One of President Barack Obama's most prominent Wall Street backers gives him high marks on just about everything except his approach to Wall Street.
Billionaire investor George Soros today said that Obama is "doing very well except in the recapitalization of banks and the reorganization of the mortgage market."
But, he said, "I'm afraid that it's too much continuity between the Obama administration and the Bush administration as far as the management of the financial system is concerned," Soros said this morning at a breakfast discussion hosted by the Wall Street Journal.
Soros also predicted that fears of inflation would drive up interest rates and "choke off" economic recovery.
Soros' early and vocal support of the Obama campaign hasn't stopped him from repeatedly criticizing the administration's work on the economy.
Although he was recently quoted as saying that the worst of the financial crisis is over, he reiterated his critiques of the White House today, saying that the Treasury Department, early on, should have served as an "underwriter" for the country's troubled banks, providing them with capital only if they couldn't raise it from investors.
Soros later told ABCNews.com that while that the government's recent program for a handful of major banks hewed more closely to his prescription, it comes "rather late." Following the government's "stress tests" on financial institutions, certain banks, including Bank of America and Citigroup, were required to seek additional capital from investors before seeking aid from the government.
Soros voiced support for what is often referred to as the "good bank/bad bank" solution.
He argued that each bank that was heavily loaded with so-called "bad assets" -- a term now commonly associated with investments related to defaulting mortgages and other loans -- should have been split in two separate banks: one that would focus on making the most of those bad assets and another "new bank" that could concentrate on other investments.
"I would have been very happy to put all my capital in the new bank," he said, adding that banks are doing "fabulously" on their new business.
Soros: Obama Administration 'Went Their Way'
Soros said he'd spoken with the administration on the subject but "they went their way."
He later added that he did not plan to participate in the administration's Public-Private Investment Program, the White House's effort to get investors to buy banks' bad assets.
With respect to the mortgage market, Soros said he wished the administration would adopt "the Danish system" -- one now in place in Denmark that requires those that put together mortgage-backed bonds to retain some responsibility over them. In other words, those that put together the securities would face risks if the mortgages defaulted.
Soros said that Obama's reorganization of the mortgage market hasn't really started but he worried that the administration wasn't ready for the "radical change" that he proposes.
Soros also weighed in on the current and past leaders of the Treasury Department. Soros said he believed Obama economic advisor Larry Summers would make a better Treasury secretary than Secretary Timothy Geithner. He called Geithner's predecessor, Bush Treasury Secretary Hank Paulson, a "bully."
The public, Soros suggested, is not blameless in the financial crisis.
"When you have an electorate that is unwilling to face unpleasant reality, that needs to be told stories, that needs to be deceived, then, unfortunately, that democracy doesn't work very well," he said. " ... That's, unfortunately, where we currently are and I think we need to change."
ABC News' Nathalie Tadena contributed to this report.