Sure, the $700 billion part has turned out to be better than initially expected and that is great. But what about the staggering high unemployment? (The actual unemployment level is considerably higher than the official number.) Nobody believes the unemployment number will be bouncing back to pre-crash numbers for years, possibly even a decade. What Geithner is also ignoring is the trillions lent to the banks to keep them afloat plus the current QE2 bond sales that is feeding Wall Street easy money.

The troubling part about this “TARP was a deal” story is that it dodges the fundamental story, which is that the crisis was the end game of a long process on Wall Street. The administration has bought into the Republican world view on the economy, which is that this was just another crash on Wall Street that occurs from time to time. In their minds, the system needed some reform but this ignores the seriousness of the crisis. Without the wild gambling (or government handouts), there will not be big numbers again on Wall Street. The gambling clearly benefited Wall Street and the traders, but what about everyone else?

The Democrats from Congress through to the White House have missed an opportunity to be serious about reforming the disruptive and expensive businesses on Wall Street. Thanks to their inability to get tough, we now can’t even get the Financial Crisis Inquiry Commission to include words such as “Wall Street” or “deregulation” in their final report. By going soft on the culprits, it’s not even possible to get a unanimous report on the crisis. It’s easy to blame the Republicans for standing up for Wall Street but it’s a mistake to ignore the role of leading Democrats during this process, including President Obama. This failure will continue to weaken Democrats in years to come.