obama's appointees, Eric H. Holder Jr. at the Department of Justice and Mary L. Schapiro at the Securities and Exchange Commission, oversaw the inadequate enforcement response to the crisis. Mr. Obama reappointed Ben S. Bernanke, who focused on monetary policy and didn't push for more aggressive regulatory and financial reform. Mr. Geithner didn't run those shops.

And Geithner-like characters keep popping up, while appointees who are unlike the president get ousted. At the Federal Deposit Insurance Corporation, the outspoken Sheila Bair was replaced with the low-profile Martin J. Gruenberg. Gary S. Gensler, the tough chairman of the Commodity Futures Trading Commission, didn't get nominated to a second term. In his place, we got a Treasury official whose cipher of a record was almost treated as a virtue by the Obama administration. The new head of the S.E.C., Mary Jo White, has been disappointing on regulatory questions.