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Who Are You and What Have You Done With the Community Organizer We Elected President? November 18, 2009

Posted by rogerhollander in Barack Obama, Economic Crisis.
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Published on Wednesday, November 18, 2009 by TruthDig.comby Robert Scheer

What’s up with Barack Obama? The candidate for change once promised to take on the powerful banking interests but is now doing their bidding. Finally, a leading Democrat, in this case Senate Banking Committee Chairman Chris Dodd, has a good idea for monitoring the Wall Street fat cats who all but destroyed the American economy, and the Obama administration condemns it.

Dodd wants to take supervisory power from the Federal Reserve, which is controlled by the banks it pretends to monitor, and put it in the hands of a new independent agency. That makes sense given the Fed’s abject failure to properly monitor the financial sector over the past decade as that industry got drunk on greed. As Dodd’s spokeswoman Kirstin Brost put it: “The Federal Reserve flat out failed at supervising the largest, most complex firms.” But White House economic adviser Austan Goolsbee frets that taking power from the Fed would cause financial industry “nervousness.” Isn’t that the whole point of government regulation-to make the bandits look over their shoulders before they launch their next destructive scam?

Not so in the view of Deputy Treasury Secretary Neal Wolin, who blithely insists that the Fed “is the best agency equipped for the task of supervising the largest, most complex firms,” despite the mountain of evidence to the contrary. There is some irony in the fact that the largest of those complex firms got to be “too big to fail” because of the radical deregulatory legislation that Wolin drafted during his previous incarnation as the Treasury Department’s general counsel in the Clinton administration. Wolin is now deputy to Timothy Geithner, who as head of the New York Fed in the five years preceding the banking meltdown looked the other way as the disaster began to unfold.

Why is Barack Obama allowing these retreads from the Clinton era who went on to great riches on Wall Street to set economic policy for his administration? The fatal hallmark of this president’s financial policy is that it is being designed by the very people whose previous legislative efforts created the mess that enriched them while impoverishing the nation, and they now want more of the same.

In the Clinton years, Wolin was general counsel to then-Treasury Secretary Lawrence Summers, the key architect of the radical deregulation that caused the recent banking collapse. Summers went off to work for hedge funds and banks that paid him $15 million in 2008 while he was advising Obama. Meanwhile, Wolin became general counsel for Hartford Insurance Corp., which had to be bailed out by the taxpayers because it took advantage of the radical deregulation that he helped write into law.

Wolin, Geithner and Summers were all protégés of Robert Rubin, who, as Clinton’s treasury secretary, was the grand author of the strategy of freeing Wall Street firms from their Depression-era constraints. It was Wolin who, at Rubin’s behest, became a key force in drafting the Gramm-Leach-Bliley Act, which ended the barrier between investment and commercial banks and insurance companies, thus permitting the new financial behemoths to become too big to fail. Two stunning examples of such giants that had to be rescued with public funds are Citigroup bank, where Rubin went to “earn” $120 million after leaving the Clinton White House, and the Hartford Insurance Co., where Wolin landed after he left Treasury.

Both Citigroup and Hartford would not have gotten into trouble were it not for the enabling legislation that the three Clinton officials pushed through while they were in power. But even with that law, had Geithner been on the case protecting the public interest while head of the New York Fed much of the damage could have been avoided.

Thanks to the legislation that Wolin helped write, the limits preventing mergers between insurance companies and banks imposed during Franklin Roosevelt’s presidency was reversed. Hartford got into banking, and as The Washington Times observed in a scathing editorial, “Hartford … rushed to buy regulated savings and loans just so they could call themselves banks and qualify for government TARP funds.” Wolin collected his millions while the taxpayers were obliged to cover Hartford’s losses.

It is depressing for a columnist who had great hopes for Obama to be forced by the facts to credit editors at the right-wing Washington Times for getting it right when they opined: “Revolving doors between industry and the administration and fat-cat political contributors getting bailed out at taxpayer expense sound like business as usual. This certainly isn’t change we can believe in.” Please, Mr. President, say it ain’t so.

© 2009 TruthDig.com

Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.

Obama a Very Smooth Liar June 18, 2009

Posted by rogerhollander in Barack Obama, Economic Crisis, Foreign Policy, Iraq and Afghanistan, Labor, War.
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(Roger’s note: this article only begins to touch on some of the major aspects of Obama’s phony “change” presidency.  What should be added are: the torture cover-up, the support for the Israeli massacre in Gaza, the broken promises to the Gay community, the regressive education policy, the tepid at best support for pro-choice, etc. etc.)
 
Published on Wednesday, June 17, 2009 by The Providence Journal

by John R. MacArthur

It isn’t quite fair to call Barack Obama a liar. During the campaign he carefully avoided committing to much of anything important that he might have to take back later. For now, I won’t quibble with The St. Petersburg Times’s Obamameter, which so far has the president keeping 30 promises and breaking only six.

And yet, broadly speaking, Obama has been lying on a pretty impressive scale. You just have to get past his grandiloquent rhetoric — usually empty of substance — to get a handle on it. I offer a short, incomplete list, which I’m sure others could easily enlarge.

  • Obama portrayed himself as the peace candidate, or at least the anti-war candidate. He is not a peace president, nor is he stopping any wars. True, he promised military escalation in Afghanistan (to blunt John McCain’s accusations of wimpishness), but well-meaning folks believed their new hero would genuinely move to end the occupation of Iraq and seriously try to negotiate with the Taliban. Instead, he has not only increased the number of troops and attacks against the Afghan insurgency, he has also expanded on George Bush’s cross-border raids into Pakistan, which have killed many civilians. The way things are going, Pakistan could become the new Cambodia and Obama the new Nixon.In Iraq, Obama has promised to withdraw all the troops . . . unless, which means that we’re not leaving. Whether it’s 50,000 troops remaining at the “invitation” of the so-called government of Iraq, or just enough to man the 14 permanent military bases, or some combination of U.S. military personnel and private mercenaries that exceeds 50,000 soldiers, our army will almost certainly stay in Iraq past the stated deadline of Jan. 1, 2012.
  • Obama said he wanted to reform Washington and “fix” its “broken” system of corrupt lobbying. But Obama is neither a reformer nor a skilled legislative mechanic. Hatched from the Daley Machine in one-party Chicago, Obama wouldn’t be president today if he rocked boats. Witness the appointment of Roland Burris by the corrupt former Gov. Rod Blagojevich to fill Obama’s Senate seat: not a word of public protest from the new administration because Burris is a made man in the Chicago Democratic organization. So what if “Tombstone Roland” can be heard on the U.S. attorney’s wiretaps of Blagojevich, dancing around the delicate question of how to raise money for Blago without appearing to be buying his seat.As for pork-barrel politics, Obama named one of its greatest champions, Chicago’s own Rahm Emanuel, as his chief of staff, and the new budget (as well as the “stimulus” package) is loaded with pork. Meanwhile, have you heard anything serious about campaign-finance reform from Obama? Not very likely from someone who refused public financing and still has about $10 million left over from record receipts of $745.7 million. It’s just a detail, I know, but Obama’s naming of former Raytheon lobbyist William Lynn III as deputy secretary of defense seems to be at odds with the president’s alleged crusade against special interests and the “revolving door” between private business and government. He has also “sold” ambassadorships to campaign donors. The biggest plum, London, is slated for Lou Susman, a Chicagoan and former Citigroup executive who bundled $239,000. Paris has been reserved for Charles Rivkin, who raised about $500,000 for Obama.
  • Obama, with his Arabic middle name and his big Cairo speech, wants people to think that he is the Muslim world’s new best friend. Well, the photograph of a cheery Obama with Saudi King Abdullah and a smiling Emanuel with Saudi Foreign Minister Saud al-Faisal, proves the contrary. The Saudi royal family hates the idea of representative government for ordinary Muslims and is cruelly indifferent to the fate of the Palestinians. A democratic, independent, partly secular Palestine could only make the Saudi oligarchy look bad. Thus, the House of Saud is perfectly happy with the status quo, and so, evidently, is Obama.Without Saudi pressure, there will be no resolution of the Israeli-Palestinian conflict, since Saudi oil is the only lever that would cause America to press Israel into making real concessions. Indeed, the president doesn’t mean for one minute to force Israel into anything more than symbolic withdrawals of its illegal settlements on the West Bank. Meanwhile, the Saudi elite continues to play its double game, paying protection money to extremist Islam and granting pensions to the relatives of suicide bombers. It’s just politics, say Barack and Rahm, grinning ear-to-ear with their sleazy new friends from Riyahd. Just keep the oil pumping around election time and all will be well.
  • Obama makes like he’s a friend of organized labor, at least he did during the Ohio primary when he needed to beat Hillary Clinton. At the time, he put out a flier headlined “Only Barack Obama fought NAFTA and other bad trade deals” and charged that “a little more than a year ago, Hillary Clinton thought NAFTA was a ‘boon’ to the economy.” In a debate with Clinton on Feb. 26, 2008, he said, “I will make sure that we renegotiate [NAFTA] in the same way that Senator Clinton talked about” and “use the hammer of a potential opt-out as leverage” to get “labor and environmental standards that are enforced.”But two months ago, U.S. Trade Rep. Ron Kirk said such a blunt instrument was no longer necessary and that the leaders of Canada, the U.S. and Mexico were now “of the mind that we should be looking for opportunities to strengthen [the North American Free Trade Agreement].” And, of course, there is no discussion at all about renegotiating Permanent Normal Trade Relations with China, a “bad trade deal” that has done even greater harm to American workers and unions than has NAFTA.

Meanwhile, as I noted in my April 15 column, “Wall Street sharks circle the UAW,” Obama and his banker friend Steven Rattner are liquidating the United Auto Workers even as they liquidate the American auto industry. Robert Reich, Bill Clinton’s pseudo-secretary of labor, said as much. “The only practical purpose I can imagine for the bailout is to slow the decline of GM to create enough time for its workers, suppliers, dealers and communities to adjust to its eventual demise,” he wrote last month in the Financial Times — no surprise, considering that Obama’s chief economic adviser remains Lawrence Summers, a champion of deregulation and “free-market” economics in the Clinton administration and very much the enemy of labor unions.

Yes, of course it’s nice to have a president who speaks in complete sentences. But that they’re coherent doesn’t make them honest. 

© 2009 The Providence Journal

John R. MacArthur, publisher of Harper’s Magazine. Among other books, he is the author of Second Front: Censorship and Propaganda in the Gulf War

Obama Preserves Entrenched Power, Sidesteps Racial Disparities May 12, 2009

Posted by rogerhollander in Barack Obama, Economic Crisis, Race.
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wong side
 
 
by BAR executive editor Glen Ford
Barack Obama actually said it: a truncated form of the hackneyed rich man’s expression, “a rising tide lifts all boats.” The cliché was a fixture of trickle-down Reaganics and the Bush I and II permutations, as well as the Clinton deregulationathon. Now Obama employs it to justify his refusal to offer any programs to “address historical and emerging racial disparities.” The twisted logic goes something like this: “The deeper Blacks sink into the abyss, the more they are eligible for general assistance – therefore, the Obama plan already contains everything African Americans need as a group, and will be of more use to them than to more advantaged groups.” Thus, the nation’s first Black President turns the misery index on its head.

 

Obama deploys the same twisted logic as generations of white, corporate politicians.”
In his own clichéd words, President Obama reveals himself to be, at best, ambivalent on the need to confront historical and current racial disparities in the United States. Behind the awesome hype and intellectual façade lies your garden variety corporate-bought politician whose worldview is no deeper than the shallowest catchphrase in long-discredited American economic discourse: a rising tide lifts all boats.
Widely believed to have been coined by President John Kennedy in defense of his support for a pork barrel project, the platitude was quickly embraced by every corporate shill touting schemes to make the rich richer, while ignoring the specific plights of the poor and oppressed. President Ronald Reagan’s “trickle-down” economics was justified by the imagined hydraulics of rising tides, as were the Bush I and II permutations. Bill Clinton’s administration let loose a tsunami of speculative tidal forces that finally came crashing down on the entire planet, last year, submerging African Americans in the deepest recesses of the muck. The mad bankster behind that rising tide was Clinton’s then-Treasury Secretary Robert Rubin, assisted by his protégé and successor, Larry Summers. The two are now the right lobes of Barack Obama’s economic brain, along with current Treasury Secretary Tim Geithner, another Rubin mentee.
Obama is reluctant to even acknowledge the greatly disproportionate damage inflicted on African Americans in the current crisis.”
Obama displayed his corporate colors (and trite bent of mind) at his 100th day press conference, April 29, in response to a pointed question by BET reporter Andre Showell. The brief interchange, which came near the end of the session, reveals the coreObama, a man who is reluctant to even acknowledge the greatly disproportionate damage inflicted on African Americans in the current crisis, and who offers nothing whatsoever to address historical and emerging racial disparities. The question and response bear repeating, in full:

SHOWELL: “As the entire nation tries to climb out of this deep recession, in communities of color, the circumstances are far worse. The black unemployment rate, as you know, is in the double digits. And in New York City, for example, the black unemployment rate for men is near 50 percent.
My question to you tonight is given this unique and desperate circumstance, what specific policies can you point to that will target these communities and what’s the timetable for us to see tangible results?”
OBAMA: “Well, keep in mind that every step we’re taking is designed to help all people. But folks who are most vulnerable are most likely to be helped because they need the most help.
So when we passed the Recovery Act, for example, and we put in place provisions that would extend unemployment insurance or allow you to keep your health insurance even if you’ve lost your job, that probably disproportionately impacted those communities that had lost their jobs. And unfortunately, the African-American community and the Latino community are probably over represented in those ranks.
When we put in place additional dollars for community health centers to ensure that people are still getting the help that they need, or we expand health insurance to millions more children through the children’s health insurance program, again, those probably disproportionately impact African-American and Latino families simply because they’re the ones who are most vulnerable. They have got higher rates of uninsured in their communities.
My general approach is that if the economy is strong, that it will lift all boats….”
So my general approach is that if the economy is strong, that it will lift all boats as long as it is also supported by, for example, strategies around college affordability and job training, tax cuts for working families as opposed to the wealthiest that level the playing field and ensure bottom-up economic growth.
And I’m confident that that will help the African-American community live out the American dream at the same time that it’s helping communities all across the country.”
No Pretense of a Racial Policy
So confident is Obama that his personal Blackness is all that is required to offset horrific realities such as New York City’s nearly 50 percent Black male non-participation in the formal job market – statistics from 2003 that have certainly worsened in the current crisis – he offers not a single programmatic response. Obama is quick to point out that his plan is “is designed to help all people” – another way of saying there’s nothing in it to address the specific problems of people of color.
Obama claims there is no need for specific programs.”
He deploys the same twisted logic as generations of white, corporate politicians, who pointed to Black overrepresentation on welfare rolls as proof of the government’s deep concern for African Americans. In fact, concentrated levels of public assistance, food stamps and unemployment checks are elements of the misery index that, especially when dramatically skewed by race, cry out for specific programs and policies of remediation. Obama claims there is no need for specific programs because “folks who are most vulnerable are most likely to be helped because they need the most help.” Thus, he turns logic and language on their heads. The deeper Blacks sink into the abyss, the more they are eligible for general assistance – therefore, the Obama plan already contains everything African Americans need as a group, and will be of more use to them than to more advantaged groups. According to this line of reasoning, the worse things get, the more responsive the Obama plan is. There’s no need to deal directly with the underlying causes of disproportionate misery, such as institutional racism.
Presidential Denial
Obama is not even willing to fully acknowledge that Blacks and Browns have actually suffered disproportionately in the meltdown. In three successive sentences, he three times uses the word “probably” to describe what are solid facts. African Americans have not “probably” lost a disproportionate amount of jobs – Obama’s own Labor Department figures show that to be the case, on top of previously existing, horrendous rates of structural unemployment.
African American children are not “probably” over-represented among those lacking health insurance. They are, in fact, disproportionately uninsured. Obama belatedly corrects himself on this point, but his reflexive reluctance to give voice to the glaring racial disparities that are fundamental markers of American life, is deeply disturbing.
President Obama served definitive notice that he has no intention of tackling structural racism.”
Then Obama drops his inane line that a strong economy “will lift all boats,” with the caveat that it be “supported by…strategies around college affordability and job training, tax cuts for working families as opposed to the wealthiest that level the playing field and ensure bottom-up economic growth.” Nothing there to deal with specific Black problems, which means they will remain “intractable” – a word used to describe conditions that the powerful refuse to ameliorate.
In 240 words, President Obama served definitive notice – for those who still didn’t get it – that he has no intention of tackling structural racism. Ever. That is his “general approach,” which should be understood as his principled position. The only change in the racial status quo we can expect from Obama has already happened: the integration of the White House.
The Big (Fat Cat) Picture
President Obama is consistent – consistently conservative, in the broad sense of the word. He is no more interested in reshaping U.S. society’s basic economic contours, than its racial ones. His consuming project is to resurrect the finance capitalist class through formulas conjured up by the denizens of his right brain lobe, Robert Rubin, Larry Summers, and Tim Geithner. Toward that end, something around $10 trillion of the national treasure has been committed. Every other project of domestic revitalization is subordinate, and ultimately expendable.
The Obama presidential bully pulpit is reserved for banking interests. As the Associated Press reported in the wake of Senate defeat of legislation that would have allowed hundreds of thousands of homeowners to escape foreclosure through bankruptcy – the “cram-down” bill dreaded by bankers – “Obama did little to pressure lawmakers” to support the measure, despite having endorsed the idea since campaign days. Moreover, “the bankruptcy option got only a tepid endorsement from Treasury Secretary Timothy Geithner,” who was busy trying to figure out how to take toxic securities off his banker friends’ books by providing public subsidies to private sharks that might be enticed to buy them. “As it became clear the bill would fail,” wrote the AP, “the administration did little to counter the aggressive lobbying by banks fighting the bill and focused its efforts instead on a more popular bill targeting credit card companies” – a very limited measure that is, as of this writing, in doubt.

The Obama presidential bully pulpit is reserved for banking interests.”

Obama insists that health care is one of his irreducible priorities. Yet he cuts supporters of single payer plans out of the loop to embrace congresspersons friendly to the insurance and pharmaceutical industries, who will ultimately sabotage his own jury-rigged health scheme. New York Democratic Sen. Charles Schumer is already scuttling the boat, with an industry-written alternative to the Obama plan. The kiss-of-death proposal would require any “public” health insurance program to operate precisely as if it were a private insurance plan, effectively negating its reason for being.
The lessen settles in, slowly. President Barack Obama’s administration is not only “race-neutral” – it is essentially change-neutral, as well.
BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com.

Thievery Under the TARP April 22, 2009

Posted by rogerhollander in Economic Crisis.
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by Robert Scheer

We are being robbed big-time, but you can’t say we haven’t been warned. Not after the release Tuesday of a scathing report by the Treasury Department’s special inspector general, who charged that the aptly named Troubled Asset Relief Fund bailout program is rife with mismanagement and potential for fraud. The IG’s office already has opened 20 criminal fraud investigations into the $700 billion program, which is now well on its way to a $3 trillion obligation, and the IG predicts many more are coming.

Special Inspector General Neil M. Barofsky charged that the TARP program from its inception was designed to trust the Wall Street recipients of the bailout funds to act responsibly on their own, without accountability to the government that gave them the money. 

He pointed to the example of AIG, which has acted as a conduit of funds to the banks it had insured without being required to tell the government what it is doing: “Failure to impose this requirement with respect to the injection of yet another $30 billion into AIG would not only be a failure of oversight, but could call into question the credibility of the government’s efforts.”

AIG is just one example in a bailout that has left the financial conglomerates unsupervised as they spend taxpayer money in what the report termed a government program of “unprecedented scope, scale and complexity,” putting the public and the Treasury Department in the dark as to how the money is being used by the very tycoons who got us into this mess. “The American people have a right to know how their tax dollars are being used,” Barofsky wrote in the report, which sharply criticized the government for failing to hold financial institutions accountable.

For all of its criticism of the original program, designed by the Bush administration, the report was equally severe in denouncing the Obama administration’s plan to partner with hedge funds and other private capital groups to buy up the “toxic” holdings of the banks. Charging that the plan carries “significant fraud risks,” the inspector general’s report pointed out that almost all of the risk in this new trillion-dollar plan is being borne by the taxpayers. The so-called private investors would be able to put up money they borrowed from the Fed through “nonrecourse” loans, meaning if the toxic assets purchased prove too toxic and the scheme failed, the private investors could just walk away without repaying the Fed for those loans.

The reason those loans may prove even more toxic than expected and the price paid by this government-underwritten partnership far too high is that the government is purchasing the most suspect of the banks’ mortgage packages. In addition, the plan is to accept at face value the evaluation of those packages by the very same credit-rating firms whose absurdly wrong estimates of the dollar worth of these securities helped create the problem that now haunts the world’s economy. “Arguably, the wholesale failure of the credit rating agencies to rate adequately such securities is at the heart of the securitization market collapse, if not the primary cause of the current credit crisis,” the report found.

As with the entire banking bailout, the new plan of Obama’s treasury secretary, Timothy Geithner, is likely to enrich the very folks who impoverished the rest of us, as the report notes: “The significant government-financed leverage presents a great incentive for collusion between the buyer and seller of the asset, or the buyer and other buyers, whereby, once again, the taxpayer takes a significant loss while others profit.”

At the heart of this potentially massive fraud was the original decision of Henry Paulson, President Bush’s treasury secretary and a former Goldman Sachs chairman, to not require the recipients of the bailout, such as his old firm, to account for how the money was spent. Unfortunately, President Obama’s administration continued that practice. 

The only difference is that the amount of public money being put at risk is now far greater, and the hedge funds, which are totally unregulated, have been brought in as the central players. One of the largest of those hedge funds, D.E. Shaw, carried Obama’s top economic adviser, Lawrence Summers, on its payroll to the tune of $5.2 million last year. He may have reason to trust these secretive enterprises that operate beyond the law, but the public does not.

Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.

Bill Moyers Journal: William K. Black Interview April 16, 2009

Posted by rogerhollander in Uncategorized.
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william-black
Bill Moyers Journal, April 3, 2009
The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout

BILL MOYERS: Welcome to the Journal.

For months now, revelations of the wholesale greed and blatant transgressions of Wall Street have reminded us that “The Best Way to Rob a Bank Is to Own One.” In fact, the man you’re about to meet wrote a book with just that title. It was based upon his experience as a tough regulator during one of the darkest chapters in our financial history: the savings and loan scandal in the late 1980s.

WILLIAM K. BLACK: These numbers as large as they are, vastly understate the problem of fraud.

BILL MOYERS: Bill Black was in New York this week for a conference at the John Jay College of Criminal Justice where scholars and journalists gathered to ask the question, “How do they get away with it?” Well, no one has asked that question more often than Bill Black.

The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L’s in exchange for contributions and other perks. The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate’s so-called “Keating Five” were named — he sent a memo that read, in part, “get Black — kill him dead.” Metaphorically, of course. Of course.

Now Black is focused on an even greater scandal, and he spares no one — not even the President he worked hard to elect, Barack Obama. But his main targets are the Wall Street barons, heirs of an earlier generation whose scandalous rip-offs of wealth back in the 1930s earned them comparison to Al Capone and the mob, and the nickname “banksters.”

Bill Black, welcome to the Journal.

WILLIAM K. BLACK: Thank you.

BILL MOYERS: I was taken with your candor at the conference here in New York to hear you say that this crisis we’re going through, this economic and financial meltdown is driven by fraud. What’s your definition of fraud?

WILLIAM K. BLACK: Fraud is deceit. And the essence of fraud is, “I create trust in you, and then I betray that trust, and get you to give me something of value.” And as a result, there’s no more effective acid against trust than fraud, especially fraud by top elites, and that’s what we have.

BILL MOYERS: In your book, you make it clear that calculated dishonesty by people in charge is at the heart of most large corporate failures and scandals, including, of course, the S&L, but is that true? Is that what you’re saying here, that it was in the boardrooms and the CEO offices where this fraud began?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: How did they do it? What do you mean?

WILLIAM K. BLACK: Well, the way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you’re a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there’s going to be a disaster down the road.

BILL MOYERS: So you’re suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans?

WILLIAM K. BLACK: Yes.

BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions?

WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that.

BILL MOYERS: If I wanted to go looking for the parties to this, with a good bird dog, where would you send me?

WILLIAM K. BLACK: Well, that’s exactly what hasn’t happened. We haven’t looked, all right? The Bush Administration essentially got rid of regulation, so if nobody was looking, you were able to do this with impunity and that’s exactly what happened. Where would you look? You’d look at the specialty lenders. The lenders that did almost all of their work in the sub-prime and what’s called Alt-A, liars’ loans.

BILL MOYERS: Yeah. Liars’ loans–

WILLIAM K. BLACK: Liars’ loans.

BILL MOYERS: Why did they call them liars’ loans?

WILLIAM K. BLACK: Because they were liars’ loans.

BILL MOYERS: And they knew it?

WILLIAM K. BLACK: They knew it. They knew that they were frauds.

WILLIAM K. BLACK: Liars’ loans mean that we don’t check. You tell us what your income is. You tell us what your job is. You tell us what your assets are, and we agree to believe you. We won’t check on any of those things. And by the way, you get a better deal if you inflate your income and your job history and your assets.

BILL MOYERS: You think they really said that to borrowers?

WILLIAM K. BLACK: We know that they said that to borrowers. In fact, they were also called, in the trade, ninja loans.

BILL MOYERS: Ninja?

WILLIAM K. BLACK: Yeah, because no income verification, no job verification, no asset verification.

BILL MOYERS: You’re talking about significant American companies.

WILLIAM K. BLACK: Huge! One company produced as many losses as the entire Savings and Loan debacle.

BILL MOYERS: Which company?

WILLIAM K. BLACK: IndyMac specialized in making liars’ loans. In 2006 alone, it sold $80 billion dollars of liars’ loans to other companies. $80 billion.

BILL MOYERS: And was this happening exclusively in this sub-prime mortgage business?

WILLIAM K. BLACK: No, and that’s a big part of the story as well. Even prime loans began to have non-verification. Even Ronald Reagan, you know, said, “Trust, but verify.” They just gutted the verification process. We know that will produce enormous fraud, under economic theory, criminology theory, and two thousand years of life experience.

BILL MOYERS: Is it possible that these complex instruments were deliberately created so swindlers could exploit them?

WILLIAM K. BLACK: Oh, absolutely. This stuff, the exotic stuff that you’re talking about was created out of things like liars’ loans, that were known to be extraordinarily bad. And now it was getting triple-A ratings. Now a triple-A rating is supposed to mean there is zero credit risk. So you take something that not only has significant, it has crushing risk. That’s why it’s toxic. And you create this fiction that it has zero risk. That itself, of course, is a fraudulent exercise. And again, there was nobody looking, during the Bush years. So finally, only a year ago, we started to have a Congressional investigation of some of these rating agencies, and it’s scandalous what came out. What we know now is that the rating agencies never looked at a single loan file. When they finally did look, after the markets had completely collapsed, they found, and I’m quoting Fitch, the smallest of the rating agencies, “the results were disconcerting, in that there was the appearance of fraud in nearly every file we examined.”

BILL MOYERS: So if your assumption is correct, your evidence is sound, the bank, the lending company, created a fraud. And the ratings agency that is supposed to test the value of these assets knowingly entered into the fraud. Both parties are committing fraud by intention.

WILLIAM K. BLACK: Right, and the investment banker that — we call it pooling — puts together these bad mortgages, these liars’ loans, and creates the toxic waste of these derivatives. All of them do that. And then they sell it to the world and the world just thinks because it has a triple-A rating it must actually be safe. Well, instead, there are 60 and 80 percent losses on these things, because of course they, in reality, are toxic waste.

BILL MOYERS: You’re describing what Bernie Madoff did to a limited number of people. But you’re saying it’s systemic, a systemic Ponzi scheme.

WILLIAM K. BLACK: Oh, Bernie was a piker. He doesn’t even get into the front ranks of a Ponzi scheme…

BILL MOYERS: But you’re saying our system became a Ponzi scheme.

WILLIAM K. BLACK: Our system…

BILL MOYERS: Our financial system…

WILLIAM K. BLACK: Became a Ponzi scheme. Everybody was buying a pig in the poke. But they were buying a pig in the poke with a pretty pink ribbon, and the pink ribbon said, “Triple-A.”

BILL MOYERS: Is there a law against liars’ loans?

WILLIAM K. BLACK: Not directly, but there, of course, many laws against fraud, and liars’ loans are fraudulent.

BILL MOYERS: Because…

WILLIAM K. BLACK: Because they’re not going to be repaid and because they had false representations. They involve deceit, which is the essence of fraud.

BILL MOYERS: Why is it so hard to prosecute? Why hasn’t anyone been brought to justice over this?

WILLIAM K. BLACK: Because they didn’t even begin to investigate the major lenders until the market had actually collapsed, which is completely contrary to what we did successfully in the Savings and Loan crisis, right? Even while the institutions were reporting they were the most profitable savings and loan in America, we knew they were frauds. And we were moving to close them down. Here, the Justice Department, even though it very appropriately warned, in 2004, that there was an epidemic…

BILL MOYERS: Who did?

WILLIAM K. BLACK: The FBI publicly warned, in September 2004 that there was an epidemic of mortgage fraud, that if it was allowed to continue it would produce a crisis at least as large as the Savings and Loan debacle. And that they were going to make sure that they didn’t let that happen. So what goes wrong? After 9/11, the attacks, the Justice Department transfers 500 white-collar specialists in the FBI to national terrorism. Well, we can all understand that. But then, the Bush administration refused to replace the missing 500 agents. So even today, again, as you say, this crisis is 1000 times worse, perhaps, certainly 100 times worse, than the Savings and Loan crisis. There are one-fifth as many FBI agents as worked the Savings and Loan crisis.

BILL MOYERS: You talk about the Bush administration. Of course, there’s that famous photograph of some of the regulators in 2003, who come to a press conference with a chainsaw suggesting that they’re going to slash, cut business loose from regulation, right?

WILLIAM K. BLACK: Well, they succeeded. And in that picture, by the way, the other — three of the other guys with pruning shears are the…

BILL MOYERS: That’s right.

WILLIAM K. BLACK: They’re the trade representatives. They’re the lobbyists for the bankers. And everybody’s grinning. The government’s working together with the industry to destroy regulation. Well, we now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80.

BILL MOYERS: But I can point you to statements by Larry Summers, who was then Bill Clinton’s Secretary of the Treasury, or the other Clinton Secretary of the Treasury, Rubin. I can point you to suspects in both parties, right?

WILLIAM K. BLACK: There were two really big things, under the Clinton administration. One, they got rid of the law that came out of the real-world disasters of the Great Depression. We learned a lot of things in the Great Depression. And one is we had to separate what’s called commercial banking from investment banking. That’s the Glass-Steagall law. But we thought we were much smarter, supposedly. So we got rid of that law, and that was bipartisan. And the other thing is we passed a law, because there was a very good regulator, Brooksley Born, that everybody should know about and probably doesn’t. She tried to do the right thing to regulate one of these exotic derivatives that you’re talking about. We call them C.D.F.S. And Summers, Rubin, and Phil Gramm came together to say not only will we block this particular regulation. We will pass a law that says you can’t regulate. And it’s this type of derivative that is most involved in the AIG scandal. AIG all by itself, cost the same as the entire Savings and Loan debacle.

BILL MOYERS: What did AIG contribute? What did they do wrong?

WILLIAM K. BLACK: They made bad loans. Their type of loan was to sell a guarantee, right? And they charged a lot of fees up front. So, they booked a lot of income. Paid enormous bonuses. The bonuses we’re thinking about now, they’re much smaller than these bonuses that were also the product of accounting fraud. And they got very, very rich. But, of course, then they had guaranteed this toxic waste. These liars’ loans. Well, we’ve just gone through why those toxic waste, those liars’ loans, are going to have enormous losses. And so, you have to pay the guarantee on those enormous losses. And you go bankrupt. Except that you don’t in the modern world, because you’ve come to the United States, and the taxpayers play the fool. Under Secretary Geithner and under Secretary Paulson before him… we took $5 billion dollars, for example, in U.S. taxpayer money. And sent it to a huge Swiss Bank called UBS. At the same time that that bank was defrauding the taxpayers of America. And we were bringing a criminal case against them. We eventually get them to pay a $780 million fine, but wait, we gave them $5 billion. So, the taxpayers of America paid the fine of a Swiss Bank. And why are we bailing out somebody who that is defrauding us?

BILL MOYERS: And why…

WILLIAM K. BLACK: How mad is this?

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 masses 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: But he denies that he was a regulator. Let me show you some of his testimony before Congress. Take a look at this.

TIMOTHY GEITHNER:I’ve never been a regulator, for better or worse. And I think you’re right to say that we have to be very skeptical that regulation can solve all of these problems. We have parts of our system that are overwhelmed by regulation.

Overwhelmed by regulation! It wasn’t the absence of regulation that was the problem, it was despite the presence of regulation you’ve got huge risks that build up.

WILLIAM K. BLACK: Well, he may be right that he never regulated, but his job was to regulate. That was his mission statement.

BILL MOYERS: As?

WILLIAM K. BLACK: As president of the Federal Reserve Bank of New York, which is responsible for regulating most of the largest bank holding companies in America. And he’s completely wrong that we had too much regulation in some of these areas. I mean, he gives no details, obviously. But that’s just plain wrong.

BILL MOYERS: How is this happening? I mean why is it happening?

WILLIAM K. BLACK: Until you get the facts, it’s harder to blow all this up. And, of course, the entire strategy is to keep people from getting the facts.

BILL MOYERS: What facts?

WILLIAM K. BLACK: The facts about how bad the condition of the banks is. So, as long as I keep the old CEO who caused the problems, is he going to go vigorously around finding the problems? Finding the frauds?

BILL MOYERS: You–

WILLIAM K. BLACK: Taking away people’s bonuses?

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.

BILL MOYERS: In other words, they could have closed these banks without nationalizing them?

WILLIAM K. BLACK: Well, you do a receivership. No one — Ronald Reagan did receiverships. Nobody called it nationalization.

BILL MOYERS: And that’s a law?

WILLIAM K. BLACK: That’s the law.

BILL MOYERS: So, Paulson could have done this? Geithner could do this?

WILLIAM K. BLACK: Not could. Was mandated–

BILL MOYERS: By the law.

WILLIAM K. BLACK: By the law.

BILL MOYERS: This law, you’re talking about.

WILLIAM K. BLACK: Yes.

BILL MOYERS: What the reason they give for not doing it?

WILLIAM K. BLACK: They ignore it. And nobody calls them on it.

BILL MOYERS: Well, where’s Congress? Where’s the press? Where–

WILLIAM K. BLACK: Well, where’s the Pecora investigation?

BILL MOYERS: The what?

WILLIAM K. BLACK: The Pecora investigation. The Great Depression, we said, “Hey, we have to learn the facts. What caused this disaster, so that we can take steps, like pass the Glass-Steagall law, that will prevent future disasters?” Where’s our investigation?

What would happen if after a plane crashes, we said, “Oh, we don’t want to look in the past. We want to be forward looking. Many people might have been, you know, we don’t want to pass blame. No. We have a nonpartisan, skilled inquiry. We spend lots of money on, get really bright people. And we find out, to the best of our ability, what caused every single major plane crash in America. And because of that, aviation has an extraordinarily good safety record. We ought to follow the same policies in the financial sphere. We have to find out what caused the disasters, or we will keep reliving them. And here, we’ve got a double tragedy. It isn’t just that we are failing to learn from the mistakes of the past. We’re failing to learn from the successes of the past.

BILL MOYERS: What do you mean?

WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn’t matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, “You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you’re covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn’t work. You will cause your recession to continue and continue.” And the Japanese call it the lost decade. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It’s working just as well as it did in Japan.

BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: You are.

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They’re scared to death of a collapse. They’re afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we’ll run screaming to the exits. And we won’t rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it’s foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, “We just can’t let the big banks fail.” That’s wrong.

BILL MOYERS: But what might happen, at this point, if in fact they keep from us the true health of the banks?

WILLIAM K. BLACK: Well, then the banks will, as they did in Japan, either stay enormously weak, or Treasury will be forced to increasingly absurd giveaways of taxpayer money. We’ve seen how horrific AIG — and remember, they kept secrets from everyone.

BILL MOYERS: A.I.G. did?

WILLIAM K. BLACK: What we’re doing with — no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson’s firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn’t want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG.

Where Congress said, “We will not give you a single penny more unless we know who received the money.” And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it.

BILL MOYERS: Even though Goldman Sachs had a big vested stake.

WILLIAM K. BLACK: Massive stake. And even though he had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now, in most stages in American history, that would be a scandal of such proportions that he wouldn’t be allowed in civilized society.

BILL MOYERS: Yeah, like a conflict of interest, it seems.

WILLIAM K. BLACK: Massive conflict of interests.

BILL MOYERS: So, how did he get away with it?

WILLIAM K. BLACK: I don’t know whether we’ve lost our capability of outrage. Or whether the cover up has been so successful that people just don’t have the facts to react to it.

BILL MOYERS: Who’s going to get the facts?

WILLIAM K. BLACK: We need some chairmen or chairwomen–

BILL MOYERS: In Congress.

WILLIAM K. BLACK: –in Congress, to hold the necessary hearings. And we can blast this out. But if you leave the failed CEOs in place, it isn’t just that they’re terrible business people, though they are. It isn’t just that they lack integrity, though they do. Because they were engaged in these frauds. But they’re not going to disclose the truth about the assets.

BILL MOYERS: And we have to know that, in order to know what?

WILLIAM K. BLACK: To know everything. To know who committed the frauds. Whose bonuses we should recover. How much the assets are worth. How much they should be sold for. Is the bank insolvent, such that we should resolve it in this way? It’s the predicate, right? You need to know the facts to make intelligent decisions. And they’re deliberately leaving in place the people that caused the problem, because they don’t want the facts. And this is not new. The Reagan Administration’s central priority, at all times, during the Savings and Loan crisis, was covering up the losses.

BILL MOYERS: So, you’re saying that people in power, political power, and financial power, act in concert when their own behinds are in the ringer, right?

WILLIAM K. BLACK: That’s right. And it’s particularly a crisis that brings this out, because then the class of the banker says, “You’ve got to keep the information away from the public or everything will collapse. If they understand how bad it is, they’ll run for the exits.”

BILL MOYERS: Yeah, and this week in New York, at this conference, you described this as more than a financial crisis. You called it a moral crisis.

WILLIAM K. BLACK: Yes.

BILL MOYERS: Why?

WILLIAM K. BLACK: Because it is a fundamental lack of integrity. But also because, if you look back at crises, an economist who is also a presidential appointee, as a regulator in the Savings and Loan industry, right here in New York, Larry White, wrote a book about the Savings and Loan crisis. And he said, you know, one of the most interesting questions is why so few people engaged in fraud? Because objectively, you could have gotten away with it. But only about ten percent of the CEOs, engaged in fraud. So, 90 percent of them were restrained by ethics and integrity. So, far more than law or by F.B.I. agents, it’s our integrity that often prevents the greatest abuses. And what we had in this crisis, instead of the Savings and Loan, is the most elite institutions in America engaging or facilitating fraud.

BILL MOYERS: This wound that you say has been inflicted on American life. The loss of worker’s income. And security and pensions and future happened, because of the misconduct of a relatively few, very well-heeled people, in very well-decorated corporate suites, right?

WILLIAM K. BLACK: Right.

BILL MOYERS: It was relatively a handful of people.

WILLIAM K. BLACK: And their ideologies, which swept away regulation. So, in the example, regulation means that cheaters don’t prosper. So, instead of being bad for capitalism, it’s what saves capitalism. “Honest purveyors prosper” is what we want. And you need regulation and law enforcement to be able to do this. The tragedy of this crisis is it didn’t need to happen at all.

BILL MOYERS: When you wake in the middle of the night, thinking about your work, what do you make of that? What do you tell yourself?

WILLIAM K. BLACK: There’s a saying that we took great comfort in. It’s actually by the Dutch, who were fighting this impossible war for independence against what was then the most powerful nation in the world, Spain. And their motto was, “It is not necessary to hope in order to persevere.”

Now, going forward, get rid of the people that have caused the problems. That’s a pretty straightforward thing, as well. Why would we keep CEOs and CFOs and other senior officers, that caused the problems? That’s facially nuts. That’s our current system.

So stop that current system. We’re hiding the losses, instead of trying to find out the real losses. Stop that, because you need good information to make good decisions, right? Follow what works instead of what’s failed. Start appointing people who have records of success, instead of records of failure. That would be another nice place to start. There are lots of things we can do. Even today, as late as it is. Even though they’ve had a terrible start to the administration. They could change, and they could change within weeks. And by the way, the folks who are the better regulators, they paid their taxes. So, you can get them through the vetting process a lot quicker.

BILL MOYERS: William Black, thank you very much for being with me on the Journal.

WILLIAM K. BLACK: Thank you so much.

William K. Black suspects that it was more than greed and incompetence that brought down the U.S. financial sector and plunged the economy in recession — it was fraud. And he would know. When it comes to financial shenanigans, William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s, has seen pretty much everything.

Now an Associate Professor of Economics and Law at the University of Missouri, William K. Black tells Bill Moyers on the JOURNAL that the tool at the very center of mortgage collapse, creating triple-A rated bonds out of “liars’ loans” — loans issued without verifying income, assets or employment — was a fraud, and the banks knew it.

And while there is no law against liars’ loans, Black points out that there are, “many laws against fraud, and liars’ loans are fraudulent. [...] They involve deceit, which is the essence of fraud.”

Only the scale of the scandal is new. A single bank, IndyMac, lost more money than the entire Savings and Loan Crisis. The difference between now and then, explains Black, is a drastic reduction in regulation and oversight, “We now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80.”

>>More about the Savings and Loan Crisis

Biography

William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri — Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black developed the concept of “control fraud” — frauds in which the CEO or head of state uses the entity as a “weapon.” Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae’s former senior management.

Published April 3, 2009. Guest photos by Robin Holland

Larry Summers, Tim Geithner and Wall Street’s Ownership of Government April 5, 2009

Posted by rogerhollander in Barack Obama, Economic Crisis.
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by Glenn Greenwald

White House officials yesterday released their personal financial disclosure forms, and included in the millions of dollars which top Obama economics adviser Larry Summers made from Wall Street in 2008 is this detail:

Lawrence H. Summers, one of President Obama’s top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations. . . .

Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.

That’s $135,000 paid by Goldman Sachs to Summers — for a one-day visit.  And the payment was made at a time — in April, 2008 — when everyone assumed that the next President would either be Barack Obama or Hillary Clinton and that Larry Summers would therefore become exactly what he now is:  the most influential financial official in the U.S. Government (and the $45,000 Merrill Lynch payment came 8 days after Obama’s election). Goldman would not be able to make a one-day $135,000 payment to Summers now that he is Obama’s top economics adviser, but doing so a few months beforehand was obviously something about which neither parties felt any compunction.  It’s basically an advanced bribe.  And it’s paying off in spades.  And none of it seemed to bother Obama in the slightest when he first strongly considered naming Summers as Treasury Secretary and then named him his top economics adviser instead (thereby avoiding the need for Senate confirmation), knowing that Summers would exert great influence in determining who benefited from the government’s response to the financial crisis.

Last night, former Reagan-era S&L regulator and current University of Missouri Professor Bill Black was on Bill Moyers’ Journal and detailed the magnitude of what he called the on-going massive fraud, the role Tim Geithner played in it before being promoted to Treasury Secretary (where he continues to abet it), and — most amazingly of all — the crusade led by Alan Greenspan, former Goldman CEO Robert Rubin (Geithner’s mentor) and Larry Summers in the late 1990s to block the efforts of top regulators (especially Brooksley Born, head of the Commodities Futures Trading Commission) to regulate the exact financial derivatives market that became the principal cause of the global financial crisis.  To get a sense for how deep and massive is the on-going fraud and the key role played in it by key Obama officials, I highly recommend watching that Black interview (it can be seen here and the transcript is here).

This article from Stanford Magazine — an absolutely amazing read — details how Summers, Rubin and Greenspan led the way in blocking any regulatory efforts of the derivatives market whatsoever on the ground that the financial industry and its lobbyists were objecting:

As chairperson of the CFTC, Born advocated reining in the huge and growing market for financial derivatives. . . . One type of derivative—known as a credit-default swap—has been a key contributor to the economy’s recent unraveling. . .

Back in the 1990s, however, Born’s proposal stirred an almost visceral response from other regulators in the Clinton administration, as well as members of Congress and lobbyists. . . . But even the modest proposal got a vituperative response. The dozen or so large banks that wrote most of the OTC derivative contracts saw the move as a threat to a major profit center. Greenspan and his deregulation-minded brain trust saw no need to upset the status quo. The sheer act of contemplating regulation, they maintained, would cause widespread chaos in markets around the world.

Born recalls taking a phone call from Lawrence Summers, then Rubin’s top deputy at the Treasury Department, complaining about the proposal, and mentioning that he was taking heat from industry lobbyists. . . . The debate came to a head April 21, 1998. In a Treasury Department meeting of a presidential working group that included Born and the other top regulators, Greenspan and Rubin took turns attempting to change her mind. Rubin took the lead, she recalls.

“I was told by the secretary of the treasury that the CFTC had no jurisdiction, and for that reason and that reason alone, we should not go forward,” Born says. . . . “It seemed totally inexplicable to me,” Born says of the seeming disinterest her counterparts showed in how the markets were operating. “It was as though the other financial regulators were saying, ‘We don’t want to know.’”

She formally launched the proposal on May 7, and within hours, Greenspan, Rubin and Levitt issued a joint statement condemning Born and the CFTC, expressing “grave concern about this action and its possible consequences.” They announced a plan to ask for legislation to stop the CFTC in its tracks.

Rubin, Summers and Greenspan succeeded in inducing Congress — funded, of course, by these same financial firms — to enact legislation blocking the CFTC from regulating these derivative markets.  More amazingly still, the CFTC, headed back then by Born, is now headed by Obama appointee Gary Gensler, a former Goldman Sachs executive (naturally) who was as instrumental as anyone in blocking any regulations of those derivative markets (and then enriched himself by feeding on those unregulated markets).

Just think about how this works.  People like Rubin, Summers and Gensler shuffle back and forth from the public to the private sector and back again, repeatedly switching places with their GOP counterparts in this endless public/private sector looting.  When in government, they ensure that the laws and regulations are written to redound directly to the benefit of a handful of Wall St. firms, literally abolishing all safeguards and allowing them to pillage and steal.  Then, when out of government, they return to those very firms and collect millions upon millions of dollars, profits made possible by the laws and regulations they implemented when in government.  Then, when their party returns to power, they return back to government, where they continue to use their influence to ensure that the oligarchical circle that rewards them so massively is protected and advanced.  This corruption is so tawdry and transparent — and it has fueled and continues to fuel a fraud so enormous and destructive as to be unprecedented in both size and audacity — that it is mystifying that it is not provoking more mass public rage.

All of that leads to things like this, from today’s Washington Post:

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. . . .

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. . . .

In one program, designed to restart small-business lending, President Obama’s officials are planning to set up a middleman called a special-purpose vehicle — a term made notorious during the Enron scandal — or another type of entity to evade the congressional mandates, sources familiar with the matter said.

If that isn’t illegal, it is as close to it as one can get.  And it is a blatant attempt by the White House to brush aside — circumvent and violate — the spirit if not the letter of Congressional restrictions on executive pay for TARP-receiving firms.  It was Obama, in the wake of various scandals over profligate spending by TARP firms, who pretended to ride the wave of populist anger and to lead the way in demanding limits on compensation.  And ever since his flamboyant announcement, Obama — adopting the same approach that seems to drive him in most other areas — has taken one step after the next to gut and render irrelevant the very compensation limits he publicly pretended to champion (thereafter dishonestly blaming Chris Dodd for doing so and virtually destroying Dodd’s political career).   And the winners — as always — are the same Wall St. firms that caused the crisis in the first place while enriching and otherwise co-opting the very individuals Obama chose to be his top financial officials.

Worse still, what is happening here is an exact analog to what is happening in the realm of Bush war crimes — the Obama administration’s first priority is to protect the wrongdoers and criminals by ensuring that the criminality remains secret.  Here is how Black explained it last night:

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 masses 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…

Moyers:  What do you mean?

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. . . .

The Great Depression, we said, “Hey, we have to learn the facts. What caused this disaster, so that we can take steps, like pass the Glass-Steagall law, that will prevent future disasters?” Where’s our investigation?

What would happen if after a plane crashes, we said, “Oh, we don’t want to look in the past. We want to be forward looking. Many people might have been, you know, we don’t want to pass blame. No. We have a nonpartisan, skilled inquiry. We spend lots of money on, get really bright people. And we find out, to the best of our ability, what caused every single major plane crash in America. And because of that, aviation has an extraordinarily good safety record. We ought to follow the same policies in the financial sphere. We have to find out what caused the disasters, or we will keep reliving them. . . .

Moyers: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?

Black: Absolutely.

Moyers: You are.

Black: Absolutely, because they are scared to death. . . . What we’re doing with — no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson’s firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn’t want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG.

Where Congress said, “We will not give you a single penny more unless we know who received the money.” And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it.

Moyers: Even though Goldman Sachs had a big vested stake.

Black: Massive stake. And even though he had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now, in most stages in American history, that would be a scandal of such proportions that he wouldn’t be allowed in civilized society.

This is exactly what former IMF Chief Economist Simon Johnson warned about in his vital Atlantic article:  “that the finance industry has effectively captured our government — a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises.”   This is the key passage where Johnson described the hallmark of how corrupt oligarchies that cause financial crises then attempt to deal with the fallout:

Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or—here’s a classic Kremlin bailout technique — the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk—at least until the riots grow too large. . . .

As much as he campaigned against anything, Obama railed against precisely this sort of incestuous, profoundly corrupt control by narrow private interests of the Government, yet he has chosen to empower the very individuals who most embody that corruption.  And the results are exactly what one would expect them to be.

Glenn Greenwald was previously a constitutional law and civil rights litigator in New York. He is the author of the New York Times Bestselling book “How Would a Patriot Act?,” a critique of the Bush administration’s use of executive power, released in May 2006. His second book, “A Tragic Legacy“, examines the Bush legacy.

In for a Penny, In for $2.98 Trillion April 1, 2009

Posted by rogerhollander in Economic Crisis.
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Posted on Mar 31, 2009, www.truthdig.com
toxic schmoxic
AP photo / Mary Altaffer

Toxic schmoxic: The ABC news ticker in New York’s Times Square on March 23, a day when the Dow average surged nearly 500 points.

By Robert Scheer

The good news on the government’s “No Banker Left Behind” program is that according to the special inspector general’s report on Tuesday, the total handout to date is still less than 3 trillion dollars. It’s only 2.98 trillion to be precise, an amount six times greater than will be spent by federal, state and local governments this year on educating the 50 million American children in elementary and secondary schools. 

The bad news is that even greater amounts of money are to be thrown down what has to be the world record for rat holes.

Where did the money go? Almost all of it went to the bankers and stockbrokers who got us into this mess by insisting that the complex-by-design derivatives they trafficked in should not be regulated by government since they were private transactions between consenting professionals. Sort of like a lap dance: If it doesn’t work out, that’s the problem of the parties involved and no concern of the government. 

For the government to intervene would have created “legal uncertainty” in the derivatives market, an argument that a Republican-dominated Congress and President Clinton bought in authorizing the Commodity Futures Modernization Act in December of 2000. That law brought “legal certainty” to the market, a phrase that Lawrence Summers, then Clinton’s secretary of the treasury and now Barack Obama’s top White House economics adviser, deployed incessantly as a calming mantra as the financial derivatives market swirled out of control.

Now Summers and the other finance gurus who move so easily from Wall Street to Pennsylvania Avenue assure us that those professionals who made the toxic swap deals are too big to fail and must be entrusted with 3 trillion of our dollars to save themselves from disaster. And thanks to the laws they wrote, the bankers are likely to be covered for their socially destructive behavior by a get-out-of-jail-free card.

Well, maybe not all of them. A shudder must have run through the former Wall Street buddies of Bernie Madoff—once the highly respected chairman of the Nasdaq stock exchange—when Inspector General Neil Barofsky warned on Tuesday that “we are looking at the potential exposure of hundreds of billions of dollars in taxpayer money lost to fraud.”

How naive. The fraud no doubt has occurred and will occur again, but the exposure part is more questionable, if by that is meant bringing the criminals to account. As opposed to welfare cheats who end up imprisoned over scams that involve hundreds of dollars, these guys have brilliant lawyers who tell them how to steal legally when it comes to billions in fraud.

But most likely the white-collar criminals, if they are high enough up the food chain, will not even be quizzed about their activities. As the independent Congressional Oversight Panel has reported, there has been no serious accounting of the bailout money. It took major pressure from a Congress reacting to an outraged public to discover that AIG, in addition to handing out hundreds of millions in bonuses to the very hustlers who created the firm’s swindles, was a conduit for at least $70 billion in taxpayer money to reimburse the banks and stockbrokers who got us into this crisis with their bad bets. 

No surprise there, given the incestuous world of finance, where the revolving doors between the Treasury Department, the Fed and executive offices in the industry have been swinging throughout both Republican and Democratic administrations. As a result, those orchestrating the bailout and those grabbing the money are for the most part friends and former colleagues, with enormous respect for each other but not for the American taxpayer and homeowner. Or for the autoworkers who had nothing to do with creating this problem but stand to lose their retiree health benefits and pensions if the Obama administration goes though with its threat to use bankruptcy to discharge GM and Chrysler from their obligations to their workers.  Why float a company like AIG to the tune of $170 billion to keep that massive conglomerate from bankruptcy but balk at a much smaller commitment to keep GM solvent?

The money involved in the auto bailout is chump change compared with what Wall Street got, and it is far better spent. As opposed to the financial high rollers richly rewarded for crawling in and out of balance sheets, the folks who crawl in and out of cars along an assembly line are left with permanent aching backs and hard-won health care and retirement plans about to disappear through their company’s bankruptcy. Where’s their bonus package? 

A Team of Zombies February 6, 2009

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Feb 6, 2009, www.truthdig.com

By David Sirota

Only weeks ago, the political world was buzzing about a “team of rivals.” America was told that finally, after years of yes-men running the government, we were getting a president who would follow Abraham Lincoln’s lead, fill his administration with varying viewpoints, and glean empirically sound policy from the clash of ideas. Little did we know that “team of rivals” was what George Orwell calls “newspeak”: an empty slogan “claiming that black is white, in contradiction of the plain facts.”

Obama’s national security team, for instance, includes not a single Iraq war opponent. The president has not only retained George W. Bush’s defense secretary, Robert Gates, but also 150 other Bush Pentagon appointees. The only “rivalry” is between those who back increasing the already bloated defense budget by an absurd amount and those who aim to boost it by a ludicrous amount.

Of course, that lock-step uniformity pales in comparison to the White House’s economic team—a squad of corporate lackeys disguised as public servants.

At the top is Lawrence Summers, the director of Obama’s National Economic Council. As Bill Clinton’s Treasury secretary in the late 1990s, Summers worked with his deputy, Tim Geithner (now Obama’s Treasury secretary), and Clinton aide Rahm Emanuel (now Obama’s chief of staff) to champion job-killing trade deals and deregulation that Obama Commerce Secretary-designate Judd Gregg helped shepherd through Congress as a Republican senator. Now, this pinstriped band of brothers is proposing a “cash for trash” scheme that would force the public to guarantee the financial industry’s bad loans. It’s another ploy “to hand taxpayer dollars to the banks through a variety of complex mechanisms,” says economist Dean Baker—and noticeably absent is anything even resembling a “rival” voice inside the White House.

That’s not an oversight. From former federal officials like Robert Reich and Brooksley Born, to Nobel Prize-winning economists like Joseph Stiglitz and Paul Krugman, to business leaders like Leo Hindery, there’s no shortage of qualified experts who have challenged market fundamentalism. But they have been barred from an administration focused on ideological purity.

In Hindery’s case, the blacklisting was explicit. Despite this venture capitalist establishing a well-respected think tank and serving as a top economic adviser to Obama’s campaign, the Politico reports that “Obama’s aides appear never to have taken his bid [for an administration post] seriously.” Why? Because he “set himself up in opposition” to Wall Street’s agenda.

The anecdote highlights how, regardless of election hoopla, Washington is the same one-party town it always has been—controlled not by Democrats or Republicans, but by kleptocrats (i.e., thieves). Their ties to money make them the undead zombies in the slash-and-burn horror flick that is American politics: No matter how many times their discredited theologies are stabbed, torched and shot down by verifiable failure, their careers cannot be killed. Somehow, these political immortals are allowed to mindlessly lunge forward, never answering to rivals—even if that rival is the president himself.

Remember, while Obama said he wants to slash “billions of dollars in wasteful spending” at the Pentagon, his national security team is demanding a $40 billion increase in defense spending (evidently, the “ludicrous” faction got its way). Obama also said he wants to crack down on the financial industry, strengthen laws encouraging the government to purchase American goods, and transform trade policy. Yet, his economic team is not just promising to support more bank bailouts, but also to weaken “Buy America” statutes and make sure new legislation “doesn’t signal a change in our overall stance on trade,” according to the president’s spokesman.

Indeed, if an authentic “rivalry” was going to erupt, it would have been between Obama’s promises and his team of zombies. Unfortunately, the latter seems to have won before the competition even started.

David Sirota is the best-selling author of “Hostile Takeover” (2006) and “The Uprising” (2008). He is a fellow at the Campaign for America’s Future. Find his blog at OpenLeft.com or e-mail him at ds@davidsirota.com.

© 2009 Creators Syndicate Inc.

Obama Financial Team to Taxpayers: You’ll Get Nothing, and Like It February 3, 2009

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by Jane Hamsher

As a business person, Warren Buffet quite rightly wanted something for his money when he bought up failed banks that couldn’t get help anywhere else. In fact, he wanted a lot. He expected to have the ability to make sure the same crooks executives weren’t pulling down the same salaries for making the same mistakes, and that the business plan changed. It was pretty basic, a bedrock principle of capitalism, the ability to exercise control appropriate to one’s share of ownership.

We’re about to buy ourselves some failed banks, but we can’t get what Warren Buffet gets because nobody wants to mention the “n” word, nationalization:

One part of that strategy will be addressing the toxic assets that are clogging lenders’ balance sheets and preventing them from expanding credit, people familiar with the matter said last week. Likely approaches include a government-run bad bank to buy and hold some of the securities, and insurance of other assets that remain on banks’ books.

As Dean Baker says, “many, if not most, of our banks are in fact bankrupt… the scope of the toxic asset ‘problem’ has reached $2 trillion… this sum vastly exceeds the capital of the banking system.”

But our money somehow isn’t as good as Warren Buffet’s — all we get for it is the “toxic assets”:

[T]he Obama administration is looking to hand taxpayer dollars to the banks through a variety of complex mechanisms. The main reason for using complex mechanisms (rather than simply seizing bankrupt institutions) seems to be to conceal the fact that we are handing taxpayer dollars to bank shareholders and the wealthy executives who run them.

Krugman calls it “lemon socialism”: “taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right.” Or as Joseph Stiglitz says, it’s “trash for cash.”

It’s almost inconceivable that anyone would try to sell this as a good deal for taxpayers, but that’s where we are. Krugman:

“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” says Timothy Geithner, the Treasury secretary – as he prepares to put taxpayers on the hook for that system’s immense losses.

Meanwhile, a Washington Post report based on administration sources says that Mr. Geithner and Lawrence Summers, President Obama’s top economic adviser, “think governments make poor bank managers” – as opposed, presumably, to the private-sector geniuses who managed to lose more than a trillion dollars in the space of a few years.

And this prejudice in favor of private control, even when the government is putting up all the money, seems to be warping the administration’s response to the financial crisis.

So Ronald Reagan tells us that government is the “problem,” and George Bush proves it’s true by running the country into the ground. What that really means is that you should never put people in charge of something who philosophically don’t believe that it’s possible to do their jobs well. It doesn’t mean we should be making irrational business deals out of a commitment to the failed ideologies of people who, you know, failed.

We’re paying to nationalize the banks all right, we just can’t talk about it — nor can we profit from it — because the very idea is “socialist” and sits firmly within Jay Rosen’s “sphere of deviance.”

According to Rebecca Christie at Bloomberg, they’ll try to put a few band aids on the bill limiting executive “pay” (not compensation) and dividends, and require banks to step-up lending. But when Timothy Geitner appears before the Senate Banking Committee on February 10, or the House Financial Services Committee shortly thereafter, don’t expect anyone to be offering the Americans footing the bill for this deal anything other than the unwanted detritus of the banks. Our representatives don’t think we deserve to get for our money what Warren Buffet gets for his.

If his banks make money, Warren Buffet makes money. He gets to be richer and his shareholders get to be richer. If our banks get richer, we don’t get to have the schools and green energy and healthcare and SUPERTRAINS that the profits could (and should) pay for — that goes to fois gras and Cristal and Gulf Stream jets for the bankers who created this mess. We just get to keep a big pile of shit. Because suggesting anything else is “deviant.”

Jane Hamsher is the founder of firedoglake.com. Her work has also appeared on The Daily Beat, AlterNet, The Nation and The American Prospect.

Barack Obama: More ” Plus ça change… You Can Believe In” January 18, 2009

Posted by rogerhollander in About Barack Obama, Barack Obama.
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Several weeks ago I coined the phrase “plus ça change… you can believe in.”  (http://rogerhollander.wordpress.com/2008/12/14/plus-ca-change-we-can-believe-in/?)  It is an obvious take-off on the Obama slogan that twists the meaning 180 degrees via the classic French dictum, which translates to English more or less as “the more things change the more they stay the same.” (plus ça change, plus c’est la même chose)

Today’s Toronto Star (http://www.thestar.com/news/uselection/article/572960) has published an article it had run nineteen years ago in 1990 on the occasion of Barack Obama’s election as the first ever elected president of the Harvard Law Review.  The article is eerily prescient; and it provides grounds both for those who believe he will bring meaningful change as well as for those, like me, who based upon both his words and actions, have lost most of what hope we may have had.

(Full disclosure: I voted for Obama but my heart was with Ralph Nader)

The article confirms that as early as nineteen years ago, Barack Obama had already clearly demonstrated his brilliant mind, a social conscience, formidable personal drive, and magnificent diplomatic skills.  In an uncanny way we see in this article almost a carbon copy of the Barack Obama that we have watched as a presidential candidate and now President-elect.Those of you pragmatists out there will thrill by the account of how he was able to relate positively to conservatives along with those of his more natural constituency to achieve his historic election as the Law Review president.  From your adulatory postings on the article’s Comment section, however, you must have either missed or ignored that paragraph that jumped out at me.

“‘He’s willing to talk to them (the conservatives) and he has a grasp of where they are coming from, which is something a lot of blacks don’t have and don’t care to have,’ said Christine Lee, a second-year law student who is black. ‘His election was significant at the time, but now it’s meaningless because he’s becoming just like all the others (in the Establishment).'”  (my emphasis)

If this isn’t prescient, I don’t know what is.

In a recent article in politico.com (http://www.politico.com/news/stories/0109/17532.html) entitled “Obama Tries to Seduce Republicans” we read about not only Obama’s selection of the notorious Rick Warren for the inauguration invocation prayer, but also of  his dinner with right-of-center writers at George F. Will’s home and the transition team’s reaching out “to other prominent figures atop the Southern Baptist Church, Charles Colson’s Prison Fellowship Ministry and the Jewish Orthodox Union.”  We read of his cozying up to McCain and others in the Republican leadership, and he has been eulogized by everyone from Condoleezza Rice to Pat Robertson (from Robertson’s CNN interview with Larry King: “I must say, this is the most amazing campaign that I think we’ve seen in our life time or maybe in this century. Obama is absolutely brilliant. I would like to make a prediction. He can one of the great presidents of the United States if he doesn’t get pulled too far off of center and gets over into some of the things the American people don’t want. If he governs the way he said he is going to do, as I say, he has the smarts and the charisma to pull this nation together and be an outstanding president.” (http://transcripts.cnn.com/TRANSCRIPTS/0811/05/lkl.01.html)

I have no problem “reaching out” to the neo-Fascists who control the Republican Party, but what had set him apart from the others in the campaign was his initial indication that he would “reach out” to the likes of Cuba’s Castro, Chávez in Venezuela and Iran’s Ahmadinejad.  That would take courage and show leadership, but unfortunately he has backpedalled on this commitment since he won the election. 

It is interesting yet most disturbing to note that right wing Republican presidents like Reagan and W. tend to be aggressive in promoting their agenda and thereby achieve results (which unfortunately are disastrous for most Americans), while Democrat compromisers like Clinton and Obama tend to be diplomatic and achieve little of their own agenda while advancing that of their opposition (in Clinton’s case, for example, welfare “reform,” free trade, reduced social spending, etc.).

I am still more than pleased that Obama won over McCain, that the United States elected its first Afro-American President, and I have confidence that the Obama presidency and the Democratic controlled Congress will undo some of the most horrendous crimes of the Bush Administration.  I believe that Obama will outlaw torture, eventually close Guantanamo, and make some necessary changes with respect to women’s health care, domestic spying, stem cell research and other important areas.  And it cannot be too soon for some of our existing Supreme Court Justices to move on to that even higher court up in the sky so that Obama will have the opportunity to make appointments to that will serve to detoxify the Court, which has become contaminated with the likes of Thomas, Alioto and Roberts.

But by his policy statements (slower troop reduction in Iraq; troop build-up in Afghanistan; at least tacit support of the Israeli massacre in Gaza; no immediate doing away with the tax cuts to the rich, etc.) and his appointments (Gates of Iran-Contra fame, Rahm the unabashed Israel apologist, Clinton the cheerleader for the Iraq Invasion; Lawrence Summers the wolf to guard the economic chicken coop), Obama has shown us what we can expect in the most critical areas: change that is pretty much the same thing.

 

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