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Testicular Politics: Obama Is Getting Punked By the Big Dogs of Banking, Does He Have the Balls to Do What's Right?

What we are witnessing is a high-stakes melodrama of glandular politics. Will Obama roll over or fight back?

The big dogs of banking and finance are playing a rough game of bump-and-run with our president, trying to knock him off balance and demonstrate their dominance. The best names in Wall Street -- Goldman Sachs, JPMorgan Chase -- pumped out happy talk about quarterly earnings, then announced that they intend to give back the government's money (more than $50 billion, if counted honestly). The crisis, they announce, is over for them. They want to be free of official meddling in their private affairs. The arrogance is breathtaking, even for Wall Street bankers.

Forget the financial numbers. What we are witnessing is a high-stakes melodrama of glandular politics. This rival power center, though gravely weakened, is contesting for control with the president. Think of dogs circling one another to establish who will be leader of the pack. For three decades, the Wall Street guys in good suits have ruled the economy, demanding deference from the political system and from corporate managements, too. Those who failed to follow them were punished, either through stock prices or election financing. Despite their catastrophic failure, the surviving bankers and financiers are trying to hold on to their thrones.

For the last couple of weeks, they have poked the kid in the chest and mocked his economic advisors with condescending gestures. Jamie Dimon of the Morgan bank handed Treasury Secretary Geithner a fake check for $25 billion. They threw complicating wrenches into the government's financial rescue plan. Their essential message, crudely colloquial, was intended for Barack Obama : "You don't have the balls to take charge of us."

The question is: Are they right? Obama seems cowed by their bluster. He certainly looks reluctant to take them on in a public way or refute their version of reality. This president wants to govern through public-spirited cooperation. The financial titans play hardball in return. I say "seems" because we do not yet know about Obama and how he will resolve this mess. The administration has been stalling action on the troubled banks, as if it believes in its own wishful forecasts about an early recovery for the economy. The bankers trumped him by announcing, hey, things are already better for us. So back off.

The bankers think they have the president cornered. His rescue plan cannot possibly succeed without much more money -- hundreds of billions more -- that Congress will be extremely reluctant to provide (Obama hasn't yet had the nerve to ask for it). The bankers' offer to return their welfare checks is a cute gesture, but a bluff. They know Obama's government is committed to save them, whatever it costs. As usual, the big dogs want to have it both ways -- take the public's money but promise nothing in return.

Roughly speaking, that has been Obama's posture, too. He acts as though the old order must be restored with public money, but without forceful government direction. He can call their bluff if he has the courage -- shut down a couple of big banks, take control of the system -- and the public would cheer. During the campaign, Obama demonstrated he is a great teacher -- his political vision changed the country. But we do not yet know if he is a confident political leader willing to use his power against formidable adversaries in order to get his way. Every potential rival is now taking his measure. Weakness would doom him.

The financial crisis poses the first great moral dilemma of the Obama presidency. Sometime in the next few months, he will be compelled to choose between his technocratic inclinations -- rescuing certain financial institutions deemed "too big to fail" -- and the obvious moral wrongness of his policy of rewarding the very players who caused our national disaster. The broad public does not doubt that this is morally wrong. I saw a Zogby opinion poll the other day that said only 6 percent of the public supports the financial bailouts. Obama is on the wrong side of that bipartisan consensus.