Okay, so episode three gets into how Obama’s solution was “to rein in Wall Street” and to blame the “free market”. It continues the false narrative of a benevolent government vs. the evil financial institutions (again, there’s plenty of truth to the latter but none to the former), although the second half of the episode begins to drop that narrative to a large extent.
It relates how Obama brought in Tim Geithner as his Treasury Secretary to help “solve” the problem he helped create as head of the FRBNY (if you haven’t already, see previous episodes and my comments). He also brought on board former Treasury Secretary Larry Summers as his national economic adviser. The program shows economist Joseph Stiglitz pointing out the criticism that these are the same guys who caused the crisis, so how are they going to solve it? The show doesn’t ever really address that criticism, except to present the argument that these guys were necessary because “they knew what they were doing”. Uh, obviously not. Criticism of Geithner is limited to how bad he was at public speaking and how he gave a bad press conference in which he proposed “stress tests” for the banks.
There is an interesting segment of the program that largely breaks from the main propaganda theme (to the show’s credit) by showing how Obama called a meeting with the country’s top bankers. Obama in the meeting is described as nonconfrontational, and told the bankers that they had a public relations disaster that was turning into a political disaster. Frontline describes the “two faces” of Obama: public tough talk against Wall Street vs. private attempts to get the bankers on board with his bailout plan. It shows how the bankers who had taken billions in taxpayer dollars with no strings attached left the meeting taking away the message from Obama, “We’re all in this together.”
It then gets into public anger over the bailouts and how Obama responded by giving a speech on Wall Street where he talked about reforming Wall Street. He then turned his focus on passing health care reform and left bank reform to Congress, where “armies of lobbyists descended”.
The Congress passed the Wall Street Reform and Consumer Protection Act, a.k.a., the Dodd-Frank bill. Obama promised, “There will be no more tax-funded bailouts, period.” The show ends on the note of pointing out how “Too big to fail” is now institutionalized and how the government’s reaction will sow the seeds for the next, even worse crisis. The conclusion is: “This crisis really never ended.”
No kidding. I found this to be the most well balanced of the three episodes so far. Again, it does a much better job of casting a critical light on the government’s role than the previous two, although it couldn’t really do much to deny it or ignore it in this case, which may explain the acknowledgments of how Obama responded.