"Same old Wall Street Hucksters" The Nation:

[amborin]

<snip>

" .....Reject the old-boy network whose sexism, stupidity and greed helped drive our current financial crisis. How about Sheila Bair for Treasury Secretary?


Robert Scheer: How can a President Obama improve US relations with Russia if some of his closest advisors are unrepentant hawks from the cold war era?

...how else is one to respond to Barack Obama's picking the very folks who helped get us into this financial mess to now lead us out of it? Watching the president-elect's Monday introduction of his economic team, my brother-in-law Pete said, "You can see the feathers coming out of their mouths" as the foxes were once again put in charge of the henhouse.

He didn't have time to expound on his point, having to get ready to go sort mail in his job at the post office, but he showed me a statement from Citigroup showing that the interest rate on Pete the Postal Worker's credit card was 28.9 percent, an amount that all major religions would justly condemn as usurious.

Moments earlier, Obama had put his seal of approval on the Citigroup bailout, which his new economic team, led by proteges of Citigroup Executive Committee Chairman Robert Rubin, enthusiastically endorsed. A bailout that brings to $45 billion the taxpayer money thrown at Citigroup and the guarantee of $306 billion for the bank's "toxic securities" that would have been illegal if not for changes in the law that Citigroup secured with the decisive help of Rubin and Lawrence Summers, the man who replaced him as Treasury secretary in the Clinton administration.

As Summers stayed on to ensure passage of deregulatory laws that enabled enormous banking greed, Rubin was rewarded with a $15 million-a-year executive position at Citigroup, a job that only got more lucrative as the bank went from one disaster, beginning with its involvement with Enron in which Rubin played an active role, to its huge role in the mortgage debacle. It is widely acknowledged that Citigroup fell victim to a merger mania, which Rubin and Summers made legal during their tenure at Treasury.

Yet despite that dismal record of dismantling sound regulation, Summers has been picked by Obama to be the top White House economic adviser and another Rubin disciple, Timothy Geithner, is the new Treasury secretary. Geithner, thanks in part to the strong recommendation of Rubin, had been appointed chairman of the New York Federal Reserve Bank after working for Rubin and Summers during the Clinton years. Once at the New York Fed, he was the main government official charged with regulating Citigroup, a task at which he obviously failed. Yet over the weekend, it was Geithner who hammered out the Citigroup bailout deal with Treasury Secretary Henry Paulson and a very actively involved Rubin.

As the Washington Post reported, Paulson had indicated last week that no further bailouts were planned before the new administration took office until "Rubin, an old colleague from Goldman Sachs, told Paulson in phone calls that the government had to act." Rubin conceded in an interview with the Post that he had played a key role in the politics of the bailout.

This outrageous conflict of interest in which Rubin gets to exploit his ties to both the outgoing and incoming administrations was best described by Washington Post writer Steven Pearlstein: "The ultimate irony, of course, is that just as Rubin and Co. at Citi were being bailed out by the Bush Administration, President-elect Barack Obama was getting set to announce a new economic team drawn almost entirely from Rubin acolytes."

As opposed to the far tougher deal negotiated on the bailout of AIG, the arrangement with Citigroup leaves the executives, including Rubin, who brought Citigroup to the brink of ruin, still in charge. Nor is there any guarantee of the value of the mortgage bundles that taxpayers will be guaranteeing. That is because, as candidate Obama clearly stated in his major economics address back in March, the deregulation pushed though during the Clinton years ended transparency in banking.

Why then has he appointed the very people responsible for this disaster to now make it all better? Why not ask him? Heck, yes, it is time for the many of us who responded to his e-mails during the campaign to now challenge our e-mail buddy as to why he suddenly acts as if the interests of Wall Street and Main Street are one and the same. ..."

<snip>

<http://www.thenation.com/doc/20081208/scheer?rel=hp_picks>

[anonymous171]

1. I saw "Ralph Nader" then skipped down to the bottom and wrote this comment.

[Runcible Spoon]

2. wow how nice to see someone owning up to their ignorance rather than denying it.

Maybe you might make it past the fourth word another day. I will keep hoping for you.

[Skwmom]

3. Would someone please explain to me how Summers, Geithner, and Rubin are brilliant?

We hear again and again how these people are SO BRILLIANT. I'd just like someone to explain a logical argument for that assessment.

[Hippo_Tron]

4. Yea I'm not sure I'd call Summers and Rubin brilliant

They are very intelligent, don't get me wrong. But Condi is also very intelligent.

[Skwmom]

5. So how does someone who is "very intelligent" screw up so badly?

On such a monumental scale?

[girl gone mad]

6. My theory is that a lot of what goes on in..

higher education, particularly at the ivies, is teaching kids how to groupthink instead of teaching them how to think independently.

[Skwmom]

21. This country needs more independent, analytical thinking. n/t

[Hippo_Tron]

7. I think that's the difference between "very intelligent" and "brilliant"

Very intelligent people screw up quite a bit. Brilliant people also screw up but I would call somebody brilliant if they had seen all of this coming far before it did.

[sandnsea]

8. Historically, people didn't walk away from homes

People took second jobs, third jobs, did whatever they had to. It seems to me that they first ended the bankruptcy option. Then they opened up home mortgages to more and more people as a means to get the economy going. Then they sold those bundled mortgages as investment vehicles, based on the profits from interest going from 4% to 10% or 15%. They didn't calculate how crunched people already are because wages have been stagnant so long. They just don't understand what it's like for the bottom 60% or so. I think they were genuinely surprised when they started reporting on people walking away from their homes, while still paying on their credit cards, etc. They just don't get what they've done, and I don't think most of them get it yet. Reich does, and that's about it.

[glitch]

10. And then those second and third jobs no longer being available.

Not a lot of options left when systemic long term high unemployment kicks in.

[WCGreen]

16. BINGO....

[Skwmom]

22. They do when home prices are not based in reality.

Being upside down in a car is quite different from being upside down in a home. A LOT OF FRAUD took place. Good people were preyed upon by white collar criminals who will in all likelihood, walk away scot-free.

[GreenArrow]

13. intelligence does not equal wisdom, judgement, vision

.

[Hawkowl]

14. Most brilliant thieves

They are simply the most brilliant crooks the world has ever seen. They keep perpetuating these ponzi schemes and getting millions upon billions of dollars and yet, all the while, keep control of the government, be it republican or democrat.

That's how they are brilliant. I won't say I'm disappointed, because this is what I expected from Obama. He is a product of the University of Chicago, and his economics are going to be heavily influenced by these free market fraudulent criminals.

[wyldwolf]

9. Perhaps, one day, the Nation and their ilk can get someone elected more to their liking

...

[cyberpj]

11. Longtime DUer, super-ardent Obama supporter and open minded debater -

and am I wrong or isn't The Nation typically one of "our" actually more truthful magazines?

I keep checking back here for some open and honest input regarding this article but no one seems to be responding to the actual article.

I ask because the topic addresses some things I've been wondering myself and I know I will be asked about at the family Thanksgiving gathering because of my rabid Obama support during the campaign and election.

Can I get some intelligent DU discussion to what's been said by the writer?

Why ARE these people appointed?

In your opinion, anyway.......

[Laelth]

12. I think what Obama is doing is brilliant.

Just remember that every person Obama brings into the executive branch of government can be fired. Emanuel gives up his house seat to become Chief of Staff. Then, he either toes the progressive line, or he's fired. Either way, Obama cuts off one head of the DLC.

Same with Hillary. As soon as she gives up her Senate seat, she must either toe Obama's line or get fired. Thus, Obama controls her, and Bill Clinton as well, though to a lesser degree.

Same with Summers. He will have to either do Obama's bidding or he'll be fired and disgraced.

I see method to this madness, and I like what I see. I am very hopeful.

The United States is a LIBERAL Country.

:dem:

-Laelth

[amborin]

15. you said,

"...Summers...will either have to do Obama's bidding or he'll be fired..."

that's not how it works, though.....

oodles have been written about how a single individual, even a world famous economist, does not have the power to change the economy or really control it....there are simply too many complex factors affecting a nation's economy for any one individual to be in control...

not only that, but only a few presidents have been trained as economists; Obama is not trained as an economist, but rather as a lawyer; he started his career out as a law professor;

so, like most presidents, Obama chooses a coterie of economic advisors, who will advise him and work with him to implement his general goals; economists work within certain frameworks that they've been trained in, and they have histories, constisting of the decisions they've made and the behaviors they've executed; these clue people in as to their most likely stance toward situations, and their most likely course of future action; it's true Obama can fire Summers, but it's largely Summers and crew who are making the suggestions about courses of action.

[Laelth]

20. You're right, of course.

It is yet to be seen whether Obama will follow those suggestions or not. I remain hopeful that he will exercise considerable control over his cabinet and his economic advisers.

The United States is a LIBERAL Country.

:dem:

-Laelth

[Hippo_Tron]

17. Obama seems to be looking for experience and wisdom in his appointments

For one thing this is ultimately a Wall Street created mess aided by Bush's deregulation. Summers and Geithner might bare some degree of responsibility because of their role in repealing Glass-Stegall but that was one of the many factors that ultimately led to the situation that we are in.

Surely there are some academics somewhere that saw this whole mess coming before Gramm-Leach-Bliley was passed. But it seems that Obama would rather have people that have made mistakes and have learned from them rather than those who simply haven't made mistakes. I know that people are having a hard time accepting that because his entire case for voting for him over Hillary was judgment over experience.

But his message seems to be that he has judgment and he is the one who will be making the major decisions and he's picking his team based on who is best qualified to execute those decisions. That's a hard concept to wrap our heads around, particularly with economic policy, since Presidents tend to almost completely defer economic policy to the Treasury Secretary, especially this one.

[cyberpj]

23. thank you for a response to the actual question -

- also, after watching Obama's speech yesterday plus Rachel Maddow's show discussion I have a better feeling about it.

What I think now is that he will have new people join these people in discussions and pick their brains over just what's going on to help create a best way out of it.

[DCBob]

18. Obama's goal is to change America. The first step is to change people and their thinking.

I think anyone who has agreed to be on his team is on board with the Obama change mission. Lets give him a little time to show if he can actually pull this off. I think he can.

[BootinUp]

19. Its sad that the left is launching these pre-inauguration attacks

and it says to me that these writers doing it are not serious about solving problems with teamwork, in the spirit that Obama has brought forth with his campaign message and all.

[amborin]

24. The Nation is a reliable source

for probing, unbiased analysis

it's hard for some folks to realize just what Summers' appointment means

Summers has been a bad guy for decades now, espousing and implementing neo-liberal policies, and also recommending some truly reprehensible suggestions.

as one writer said, Summers should be handcuffed and jailed, not selected for a crucial position

same goes for Rubin and Geithner

why not select Shelia Bair????

she was one of those who predicted this debacle long before it occurred, and she fought to regulate various instruments and was ridiculed by the very folks who are now put back in charge

[w4rma]

25. Teamwork? Many of Obama's cabinet picks have consistantly fought *against* progressive policy for

over a decade. *Against*! There are many better choices than DLCers and Clinton retreads. Obama should be picking people who have proven themselves correct, not the ones who helped instigate the Second Great Depression.

[changemonger]

26. We all have the same concerns, but I think we should give Obama...

the benefit of the doubt.

He and his team deserve that benefit of the doubt for their brilliant campaign if nothing else.