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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?

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The moral dilemma in the financial crisis is oddly parallel to Obama's reluctant approach on the torture issue. The president bravely made public the sickening documents from the Bush administration that reveal how CIA and Justice Department officials rationalized their illegalities and authorized crimes against humanity. Yet the president said it would be wrong to prosecute (or even investigate) any of the CIA agents or military officers who committed these crimes. Likewise, we are told it would be wrong to punish the financial malefactors or look too closely into how they engineered the gross fraud and false valuations that destroyed trillions of dollars in American wealth. Let's not dwell on the past, the president says, let's look forward.

But everything Obama does now -- or fails to do -- becomes an inescapable precedent for the future, defining the true meaning of law and moral principle. The president's rationale on government-led torture sounds dangerously close to the line of defense invoked by Nazi war criminals at Nuremberg. We were only following orders. CIA barbarians are invited to hide behind that excuse.

So in a sense are the bankers from Wall Street. They were merely doing what the financial markets wanted and what the government allowed. Rescuing these players now, while declining to force fundamental structural changes on the banking system, would essentially ratify the bankers' arrogant beliefs. They are too important to fail. The government will never let it happen. Despite their destructive behavior, they will be allowed to remain in power and free to do it all again.

I do not doubt the president's good intentions, but if he is not vigilant, the "Obama precedent" could prove to be an ugly legacy. His name might someday be linked to wilful evasion of misdeeds and the degradation of law and moral principle. When great crimes are committed in the future by government or by powerful private interests, people in authority might decide to let them go by, citing the national interest and recalling how Barack Obama dealt with similar events.

William Greider is the author of, most recently, "The Soul of Capitalism" (Simon & Schuster).