However, I cannot agree with the conspiracy theory at their core. It simply does not match with my (admittedly limited) sense of how things work in the world.
The establishment is the establishment, especially in the senate. The majority of them are not, and never were, very liberal. They were, for the most part, elected during the period of backlash against the center-left policies of the New Deal, and their beliefs, attitudes, and behavior reflects that. Defensive caution, lack of fighting spirit, and centrist (at best) policies and positions do not require a conspiracy theory to explain - they are acquired habits of the past 30 years. There is a marked difference between many of the people elected in the past 5-6 years with those elected 10-20 years ago.
Obama is marred by this as well, much as it's easy for people to have believed from his speeches that he wasn't.
You keep insisting that financial super-regulation would have been a slam dunk a year ago. I don't agree, and never have. The learned and accepted narratives, frames, and intellectual habits were too strong for that to ever be possible, just as I cannot imagine it to be possible now.
The only solution is constant electoral activism to replace the old with the new. Actual experience with the process of democracy, and knowledge built of governance from such activism, is worth more than a thousand hours of Rush.
I am equally concerned that not only was this bad policy from a public policy perspective but that propping up the current system is basically untenable and that so doing is just making the next crisis more severe. This crisis first emerged only seven years after the dot-com bubble burst and the next crisis, most likely fueled by an explosively dangerous dollar carry trade will almost certainly occur within the next seven years, which, were he planning on a two term presidency, should have concerned him.
This was and is a matter of self preservation for both his administration and the country. The structure of finance is vital to the economy and the economy is the bedrock of the society. Obama is smart enough to grasp that. I fault him for not even seriously examining the structural problem with finance. He asked Volker to show up for photo-ops but didn't listen to him. He had a duty of care to bring in people like Simon Johnson, Elizabeth Warren and Sheila Bair, draw out their concerns and seriously consider his options. He didn't, so far as I can see. Volker has had to go public in his dissent. It is one thing to try and fail. It is entirely another to oppose even the effort. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
