Translated into Truth: On Summers Withdrawing Name (Ritholtz)

[swag]

http://www.ritholtz.com/blog/2013/09/translated-into-truth-on-summers-withdrawing-name/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29

Here’s what President Barack Obama‘s statement on Lawrence Summers‘s decision to withdraw his name from consideration to be the next chairman of the Federal Reserve would have looked like after 40 milligrams of Sodium thiopental:

“Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve.

Larry was a critical contributor to the radical deregulation that was one of many causes of the worst economic crisis since the Great Depression. It was in no small part because of his lack of expertise, false wisdom, and inept leadership that the economy crashed and burned and even today is still failing to be to back to its full growth potential.

As Treasury Secretary, he helped to pass the Commodity Futures Modernization Act. This turned derivatives into a unique financial instrument with no oversight, reserve requirements, mandated disclosures, or listing minimums. The CFMA all but guaranteed that Derivatives would eventually implode. Summers further contributed to the crisis by Summers by overseeing the repeal of Glass Steagall. With this firebreak between Wall Street and Main Street effectively removed, the financial conflagration of 2008 spread from Wall Street to every corner of the economy.

Further, his terrible advice and lack of insight is in large part the reason we see so little progress being made today — the lack of economic growth, the concentrated bank power, the still dangerous financial system and of course, the sub par job creation.


. . . more

[Autumn]

1. Accepted his decision , my ass.

I'm betting Obama told him NO, you don't get the job, so withdraw. Good job Obama, you did it right.

[Skittles]

3. yes.....he finally saw the light

[Cryptoad]

8. I cursed the Darkness

therefore the Sun rose in the East!

[Skittles]

9. ...

http://www.washingtonpost.com/business/economy/larry-summers-withdraws-name-from-fed-consideration/2013/09/15/7565c888-1e44-11e3-94a2-6c66b668ea55_story.html

[Cryptoad]

10. Krugman for Chairman! nt

[pam4water]

7. Hope you are having a nice time on that cruisind down de nile!

[Autumn]

12. It's not denial. Obama was under pressure, douche nozzle Summers

doesn't have the integrity to drop out of the running for job that he wanted, so I really believe Obama told him no dice. That's just my opinion.

[grantcart]

11. It was clearly Obama's decision but as always he was gracious about it and let Summers have

some dignity about it.

[Autumn]

14. That's what I believe. Summers didn't drop out. Obama dropped him.

And yes, that was kind of Obama to leave him a little dignity. IMO he didn't deserve it but Obama is a decent man.

[VanillaRhapsody]

27. oh yes "clearly" .....

Love how those who have been screaming about how much Obama is an evil tyrant who only cares for the 1%...now have the ability to read his mind on Summers...

[grantcart]

29. it really has nothing to do with reading Obama's mind as much

As the well known lust that Summers had for the job and the fact that his persona is always in conflict mode..

Were you intimating that I was among those "screeming how PO is a tyrant?"

[VanillaRhapsody]

31. Were you one?

and yes there are a lot of comments here proclaiming to "know" what Obama "would have done". And clearly...THEY don't.

[grantcart]

32. I don't think there are many that would put me in that camp &

More than a few that will chuckle at the suggestion.

[VanillaRhapsody]

34. okay then the shoe didn't fit....so why take offense?

it's not like it isn't true in general...

[grantcart]

35. No offense its just that I am fairly well known to be on the other side so

I was just trying to clarify.

[VanillaRhapsody]

36. Good ...glad to hear it!

Cheers!

[RC]

18. It seems to me that Obama nominated Summers in the first place.

Or at at the very least endorsed Larry Summers for the Fed position. The history re-writers seem to be out working this evening.

[Autumn]

19. Yes he did. And had there been no push back Summers would have been the head of the FED.

[VanillaRhapsody]

28. and you know this how? Since we know you got that crystal ball you got at the bargain basement...

[Skittles]

21. they are getting worse by the day

[snappyturtle]

30. Watch this video and you may see why Summers wa

nominated.....I wasn't happy.

http://www.democraticunderground.com/1017145923

[Doctor_J]

24. Or not

http://www.democraticunderground.com/1014553343

[VanillaRhapsody]

26. and your predictions have been so "spot on" lately huh?

[enough]

2. Haven't read Barry Ritholtz in a while. This short piece reminds me to go back.

His book, Bailout Nation, was a real education (plus being fun).

Thanks for posting this.

[swag]

4. Yeah, Bailout Nation would be a great re-read on the fifth anniv of Lehman collapse

[scarletwoman]

5. Excellent! Love it - thanks for posting!

[Benton D Struckcheon]

6. I'd actually forgotten he was involved in all that crap,

and was wondering what the uproar here was about. I knew from his Harvard presidency he was an ass. Didn't remember he was one of the culprits in the destruction of Glass-Steagall's wall between commercial and investment banking.
Any Democrat involved in that should hide his head in shame. Knowing the way Summers is, there's exactly zero chance he'd ever do such a thing.

[DURHAM D]

13. Let's get real. He was not going to make it out of committee.

Tim Johnson, South Dakota, Chairman
Jack Reed, Rhode Island
Chuck Schumer, New York
Bob Menendez, New Jersey
Sherrod Brown, Ohio
Jon Tester, Montana
Mark Warner, Virginia
Jeff Merkley, Oregon
Kay Hagan, North Carolina
Joe Manchin, West Virginia
Elizabeth Warren, Massachusetts
Heidi Heitkamp, North Dakota

Four members had already said they would vote NO. Tester, Merkley, Warren, Brown.


The President had no choice but to ask for his withdrawal.

[magical thyme]

15. WHOPPEEE a TWOFER!!!! While some speculated Sunday that Obama might turn to Geithner,

...a person close to the former Treasury secretary said he (Timmeh) does not want to be considered.

[grantcart]

33. Geitner made that clear months ago.

[magical thyme]

37. and nobody ever changes their minds.

but tyvm for raining on my celebration.

[grantcart]

38. It was at best a parade of straw men as TG had taken himself out of the running

months ago.

http://www.bloomberg.com/news/2013-07-30/could-geithner-end-up-the-next-fed-chairman-.html

Summers was obviously flawed but before dancing on TGs grave it should be noted that he was the most effective spokesman on increasing taxes on the rich. His background is routinely misrepresented so why stop now, huh?

If people get a good hate rant going why let something like a fact get in the way.

http://www.nytimes.com/2010/08/20/business/20tax.html?_r=0

WASHINGTON — Timothy F. Geithner has been misidentified as a former Wall Street insider from Goldman Sachs so many times since he became the Treasury secretary that he and his advisers had taken to joking about it

. . . .

Just as the Geithner aide’s humor fell flat, likewise newspaper corrections, Mr. Geithner’s objections to TV news interviewers and his staff’s work to spread the boss’s résumé have failed to dispel the belief that Mr. Geithner is a former Wall Street banker, or more specifically, a Goldman guy.

That perception over the last 20 months has united liberal and conservative critics but reflects a broader antagonism against the government bailouts for which Mr. Geithner has been a frontline architect

. . .

So perhaps it is good for the Geithner image that he is President Obama’s point man in opposing the extension of the Bush tax cuts for the wealthy after their Dec. 31 expiration. White House aides at times have urged Mr. Geithner to take more populist stands and he has balked — on capping executive pay, for example. But advisers say he is comfortable opposing the tax cuts for reasons that have nothing to do with separating himself from the real Wall Street types.

In speeches and interviews, he has cited the projected $700 billion, 10-year cost of the tax cuts, and nonpartisan analyses that they do not stimulate the economy because the wealthy tend to save the additional money rather than spend it.

“I believe there is no credible argument to be made that the purpose of government is to borrow from future generations of Americans to finance an extension of tax cuts for the top 2 percent,” Mr. Geithner said in a recent speech.

[Jack Rabbit]

16. K/R with LOL

!!

[jtuck004]

17. Clinton Says Rubin, Summers Gave `Wrong' Derivatives Advice

(Just to make it easier to find information about the ongoing screwing that the criminal actions of the major banks are perpetrating on us...)

Former President Bill Clinton said his Treasury Secretaries Robert Rubin and Lawrence Summers were wrong in the advice they gave him about regulating derivatives when he was in office.

“I think they were wrong and I think I was wrong to take” their advice, Clinton said on ABC’s “This Week” program. ...

Here.
(He later said he conflated advice he was getting from Greenspan). Summers was one of the major architects of the legislation.

and

Lest We Forget: Why We Had A Financial Crisis - Here.

It is clear to anyone who has studied the financial crisis of 2008 that the private sector’s drive for short-term profit was behind it. More than 84 percent of the sub-prime mortgages in 2006 were issued by private lending. These private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Out of the top 25 subprime lenders in 2006, only one was subject to the usual mortgage laws and regulations. The nonbank underwriters made more than 12 million subprime mortgages with a value of nearly $2 trillion. The lenders who made these were exempt from federal regulations.
...
So let’s recap the basic facts: why did we have a financial crisis in 2008? Barry Ritholtz fills us in on the history with an excellent series of articles in the Washington Post:

In 1998, banks got the green light to gamble: The Glass-Steagall legislation, which separated regular banks and investment banks was repealed in 1998. This allowed banks, whose deposits were guaranteed by the FDIC, i.e. the government, to engage in highly risky business.

Low interest rates fueled an apparent boom: Following the dot-com bust in 2000, the Federal Reserve dropped rates to 1 percent and kept them there for an extended period. This caused a spiral in anything priced in dollars (i.e., oil, gold) or credit (i.e., housing) or liquidity driven (i.e., stocks).
Asset managers sought new ways to make money: Low rates meant asset managers could no longer get decent yields from municipal bonds or Treasurys. Instead, they turned to high-yield mortgage-backed securities.
The credit rating agencies gave their blessing: The credit ratings agencies — Moody’s, S&P and Fitch had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.
...

[blkmusclmachine]

20. .

.

[yurbud]

22. It was not incompetence--he was very competent at executing the orders of the wealthy

and didn't care about the consequences for the rest of us.

[dreamnightwind]

25. My reaction too

I rec'd this OP but had the same issue with the incompetence angle. Often when we think people are incompetent it is because we are evaluating their behavior under false assumptions about what it is they are trying to accomplish.

[Enthusiast]

23. Kicked and recommended....nt