Geithner Plan

[NickCole]

For now, but you are 'predicting' still.

Still predicting, and at the same time watching my earlier predictions prove accurate.

Evidence of your preference for strawmen arguments...

Ah you love to make up stuff.

Actually it's evidence I come here to express my opinion in a form I enjoy.

 

[NickCole]

Today Obama said this:

What we are asking [from the auto industry] is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognize that they cannot hold out for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry. . . .

http://www.nytimes.com/2009/03/30/us/politics/30obama-text.html

He hasn't required this of the financial services industry.

Wall Street gets a hug and Detroit gets a whack.

 

[NickCole]

Someone said, in another thread, that Congress controls all the money and that Obama can't spend one thin dime without their approval. I pointed out how Obama has figured out how to circumvent that, as well as any kind of transparency or oversight. Of course the peanut gallery here didn't believe me.

Here's a very good new piece at Huffington by Robert Kuttner, co-editor of The American Prospect and author of the recent book "Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency."

He addresses this at length.

Even more alarmingly, the administration is now using the Federal Reserve as an unlegislated, all-purpose slush fund. Because the Fed's operations are largely beyond the reach of Congressional appropriations or scrutiny, the Fed can do whatever it wishes with its money. The Geithner plan was negotiated behind closed doors, the main players being the Fed, the FDIC, the Treasury, and power-brokers on Wall Street.

What we have is something perilously close to a dictatorship of the Fed and the Treasury, acting in the interests of Wall Street. The contrasts with the first hundred days of the Roosevelt administration are striking. ...

http://www.huffingtonpost.com/robert-kuttner/obamas-banking-rescue-o-f_b_180529.html

 

[NickCole]

Chump change.


Financial Rescue Approaches GDP as U.S. Pledges $12.8 Trillion

March 31 (Bloomberg) -- The U.S. government and the Federal Reserve have spent, lent or guaranteed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.

New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008. ...

http://www.bloomberg.com/apps/news?pid=20601087&sid=armOzfkwtCA4&refer=home

 

[NickCole]

In this thoughtful piece, Adam Posen makes the point I've been making for months:


As the president heads to the G-20 conference, one of America’s most respected international economists warns that the Geithner plan repeats the same errors Japan made in the 1990s.

What the Obama team is proposing is disconcertingly similar to the actions of Japanese Prime Ministers Hashimoti, Obuchi, and Mori in 1995 and 1998: Rather than ask the legislature for straightforward recapitalization money, you have the political leadership preferring to risk overpaying current owners of toxic assets rather than forcing sales. For all of Japan’s supposed intervention in markets, its government still lacked the stomach for taking over banks, let alone closing them.

http://www.thedailybeast.com/blogs-and-stories/2009-03-29/does-obama-have-a-plan-b/full/

 

[NickCole]

“My administration,” [Obama told bank CEOs assembled at the White House last week], “is the only thing between you and the pitchforks.”

http://www.politico.com/news/stories/0409/20871.html

Interesting Obama chose to be the only thing protecting bankers from the pitchforks rather than use his political capital for the right policy moves to make Wall Street and the economy healthy.

.

 

[NickCole]

In Europe Obama seems to be doing well with words, but substantive action not so much. As usual.

After more than 11 hours of meetings, Mr. Obama emerged Thursday from his first summit meeting with a handful of modest concrete commitments. He did not get much of what American officials had been hoping for, notably failing to persuade other countries to commit to more fiscal stimulus spending.

http://www.nytimes.com/2009/04/03/world/europe/03assess.html?_r=1&hp

 

[NickCole]

Obama's top economic advisor.


Hedge Fund Paid Summers $5.2 Million in Past Year

WASHINGTON -- Top White House economic adviser Lawrence Summers received about $5.2 million over the past year in compensation from hedge fund D.E. Shaw, and also received hundreds of thousands of dollars in speaking fees from major financial institutions.

A financial disclosure form released by the White House Friday afternoon shows that Mr. Summers made frequent appearances before Wall Street firms including J.P. Morgan, Citigroup, Goldman Sachs and Lehman Brothers. ...

Imagine my surprise.

... Mr. Summers is involved in shaping the Obama administration's policy decisions on the financial meltdown as well as the broader recession. Among the many decisions the economic team has wrestled with has been whether to step up regulation of hedge funds, one of the most contentious subjects during a summit of world leaders this week. European nations pushed for tougher rules, while the Obama administration preferred a less stringent approach.

http://online.wsj.com/article/SB123879462053487927.html

 

[opinterph]

Imagine my surprise.

Does anything in the article suggest that Dr. Summers has engaged in behavior that may indicate a conflict of interest?

(from the linked article)

shed fees paid to him from a Wall Street firm that received federal funds.

donated the sum to charity.

elected to donate those funds to charity."

Financial Disclosure: Lawrence Summers, March 23 (Note: The form is difficult to view online.)

 

[naked gent]

The insistence of our governing class that the only people who can clean up this mess is those who participated in it is really disgusting.

It seems saving the economy cannot be separated from saving the monied class which caused the problem.

Meet the new boss......same as the old boss.

 

[naked gent]

Does anything in the article suggest that Dr. Summers has engaged in behavior that may indicate a conflict of interest?

Whatever happened to 'its the appearance of impropriety' that has to be avoided?

 

[opinterph]

Whatever happened to 'its the appearance of impropriety' that has to be avoided?

I don't know. Perhaps we should discuss that issue.

Appearance of impropriety is a term often used in reference to a situation whose ethics are deemed questionable. It means that any layperson, without knowledge of the facts, would assume that something he/she saw or heard was inappropriate or a violation of a rule/regulation. The origin of the phrase is often attributed to the Bible (1 Thessalonians 5:22).

 

[naked gent]

BTW opinterph my objection to Mr. Summers inclusion in the Obama administration is not limited to his possible conflicts of interest. I don't even know why they need him in the job.

It didn't exist before Obama was elected and it only adds another level of economic advisors to the WH. Now we have treasury, the council of economic advisors and Mr. Summers to "coordinate policy".

It sounds like another level of bureaucracy has been added for no good reason......evidently President Obama does not share President Truman's desire for a one handed economist.

 

[opinterph]

… I don't even know why they need him in the job.

It didn't exist before Obama was elected and it only adds another level of economic advisors to the WH. Now we have treasury, the council of economic advisors and Mr. Summers to "coordinate policy".

Dr. Summers is currently Director of the National Economic Council, which was created by President Clinton in 1993.

 

[NickCole]

Does anything in the article suggest that Dr. Summers has engaged in behavior that may indicate a conflict of interest?

Ah, that's one of those questions.

Something actionable? No.

It's further indication of what exists in the thought process within the administration that may be feeding into the very bad decision making from ObamaCo in dealing with the economy and financial mess.

 

[naked gent]

Dr. Summers is currently Director of the National Economic Council, which was created by President Clinton in 1993.

Right you are opinterph I stand corrected.

BTW nice Bible link....I never would have guessed that phrase came from that book.

 

[NickCole]

William Black is the enforcer who took down Charles Keating in the S&L scandal. He was on Bill Moyers the other day and his indictment of Obama's response to the financial scandal is stunning. Here's a little of it and the transcript; but a sampling isn't enough, there's so much, read the whole thing.

BILL MOYERS: What is your explanation for why the bankers who created this mess are still calling the shots?

WILLIAM K. BLACK: Well, that, especially after what's just happened at G.M., that's... it's scandalous.

BILL MOYERS: Why are they firing the president of G.M. and not firing the head of all these banks that are involved?

WILLIAM K. BLACK: There are two reasons. One, they're much closer to the bankers. These are people from the banking industry. And they have a lot more sympathy. In fact, they're outright hostile to autoworkers, as you can see. They want to bash all of their contracts. But when they get to banking, they say, ‘contracts, sacred.' But the other element of your question is we don't want to change the bankers, because if we do, if we put honest people in, who didn't cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up.

BILL MOYERS: The cover up?

WILLIAM K. BLACK: Sure. The cover up.

BILL MOYERS: That's a serious charge.

WILLIAM K. BLACK: Of course.

BILL MOYERS: Who's covering up?

WILLIAM K. BLACK: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have massive losses, and that they're fine.
These are all people who have failed. Paulson failed, Geithner failed. They were all promoted because they failed, not because...

BILL MOYERS: What do you mean?

WILLIAM K. BLACK: Well, Geithner has, was one of our nation's top regulators, during the entire subprime scandal, that I just described. He took absolutely no effective action. He gave no warning. He did nothing in response to the FBI warning that there was an epidemic of fraud. All this pig in the poke stuff happened under him. So, in his phrase about legacy assets. Well he's a failed legacy regulator. ...


BILL MOYERS: To hear you say this is unusual because you supported Barack Obama, during the campaign. But you're seeming disillusioned now.

WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law.

http://www.pbs.org/moyers/journal/04032009/transcript3.html
​

 

[NickCole]

Obama is not only failing in his response to the financial crisis, he's being sneaky and lying.

"Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?

In the last six months, AIG has received substantial sums from the US Treasury. I’ve asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole." --President Obama

http://christyhardinsmith.firedoglake.com/2009/03/16/obama-remarks-today-on-aig/

Just words.

The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.

Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the $700 billion financial rescue package.

The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials.

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/03/AR2009040303910.html?hpid=topnews

 

[BabiGayPimp]

Sorry, but I've lost all confidence in the so-called efficiency and omniscience of the financial markets. It seems even a billion minds working it out together can still be wrong.

 

[NickCole]

Sorry, but I've lost all confidence in the so-called efficiency and omniscience of the financial markets. It seems even a billion minds working it out together can still be wrong.

All depends on the thought process of those minds.

When they're deceitful and sneaky and more interested in personal gain than in following solid principles and solving problems, we end up with what we've got.

It's a shame because it's actually a brilliant system. Unfortunately when narcissists and cheats and liars are in power, it's screwed. And when Americans vote in someone like Obama, who's the same way, we're all screwed.