The fix is in

One of the follies of the Bush administration was the notion that the class of money-shufflers who got us into the credit crunch could somehow be trusted to get us out of it.  Which is what makes the Obama administration such a breath of fresh — oh, wait, never mind.

MSNBC reported last night that Obama is already getting advice from Ben Bernanke.  That ought to make you feel warm and fuzzy right there.

But wait, there's more!  As of this writing it appears Lawrence Summers is the leading candidate for Treasury Secretary.  As in, the guy who was Clinton's last Treasury Secretary.  So much for the promise of "no retreads" in an Obama administration.

I mean, Larry Summers?!  That's really in-your-face, on any number of levels.  PC-liberal types are still up in arms over his remarks about the size of women's brains when he was running Harvard, and the general consensus in Cambridge was that he ran Harvard with all the people skills of Attila the Hun.

More to the point is this: Summers was among those present at the creation of the biggest credit bubble of all time — when the Glass-Stegall Act was repealed in 1999.  As I've written before, tearing down the wall of separation between commercial banking and investment banking is a good idea in principle.  But written between the lines of the replacement legislation was a guarantee of government bailout if big leveraged bets went awry — one reason that the ultimate deregulator, Ron Paul, voted against it.

But hey, it'll make for a nigh-seamless transition at Treasury — Paulson to Summers to national bankruptcy.*

And if it's not Summers, the other candidates whose names have been floated will substitute just fine.  Tim Geithner?  The New York Fed chief was the architect of the JPMorgan-Bear Stearns deal, and has quietly kept his hand in every bailout and associated scheme since then.  New Jersey Sen. Jon Corzine?  Ex-Goldman Sachs.  Nuff said.

Presidents might change.  Taxes go down, taxes go up.  But the criminal finance class always makes sure to provide for itself first.

*Speaking of national bankruptcy, what sort of omen is it that the book version of I.O.U.S.A. was Amazon's top seller Tuesday night as Obama snagged his victory?

The Daily Reckoning