ITEM:

Is this the end of the free market, as we know it? In testimony before Congress this morning, Treasury Secretary Tim Geithner will propose a sweeping expansion of government regulation over the financial system, ending the Bush era of decontrol. The Washington Post reports the Obama administration's plan would "extend federal regulation for the first time to all trading in financial derivatives and to companies including large hedge funds and major insurers such as American International Group." It also would impose uniform standards on all financial firms, including banks, to curb their risk-taking. Obama won't seek to reshape the government's structure at first, but instead will focus on setting standards, many of which will require legislation.

First, let me state that I am an Obama-fan; the man has an incredible intellect, self-control and poise. He plays the audiences like a fine violin.

If anything, he has been underestimated. I have this strange feeling that what we see is only the tip of the iceberg, and risking ridicule, I posit the following:

The Obama administration has long-term plans for a major overhaul, nay revolution, of the American society. Obama is an idealist, but he is also a realist. The recession has given him the opening and opportunity to make radical systemic changes in the economy, and to introduce difficult but overdue programs such as public medical insurance. The American private health insurance system is broken. In addition to being discriminatory and unfair to the many who cannot afford insurance; it is also major impediment to labour mobility, something even more important in a major recession like now.

The laissez faire approach to the economy and corporations is ending, especially as concerns the banking and investment community. Government involvement and control will become a permanent fixture.

To this end, I suspect that Obama’s anger and ire over the AIG bonus payments were carefully orchestrated to stoke the public ire; and gather support and to lay the grounds for greater government intrusion in the markets, and public welfare in general.

It takes great tribulations to shock public lethargy enough produce major structural changes in a society. War, of course, is some such trauma producing lasting effects and upheavals; severe economic distress, such as the Great Depression are others; and arguably, the present tribulations, can force major changes in the social fabric. Samuel Johnson once said “Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.” Obama is all ready into his “fortnight”, and believe me, his mind is wonderfully concentrated.