The big banks are still too big to fail, controlling a larger share of the nation's deposits than before the crisis.
Restrictions on bank trading and derivatives miss the mark. Bad loans, not trading, took down Citigroup and Bank of America , and few effective restrictions or controls are imposed on mortgage-backed securities and similar financial instruments that permitted giant banks to disguise lousing lending decisions from unknowing investors.
The financial system is even more vulnerable to abuse and collapse than before.
The 8000 regional banks remain cash starved, because the President failed to use the TARP to create an analog to the Savings and Loan Crisis era Resolution Trust to purge balance sheets of toxic real estate loans and mortgage backed securities. Big Democratic contributors at Goldman Sachs , J.P. Morgan and other New York financial houses are making too much money working out those financial instruments, and the President acceded to their pleas for profits, against the best interests of jobs creation.
Now, small and medium sized businesses that rely on regional banks for credit can't expand and add employees. For ordinary working families, credit is scarcer and more expensive. Neither phenomenon is good for jobs creation.
Having failed to push a carbon tax through a voter wary Senate, the President is intent on punishing energy use by executive fiat through the Environmental Projection Agency.
The Council of Economic Advisorsclaims the $787 billion stimulus package saved or created about three million jobs but the Administration head count of jobs directly funded by the economic Recovery Act simply contracts the assumptions behind this analysis.
A good deal of the money was wasted or delayed private hiring, exacerbating unemployment. For example, subsidies to build windmills or green buildings displace other investments in new generating capacity and commercial space but don't add to the kilowatts purchased and office space rented two and three years from now. The economy gets the same investments-those just costs more and gets postponed.
The President managed to make much temporary stimulus spending permanent, creating trillion dollar deficits for many years to come and endangering the federal government's triple-A bond rating. Obama's response is to increase income and estate taxes, and Pelosi is floating a national sales tax. None of those create jobs.
Signs abound that the economic recovery is faltering under the weight of statism. Retails sales and new home construction are sinking, Obama's inept Treasury and housing bureaucrats can't stem foreclosure for two million families this year, and non-financial companies are sitting on nearly $2 trillion in cash reluctant to invest and hire.