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TheStreet Open House

Obama's Hypocrisy on Appointees: Opinion

NEW YORK ( TheStreet) -- President Barack Obama announced changes to his economic team Friday dashing any hopes of the "change" that candidate Barack Obama instilled on the 2008 campaign trail.

During a March 27, 2008, speech at New York's Cooper Union, Obama proclaimed:

"...instead of establishing a 21st century regulatory framework, we simply dismantled the old one -- aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight. ... A decade later, we have deregulated the financial services sector, and we face another crisis. A regulatory structure set up for banks in the 1930s needed to change because the nature of business has changed. But by the time the Glass-Steagall Act was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework."

Later that year, President-elect Obama named Larry Summers -- former Treasury Secretary during Bill Clinton's presidency -- to be the director of his National Economic Council.

Yes, the same Larry Summers who successfully advocated for the repeal of Glass-Steagall (the 1933 law designed to prevent "too-big-to-fail"), who, in congressional testimony, supported a ban of derivatives regulation and who has been the recipient of millions of dollars in compensation from troubled financial institutions.

Meet the New Boss, Same as the Old Boss

President Obama's newest director of the National Economic Council -- Gene Sperling -- served as a principal negotiator with Summers in finalizing the Financial Modernization Bill, the spawn of the "corrupt bargain" that candidate Obama described in 2008.

And like Summers, Sperling reaped millions in compensation from financial institutions, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford, according to Bloomberg.

So, President Obama's two go-to economists each had a hand in a "$300 million lobbying effort that drove deregulation ... facilitating mergers." These were mergers that created too-big-to-fail institutions that have left taxpayers on the hook for trillions and have paid millions to President Obama's go-to economists.

Mr. President, this smells like a corrupt bargain.

-- Written by John DeFeo in New York City

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