Barack Obama's Economic Dream Team

6 posts / 0 new
Last post
GregSchleich's picture
GregSchleich
Status: Silver Member (Offline)
Joined: Jan 16 2009
Posts: 187
Barack Obama's Economic Dream Team


By now, most of us are well aquainted with the Obama economic team. And while much of this is old news, when you put it all together, an ironic pattern emerges. It seems, the team of "experts" charged with getting us out of the financial crisis are some of the very same people who helped get us into it! This is quite a cast of characters. About the only guy missing is the bogeyman himself, Republican, Phil Gramm. (Although the then President-elect Obama did manage to send his cohort, Jim Leach, co-author of the now infamous Gramm-Leach-Bliley Act, as his representitive to the emergency G-20 meeting, last November)

Let's start with Timothy Geithner. A tax cheater from his time at that benevolent instrument of largesse, the International Monetary Fund (IMF), (regarded by some on these pages as the impoverisher of the developing world), as the new Secretary of Treasury, fittingly, Geithner is now head of the IRS. As president of the New York Federal Reserve, along with Greenspan and Bernanke, he presided over the easy credit that fueled the disastrous housing bubble. Geithner also worked closely with Henry Paulson, to orchestrate the Bear Stearns and AIG bailouts, so there's no reason not to expect the same kind of looting to continue. Like Obama, Geithner promises change. One of his first acts, upon confirmation, was to issue new transparency and lobbying rules for oversight of TARP.  One of his next acts was to pick recent ex Goldman Sachs lobbyist, Mark Patterson as his chief of staff, thus requiring a waiver from Obama on his own Lobbyist policy!

Then there's Geithner's old boss and mentor, Lawrence Summers, former Clinton Treasury Secretary, now Obama's top economic advisor. Like Geithner, Summers also has ties to an international do-gooder organization, the World Bank (also treated with suspicion on these pages) Lest anyone doubt the loftiness of his intentions, in 1991, when he was chief economist there, he signed off on a memo advocating toxic waste dumping in Africa, in which he said,"I've always thought that under-populated countries in Africa are vastly UNDER-polluted." Now there's a guy who's nothing if not pragmatic! Summers was another big fan of the Gramm-Leach-Bliley Act, that Phil Gramm always gets all the credit for. He told the WSJ it would "spur growth by promoting financial innovation, lower capital costs and greater international competitiveness." 

 Then, of course, there's Paulson's old colleague at Goldman Sachs, Robert Rubin, Summers' predecessor as Clinton Treasury Secretary, who served as economic advisor on the Obama transition team. Rubin is essentially the progenitor of the entire dream team. Geithner, Summers, OMB Director, Peter Orszag, and and now CFTC nominee, Gary Gensler are all proteges of Rubin's. Rubin was one of the strongest advocates persuading Clinton to sign the Gramm-Leach-Bliley Act, repealing Glass-Steagall, thus allowing the new financial services giants like Citi Group to form. We all know what happened next. And of course Rubin left Teasury in 1999, to go to Citi, eventually walking off with a cool $115 million while they went off the cliff. $45 billion of taxpayer money has already been doled out, but we could still be on the hook for another $250 billion, eventually! Judging from the team that Obama has assembled, does anyone doubt we we'll just keep pouring money down this sink hole, if need be?

But what about the former Federal Reserve Chairman, Paul Volker? Volker seems to be the one guy on the Obama team, outside the loop, and without a hand in the meltdown. Back in 1987, when the Federal Reserve Board voted 3-2 to allow commercial banks to package securities, including MORTGAGE-BACKED SECURITIES, Volker argued against it, warning quite presciently that lenders would "recklessly lower loan standards in pursuit of lucrative securities offerings, and...market bad loans to the public." But the problem is, Volker is not actually ON the Obama team. He heads the outside Economic Recovery Advisory Board, and according to Bloomberg, Summers is not interested in his advice and is already boxing him out. As Frank Rich puts it, "a team of rivals is not his thing."   

In the second Presidential debate, Barack Obama said, "the biggest problem in this whole process was the deregulation of the financial system." If that's the case, you have to wonder why he would stack his economic team with the very people who most aggressively pushed for it. Not only were Rubin and Summers strongly in favor of repealing Glass-Steagall, they were also at the forefront of stopping the regulation of Over-the-counter (OTC) derivatives, (including credit default swaps, etc.) which we now know became the great multiplier of the sub-prime meltdown. In 1998 when Brooksley Born, Chairperson of the Commodity Future Trading Commission (CFTC) issued a memo "re-examining it's approach to the OTC Derivatives market," exploring the possible need for regulation, Rubin and Summers rose up against her. Testifying before the senate, Summers said, by releasing it's memo,  the CFTC "has cast the shadow of regulatory uncertainty over an otherwise thriving market, raising risks for the stability and competitiveness of American derivative trading." In a final piece of irony, coming full circle, the new nominee for head of the CFTC, Brooksley Born's old post, is Gary Gensler, former Goldman Sachs partner, yet another Rubin protege, and also former UnderSecretary of Treasury to Summers.

So that's the dream team. All from the Clinton administration, a team of Robert Rubin acolytes, Goldman Sachs and Citi Group cronies with ties to the IMF and the World Bank. Probably not that different from previous cabinets, but that's the point. Where's the change? I would look for these people to do everything in their power to maintain the status quo. That's what they're there for. 

machinehead's picture
machinehead
Status: Diamond Member (Offline)
Joined: Mar 18 2008
Posts: 1077
Re: Barack Obama's Economic Dream Team
GregSchleich wrote:

Where's the change? I would look for these
people to do everything in their power to maintain the status quo.
That's what they're there for.

Yup. The Depublicrat party has ruled for 150 years. They have no
intention of relinquishing power now, or changing the status quo.

For instance, it's well known that some serious crimes and treaty violations occured
during the previous adminstration. President Bush publicly admitted to
violating the FISA Act -- a felony -- in order to conduct wiretaps
without court permission.

This week, Senator Leahy proposed a
'truth and reconciliation' commission to delve into wiretaps, torture,
renditions, misleading Iraq war intelligence, and so forth. The
commission would have subpoena power, but no ability to prosecute
violations of law which may be identified. Yet it's doubtful that even
Leahy's modest proposal will be enacted. Why is it that the political
elite can violate the law with impunity? Why has no grand jury been
empanelled to look into these matters?

One need look no further
than the buddy-buddy relationship between George Bush Sr. and Bill
Clinton. Clinton didn't delve into the questionable events of the Bush
I adminstration; Bush II didn't probe the shenanigans of the Clintons;
likewise, Obama and Democratic Congressional leaders have no interest in
excavating skeletons from Bush's closet. The sad reality is that the
Justice Department is totally politicized, answering to the whims of
the president. When presidents collude in extending 'professional
courtesy' to each other, the Attorney General keeps his lip buttoned,
regardless of slam-dunk evidence which would support indictments.

What
the entrenched political class regards as 'unproductive
retribution' is what many people would call 'equal application of
the law.' The unapologetic two-tier justice system we have today
-- harsh laws for the little people, impunity for the powerful -- is
utterly corrosive to civil society. A country which winks at high-level corruption has a limited life expectancy.

Gadfly's picture
Gadfly
Status: Silver Member (Offline)
Joined: Dec 5 2008
Posts: 127
Re: Barack Obama's Economic Dream Team

GregSchleich, 

    This is a very well written post, so much so, my first instinct was plagiarism.  However, after google-searching the first paragraph, it appears that this is an original piece.  Well researched, are you a writer? 

Your Admirer;

Gadfly 

P.S.  You misspelled "acquainted".  It came up on Google-search. 

Stan Robertson's picture
Stan Robertson
Status: Platinum Member (Offline)
Joined: Oct 7 2008
Posts: 651
Re: Barack Obama's Economic Dream Team

Excellent post, GregSchleich. So the question is, why did Pres. Obama put these inmates in charge of the asylum?

Stan

GregSchleich's picture
GregSchleich
Status: Silver Member (Offline)
Joined: Jan 16 2009
Posts: 187
Re: Barack Obama's Economic Dream Team

Gadfly

As for the writer thing, it's a road not taken. I am a writer of music and lyrics though. I'm a musician, and we've got an old saying: "Good composers borrow. Great composers steal!" But no, I did not plagiarize this piece! Believe me, it was a pain in the @ss to write! So I appreciate your kind words.

Thanks

Greg

P.S. I'll work on my spelling! 

SamLinder's picture
SamLinder
Status: Diamond Member (Offline)
Joined: Jul 10 2008
Posts: 1499
Re: Barack Obama's Economic Dream Team
GregSchleich wrote:

Gadfly

As for the writer thing, it's a road not taken. I am a writer of music and lyrics though. I'm a musician, and we've got an old saying: "Good composers borrow. Great composers steal!" But no, I did not plagiarize this piece! Believe me, it was a pain in the @ss to write! So I appreciate your kind words.

Thanks

Greg

P.S. I'll work on my spelling! 

Greg,

Thanks for directing me here from the other thread. I agree with Gadfly - the part about a great post, not the part about plagiarism.  Wink

Perhaps you should look into becoming a newspaper columnist in your spare(?) time - I wish I had seen your post when Obama was still picking his cabinet. I would have fired off a few well chosen words to his web site!

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments