The tsunami of populist rage coursing through America is bigger than Daschle’s overdue tax bill, bigger than John Thain’s trash can, bigger than any bailed-out C.E.O.’s bonus. It’s even bigger than the Obama phenomenon itself. It could maim the president’s best-laid plans and what remains of our economy if he doesn’t get in front of the mounting public anger.
Grand Theft Auto: How Stevie the Rat Bankrupted GM June 8, 2009Posted by rogerhollander in Economic Crisis, Labor.
Tags: car czar, Citibank, general moters, gm bankruptcy, gm pension, Greg Palast, jp morgan chase, labor, labor unions, labour, Obama, obama administration, pension funds, robert rubin, roger hollander, steven rattner, tarp, treasury secretary, workers, workers rights
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Monday 01 June 2009
Screw the autoworkers. They may be crying about General Motors’ bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won’t spoil Jamie Dimon’s day.
Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while shareholders are getting zilch and many creditors getting hosed, a few privileged GM lenders – led by Morgan and Citibank – expect to get back 100% of their loans to GM, a stunning $6 billion.
The way these banks are getting their $6 billion bonanza is stone cold illegal.
I smell a rat.
Stevie the Rat, to be precise. Steven Rattner, Barack Obama’s “Car Czar” – the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what’s left. That’s the law. What workers don’t lose are their pensions (including old-age health funds) already taken from their wages and held in their name.
But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.
Here’s the scheme: Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replaced by GM stock. The percentage may be 17% of GM’s stock – or 25%. Whatever, 17% or 25% is worth, well … just try paying for your dialysis with 50 shares of bankrupt auto stock.
Yet Citibank and Morgan, says Rattner, should get their whole enchilada – $6 billion right now and in cash – from a company that can’t pay for auto parts or worker eye exams.
Preventive Detention for Pensions
So what’s wrong with seizing workers’ pension fund money in a bankruptcy? The answer, Mr. Obama, Mr. Law Professor, is that it’s illegal.
In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can’t seize workers’ pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that’s because they are the same thing: workers give up wages in return for retirement benefits.
The law is darn explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as “fiduciaries.” Here’s the law, Professor Obama, as described on the government’s own web site under the heading, “Health Plans and Benefits.”
“The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits.”
Every business in America that runs short of cash would love to dip into retirement kitties, but it’s not their money any more than a banker can seize your account when the bank’s a little short. A plan’s assets are for the plan’s members only, not for Mr. Dimon nor Mr. Rubin.
Yet, in effect, the Obama Administration is demanding that money for an elderly auto worker’s spleen should be siphoned off to feed the TARP babies. Workers go without lung transplants so Dimon and Rubin can pimp out their ride. This is another “Guantanamo” moment for the Obama Administration – channeling Nixon to endorse the preventive detention of retiree health insurance.
Filching GM’s pension assets doesn’t become legal because the cash due the fund is replaced with GM stock. Congress saw through that switch-a-roo by requiring that companies, as fiduciaries, must
“… act prudently and must diversify the plan’s investments in order to minimize the risk of large losses.”
By “diversify” for safety, the law does not mean put 100% of worker funds into a single busted company’s stock.
This is dangerous business: The Rattner plan opens the floodgate to every politically-connected or down-on-their-luck company seeking to drain health care retirement funds.
House of Rubin
Pensions are wiped away and two connected banks don’t even get a haircut? How come Citi and Morgan aren’t asked, like workers and other creditors, to take stock in GM?
As Butch said to Sundance, who ARE these guys? You remember Morgan and Citi. These are the corporate Welfare Queens who’ve already sucked up over a third of a trillion dollars in aid from the US Treasury and Federal Reserve. Not coincidentally, Citi, the big winner, has paid over $100 million to Robert Rubin, the former US Treasury Secretary. Rubin was Obama’s point-man in winning banks’ endorsement and campaign donations (by far, his largest source of his corporate funding).
With GM’s last dying dimes about to fall into one pocket, and the Obama Treasury in his other pocket, Morgan’s Jamie Dimon is correct in saying that the last twelve months will prove to be the bank’s “finest year ever.”
Which leaves us to ask the question: is the forced bankruptcy of GM, the elimination of tens of thousands of jobs, just a collection action for favored financiers?
And it’s been a good year for Senor Rattner. While the Obama Administration made a big deal out of Rattner’s youth spent working for the Steelworkers Union, they tried to sweep under the chassis that Rattner was one of the privileged, select group of investors in Cerberus Capital, the owners of Chrysler. “Owning” is a loose term. Cerberus “owned” Chrysler the way a cannibal “hosts” you for dinner. Cerberus paid nothing for Chrysler – indeed, they were paid billions by Germany’s Daimler Corporation to haul it away. Cerberus kept the cash, then dumped Chrysler’s bankrupt corpse on the US taxpayer.
(“Cerberus,” by the way, named itself after the Roman’s mythical three-headed dog guarding the gates of Hell. Subtle these guys are not.)
While Stevie the Rat sold his interest in the Dog from Hell when he became Car Czar, he never relinquished his post at the shop of vultures called Quadrangle Hedge Fund. Rattner’s personal net worth stands at roughly half a billion dollars. This is Obama’s working class hero.
If you ran a business and played fast and loose with your workers’ funds, you could land in prison. Stevie the Rat’s plan is nothing less than Grand Theft Auto Pension.
It doesn’t make it any less of a crime if the President drives the getaway car.
Economist and journalist Greg Palast, a former trade union contract negotiator, is author of the New York Times bestsellers “The Best Democracy Money Can Buy” and “Armed Madhouse.” He is a GM bondholder and card-carrying member of United Automobile Workers Local 1981. Palast’s latest reports for BBC Television and Democracy Now! are collected on the newly released DVD, “Palast Investigates: From 8-Mile to the Amazon – on the trail of the financial marauders.” Watch the trailer here.
Billions Dished Out in the Shadows March 4, 2009Posted by rogerhollander in Economic Crisis.
Tags: AIG, aig rescue, Ben Bernanke, economic advisors, Federal Reserve, financial products, president obama, regulatory oversight, Robert Scheer, roger hollander, stimulus package, timothy geithner, treasury department, treasury secretary, us taxpayers, Wall Street bailout
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Robert Scheer, www.huffingtonpost.com, March 4, 2009
This is crazy! Forget the bleating of Rush Limbaugh; the problem is not with the quite reasonable and, if anything, underfunded stimulus package, which in any case will be debated long and hard in Congress. The problem is with what is not being debated: the far more expensive Wall Street bailout that is being pushed through–as in the case of the latest AIG rescue–in secret, hurried deal-making primarily by the unelected secretary of the treasury and the chairman of the Federal Reserve.
Six months ago, we taxpayers began bailing out AIG with more than $140 billion, and then it went and lost $61.7 billion in the fourth quarter, more than any other company in history had ever lost in one quarter. So Timothy Geithner and Ben Bernanke huddled late into the night last weekend and decided to reward AIG for its startling failure with 30 billion more of our dollars. Plus, they sweetened the deal by letting AIG off the hook for interest it had been obligated to pay on the money we previously gave the company.
AIG doesn’t have to pay the 10 percent interest due on the preferred stock the U.S. government got for the earlier bailout funds because that interest will now be paid out only at AIG’s discretion, which means never. The preferred stock, which got watered down, carried a cumulative interest, meaning we taxpayers would have recaptured some money if the company ever got going again, but that interest obligation was waived in the new deal.
We’ve already given AIG a total of $170 billion–an amount that dwarfs the $75 billion allocated to helping those millions of homeowners facing foreclosures. And more will be thrown down the AIG rat hole because President Barack Obama is blindly following the misguided advice of his top economic advisers, who insist that AIG is too big to fail.
“AIG provides insurance protection to more than 100,000 entities, including small businesses, municipalities, 401(k) plans and Fortune 500 companies who together employ over 100 million Americans,” the joint Treasury Department and Fed statement declared while insisting that for that reason, plus the “systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high.”
What about the cost of inaction by Treasury and the Fed before this meltdown? If AIG were so important to the American economy, shouldn’t government regulators have been looking more closely at its activities? They couldn’t then, and even now they don’t understand what AIG has been up to, because the company was allowed to operate in an essentially unregulated global economy in which multinational corporations have their way. As the Treasury/Fed statement concedes: “AIG operates in over 130 countries with over 400 regulators and the company and its regulated and unregulated subsidiaries are subject to very different resolution frameworks across their broad and diverse operations without an overarching resolution mechanism.”
Oh, really? And you’re discovering that only now, when you’re making us bail AIG out? It wasn’t that long ago that a couple of hustlers operating out of an AIG office in London were going wild making money off selling insurance on credit default swaps that no one could understand, but the company execs loved those huge profit margins. To challenge their maneuvering, as some in Congress attempted, was said by their defenders, including Geithner, to put them at an unfair disadvantage in the world market. Ignorance was bliss … until the bubble burst.
This was all belatedly conceded by Bernanke in his Senate testimony on Tuesday: “AIG exploited a huge gap in the regulatory system. There was no oversight of the Financial Products division. This was a hedge fund, basically, that was attached to a large and stable insurance company, made huge numbers of irresponsible bets–took huge losses. There was no regulatory oversight because there was a gap in the system.”
AIG used to be in the conventional insurance business, covering identifiable risks it knew something about, until it took advantage of deregulation and a lack of government surveillance to come up with contrived new financial products. Even Maurice Greenberg, the man who built AIG from the ground up over a span of 40 years before he was forced out amid corruption charges in 2005, admits that he didn’t understand the newfangled financial gimmicks that the company was peddling. This week, claiming he too was swindled, Greenberg sued in federal court, charging the AIG execs who forced him out with “gross, wanton or willful fraud or other morally culpable conduct,” over the credit default swap portfolio that was part of his settlement.
U.S. taxpayers now have ownership of almost 80 percent of AIG, but with the company’s once solid traditional insurance business now suffering a steep loss of consumer confidence, it’s not likely that even the formerly healthy parts of the company will be worth much. What we have here is all pain and no gain for the taxpayers roped into this debacle, which is proving to be the story of the entire banking bailout.
Robert Scheer is editor in chief of Truthdig and author of The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America.
Tsunami Of Populist Rage Coursing Through America February 8, 2009Posted by rogerhollander in Economic Crisis.
Tags: AIG, Alston & Bird, bank rescue, bob dole, ceo bonus, citygroup, crony capitalism, deregulation, derivative markets, Economic Crisis, economic meltdown, frank rich, Goldman Sachs, great depression, Hank Paulson, health care reform, income inequality, job loss, Joe the Plumber, Larry Summers, McCain, ordinary americans, Palin, paul volcker, Pepsi and Viagra, Phil Gramm, president obama, public anger, Rahm Emanuel, retirement savings, revolving door, Robert Reich, roger hollander, salary caps, slumdog milionaire, tarp, tax delinquency, tax evasion, timothy geithner, tom daschle, treasury secretary, unemployment
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In New York, editorial pages on both ends of the political spectrum, The Wall Street Journal and The Times, called for Daschle to step down. But not The Washington Post. In a frank expression of the capital’s isolation from the country, it thought Daschle could still soldier on even though “ordinary Americans who pay their taxes may well wonder why Mr. Obama can’t find cabinet secretaries who do the same.”
As Jon Stewart might say, oh those pesky ordinary Americans!
In reality, Daschle’s tax shortfall, an apparently honest mistake, was only a red flag for the larger syndrome that much of Washington still doesn’t get. It was the source, not the amount, of his unreported income that did him in. The car and driver advertised his post-Senate immersion in the greedy bipartisan culture of entitlement and crony capitalism that both helped create our economic meltdown (on Wall Street) and failed to police it (in Washington). Daschle might well have been the best choice to lead health-care reform. But his honorable public record was instantly vaporized by tales of his cozy, lucrative relationships with the very companies he’d have to adjudicate as health czar.
Few articulate this ethical morass better than Obama, who has repeatedly vowed to “close the revolving door” between business and government and end our “two sets of standards, one for powerful people and one for ordinary folks.” But his tough new restrictions on lobbyists (already compromised by inexplicable exceptions) and porous plan for salary caps on bailed-out bankers are only a down payment on this promise, even if they are strictly enforced.
The new president who vowed to change Washington’s culture will have to fight much harder to keep from being co-opted by it instead. There are simply too many major players in the Obama team who are either alumni of the financial bubble’s insiders’ club or of the somnambulant governmental establishment that presided over the catastrophe.
This includes Timothy Geithner, the Treasury secretary. Washington hands repeatedly observe how “lucky” Geithner was to be the first cabinet nominee with an I.R.S. problem, not the second, and therefore get confirmed by Congress while the getting was good. Whether or not this is “lucky” for him, it is hardly lucky for Obama. Geithner should have left ahead of Daschle.
Now more than ever, the president must inspire confidence and stave off panic. As Friday’s new unemployment figures showed, the economy kept plummeting while Congress postured. Though Obama is a genius at building public support, he is not Jesus and he can’t do it all alone. On Monday, it’s Geithner who will unveil the thorniest piece of the economic recovery plan to date — phase two of a bank rescue. The public face of this inevitably controversial package is now best known as the guy who escaped the tax reckoning that brought Daschle down.
Even before the revelation of his tax delinquency, the new Treasury secretary was a dubious choice to make this pitch. Geithner was present at the creation of the first, ineffectual and opaque bank bailout — TARP, today the most radioactive acronym in American politics. Now the double standard that allowed him to wriggle out of his tax mess is a metaphor for the double standard of the policy he must sell: Most “ordinary Americans” still don’t understand why banks got billions while nothing was done (and still isn’t being done) to bail out those who lost their homes, jobs and retirement savings.
As with Daschle, the political problems caused by Geithner’s tax infraction are secondary to the larger questions raised by his past interaction with the corporations now under his purview. To his credit, Geithner, like Obama, has devoted his career to public service, not buckraking. But he still has not satisfactorily explained why, as president of the New York Fed, he failed in his oversight of the teetering Wall Street institutions. Nor has he told us why, in his first major move in his new job, he secured a waiver from Obama to hire a Goldman Sachs lobbyist as his chief of staff. Nor, in his confirmation hearings, did he prove any more credible than the Bush Treasury secretary, the Goldman Sachs alumnus Hank Paulson, in explaining why Lehman Brothers was allowed to fail while A.I.G. and Citigroup were spared.
Citigroup had one highly visible asset that Lehman did not: Robert Rubin, the former Clinton Treasury secretary who sat passively (though lucratively) in its executive suite as Citi gorged on reckless risk. Geithner, as a Rubin protégé from the Clinton years, might have recused himself from rescuing Citi, which so far has devoured $45 billion in bailout money.
Key players in the Obama economic team beyond Geithner are also tied to Rubin or Citigroup or both, from Larry Summers, the administration’s top economic adviser, to Gary Gensler, the newly named nominee to run the Commodity Futures Trading Commission and a Treasury undersecretary in the Clinton administration. Back then, Summers and Gensler joined hands with Phil Gramm to ward off regulation of the derivative markets that have since brought the banking system to ruin. We must take it on faith that they have subsequently had judgment transplants.
Obama’s brilliant appointees, we keep being told, are irreplaceable. But as de Gaulle said, “The cemeteries of the world are full of indispensable men.” You have to wonder if this team is really a meritocracy or merely a stacked deck. Not only did Rubin himself serve on the Obama economic transition team, but two of the transition’s headhunters were Michael Froman, Rubin’s chief of staff at Treasury and later a Citigroup executive, and James S. Rubin, an investor who is Robert Rubin’s son.
A welcome outlier to this club is Paul Volcker, the former Federal Reserve chairman chosen to direct Obama’s Economic Recovery Advisory Board. But Bloomberg reported last week that Summers is already freezing Volcker out of many of his deliberations on economic policy. This sounds like the arrogant Summers who was fired as president of Harvard, not the chastened new Summers advertised at the time of his appointment. A team of rivals is not his thing.
Americans have had enough of such arrogance, whether in the public or private sectors, whether Democrat or Republican. Voters turned on Sarah Palin not just because of her manifest unfitness for office but because her claims of being a regular hockey mom were contradicted by her Evita shopping sprees. John McCain’s sanctification of Joe the Plumber (himself a tax delinquent) never could be squared with his inability to remember how many houses he owned. A graphic act of entitlement also stripped naked that faux populist John Edwards.
The public’s revulsion isn’t mindless class hatred. As Obama said on Wednesday of his fellow citizens: “We don’t disparage wealth. We don’t begrudge anybody for achieving success.” But we do know that the system has been fixed for too long. The gaping income inequality of the past decade — the top 1 percent of America’s earners received more than 20 percent of the total national income — has not been seen since the run-up to the Great Depression.
This is why “Slumdog Millionaire,” which pits a hard-working young man in Mumbai against a corrupt nexus of money and privilege, has become America’s movie of the year. As Robert Reich, the former Clinton labor secretary, wrote after Daschle’s fall, Americans “resent people who appear to be living high off a system dominated by insiders with the right connections.”
The neo-Hoover Republicans in Congress, who think government can put Americans back to work with corporate tax cuts but without any “spending,” are tone deaf to this rage. Obama is not. It’s a good thing he’s getting out of Washington this week to barnstorm the country about the crisis at hand. Once back home, he’s got to make certain that the insiders in his own White House know who’s the boss.
Summers Advised Sending Toxic Waste to Africa; the woudn’t live long enough to get prostate cancer anyway November 28, 2008Posted by rogerhollander in Africa, Barack Obama.
Tags: Africa, economic meltdown, gray panthers, lawrence summers, Obama, racism, roger hollander, toxic waste, treasury secretary, World Bank
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From the San Francisco Gray Panthers
Lawrence Summers is on a very short list of possible nominees for Secretary of Treasury. His selection has been complicated, however, by his destructive performance as president of Harvard University, a rocky term he finally sabotaged by revealing his opinion that women lack the mental aptitude to succeed in science.
But there is a lesser known episode in Summers’ past that further highlights his reckless tendencies, and foreshadows a politically nettlesome nomination process.
On December 12, 1991, while serving as chief economist for the World Bank, Summers authored a private memo arguing that the bank should actively encourage the dumping of toxic waste in developing countries, particularly “under populated countries in Africa,” which Summers described as “UNDER-polluted.” Summers added that public outrage over the heightened rates of prostate cancer caused by his proposed dumping would be mitigated by the fact that poor people in developing countries rarely live long enough to develop prostate cancer.
Read the full Summers memo here.
When the Summers memo leaked to the public in February 1992, Brazil’s Secretary of the Environment, Jose Lutzenburger, responded with an indignant missive. “Your reasoning is perfectly logical but totally insane,” Lutzenburger told Summers. “Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional ‘economists’ concerning the nature of the world we live in… If the World Bank keeps you as vice president it will lose all credibility.”
If Obama nominates Summers, he will send a dispiriting message to governments of developing countries — especially in Africa — just as they have begun to look at the United States as a beacon of hope.
Back in the U.S., Summers’ nomination would prompt a reexamination by the media of the countless controversies he has fomented. Even an episode as tangential as Summers’ romantic fling with right-wing hatemonger Laura Ingraham could become a source of political embarrassment for the White House. Summers should be left to write his memoirs, not memos.
Obama’s Treasury Secretary? Let’s Hope Not November 9, 2008Posted by rogerhollander in Economic Crisis.
Tags: Economic Crisis, economic crisis Obama, economic meltdown, Laswrence Summers, Obama cabinet, Robert Scheer, roger hollander, treasury department, treasury secretary
Posted on Nov 6, 2008
|Flickr / World Economic Forum|
Barack Obama is rumored to favor Lawrence Summers as his treasury secretary. That’s a terrible choice, says Robert Scheer, if the president-elect is at all concerned about the financial meltdown.
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Truthdig: Today on the Truthdig podcast, Truthdig editor Robert Scheer explains why the man rumored to be Barack Obama’s choice for treasury secretary would be a huge mistake. The frontrunner who has emerged for Barack Obama’s treasury secretary is rumored to be a man named Larry Summers, who was the treasury secretary under Bill Clinton. Tell us why you think that would be a terrible mistake?
Robert Scheer: Lawrence Summers is as responsible as anyone for the current economic meltdown. He was Robert Rubin’s protege in the Treasury Department, and he became secretary of treasury after Rubin, who had come from Goldman Sachs to be Clinton’s secretary of treasury, went off to CitiGroup—which was the first company from the kind of deregulation pushed through under Clinton. Summers was the secretary of treasury that got Clinton to sign off onto the two most egregious pieces of legislation that permitted the financial meltdown. This was legislation carried by Phil Gramm, the Republican senator who was head of the Banking Committee, and his name is one of them, it’s called the Gramm-Leach-Bliley Act, or otherwise known as the Financial Services Modernization Act—that was in 1999. And in 2000, as a lame duck, the Clinton administration approved after Congress passed again at Graham’s insistence, something called the Commodity Futures Modernization Act. These two pieces of legislation allowed the current meltdown. They allowed the commercial banks, investment banks, stockbrokers and insurance companies to merge. That’s why you have this problem of AIG buying these phony toxic securities and everything. And it did not have any degree of transparency, it allowed them to merge their data, it allowed them to merge their activities. And the Commodity Futures Modernization Act said that all these new-fangled financial instruments that they developed, the hybrid instruments, the credit swaps and so forth, were automatically freed form any government regulation or any… were not covered by any pre-existing regulatory legislation. It’s those instruments that have gotten us into this problem. We don’t know what they’re worth. Taxpayers are now being forced to buy them. And that’s the heart of the whole thing. And it was Lawrence Summers who was secretary of the treasury, who in 1999-2000, urged Clinton successfully to sign off on those two pieces of legislation. It’s now admitted that they didn’t even known what was in them. That it had not been vetted, there had not been hearings in Congress on the Commodity Futures Modernization Act, and so Lawrence Summers has got his fingerprints all over these things. He assured the president, he assured everyone else, that this was a very good thing to do, but what in effect did, was end the regulatory regime that had been put place under Franklin Deleano Roosevelt during the Great Depression to prevent such a meltdown. So the idea that you would now reward Lawrence Summers for having gotten us into this mess by making him secretary of the treasury, and in an administration that has been elected to promise change and go back to this retread, go back to this guy who helped get us into this mess, is mind-boggling.
Truthdig: So what responsibility ultimately does the Bush administration have to bare for this economic meltdown if so much of the deregulation that took place that enabled it happened under the Clinton administration?
Scheer: I mean, deregulation was the Republican siren, this was the Reagan revolution, the Republicans have been pushing this forever. And certainly it was the Republican Party, as I mentioned Phil Gramm was certainly key to it, who pushed through the deregulation that passed under Clinton. Clinton’s problem was that he was an opportunist, and he went for this triangulation. And he signed off on it because people like Robert Rubin and Lawrence Summers told him it was an OK thing, that it was a good thing to do. I don’t think Bill Clinton himself was a big advocate of it, I don’t think he understood it, but he signed off on it because Wall Street wanted it. What happened with the incoming Bush administration is that then there were attempts during that time to rewrite some of those laws, to soften them up to extend regulation. But the Bush administration embraced this deregulatory opportunity and went to town with it. So they do have major responsibility. And as this meltdown was clearly emerging, they did not respond in any real way. So I don’t want to get Bush off the hook, he certainly was the one who brought us to this mess. I don’t want to get the Republican Party off the hook. The Reagan revolution and the mantra of deregulation is certainly their baby. But, I’m trying to address your initial question about picking Lawrence Summers. And I think we should recognize there are plenty of Democrats who bear responsibility for this. Wall Street are into Democrats like Lawrence Summers who do bear responsibility. And certainly Robert Rubin, who was his mentor. Robert Rubin, in January of this year, gave a speech at Cooper Union in New York saying we weren’t really experiencing a serious crisis—this is just the normal fluctuation of the business market. And Barack Obama, on the other hand, two months later very clearly spelled out that we are in a crisis—and he did point to this very legislation that Clinton signed off on as being central to it. So, I for the life of me cannot understand why Barack Obama would now turn to Lawrence Summers who certainly among the Democrats was a leader in pushing or that legislation.
Truthdig: So is there anyone you can think of who would be a better candidate?
Scheer: Well, I think that there’s a war on Barack Obama’s economic soul going on now. So I think that if he listens to Paul Volcker, he listens to Warren Buffet, if he could listen to George Soros, Paul Krugman, I think he’d be in a lot better shape. I think he should turn to those people who like Buffet and Paul Volcker, formal head of the Fed, who did warn us about these dangers. Who was against, Warren Buffet, certainly a big capitalist, called these new financial instruments financial weapons of mass destruction. He predicted this nightmare. So I would certainly feel more comfortable is he was relying on them rather than on Robert Rubin or Lawrence Summers for his key picks.
Truthdig: Well we should say for the record, that this is a rumor; we are not certain who he’s going to pick.
Scheer: Yeah we’re not, and after all Barack Obama has stressed in this historic victory, and I do think this is historic, and should be applauded in every way, has said that he is going to be accountable o the people who put him in office and he’s going to be a real agent of change. Well it’s not change in any kind of positive direction to turn to the same cynics who got us into this mess. And certainly summers and Rubin are right in there.
Truthdig: Well we hope he doesn’t. Thank you.