Treasury Secretary and self-proclaimed free-market ideologue Tim Geithner (1/29/09):

“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” he said.

President Barack Obama (4/14/09):

The reason we have not taken this step has nothing to do with any ideological or political judgment we made about government involvement in banks. It’s certainly not because of any concern we have for the management and shareholders whose actions helped to cause this mess. Rather it’s because we believe that pre-emptive government takeovers are likely to end up costing taxpayers even more in the end and because it’s more likely to undermine than to create confidence.

First, you have to wonder if Geithner’s “we” (nullus?) excludes Obama and/or Obama’s “we” excludes Geithner. Because these two statements are 100% mutually exclusive if we aren’t being subjected to administration Venn diagram games. On the merits, private shareholders pretended not to know about all the shenanigans that produced their returns, and management used every trick in the book to show paper gains rather than actual value. This is the system that Geithner thinks we need to preserve?

Taking Obama at his word that ideology played no part and that saving taxpayer money was the primary concern — though absurd when factoring in the pedigree of his economic team — doesn’t yield any credibility either. The trillions of dollars in cash, liquidity, and guarantees that the government has pledged and disbursed haven’t solved the problem, and mainstream estimates of the economy’s trajectory don’t look promising for the survival of most of the big banks. If these banks are going to be nationalized, they should have been nationalized already, otherwise the injections are just payoffs to the same management and shareholders that ruined the system in the first place. But Obama isn’t being honest here, and it’s not even a very thinly veiled lie. He has taken advice only from free marketeers advising more free market solutions. Summers and Geithner have long records of market evangelism and the deregulation that allowed the banks to cause this mess.

That some are taking Obama’s comment as a positive development (he does listen to us!) is a perfect example of how much Obama is able to get away with just because he’s not Bush.