2016 Postmortem
Related: About this forumFormer Goldman banker Gensler is Clinton's progressive beacon
Jennifer Epstein, (c) 2016, Bloomberg(c) 2016, Bloomberg
Over tea at Hillary Clinton's Washington home in late 2014, Elizabeth Warren warned her host that when it comes to Wall Street, what mattered most was the people Clinton surrounded herself with.
Months later, as Clinton launched her presidential campaign, Gary Gensler, who had been a Goldman Sachs banker before he became a senior policy aide and Bob Rubin protégé during the degulatory years of Bill Clinton's Treasury Department, came on board, in part to serve as a driving force behind her economic-policy shop. Remarkably, Warren would be one of his strongest supporters.
The deeper explanation is that Gensler is a financial-policy unicorn-a deregulator turned reformer. As head of the Commodity Futures Trading Commission, Gensler became known as one of President Barack Obama's toughest regulators, willing to buck his friends and former colleagues to tighten rules on the $400 trillion swaps market following the 2008 crisis. His name became an expletive to many on Wall Street, to the delight of Warren and her allies.
SNIP
"Gary is tough, smart, and principled, and he really understands what it takes to make our economy work better for hardworking families. During his time at the CFTC, he showed that he is willing to take on the big banks and fight to make our financial system safer," said Warren, who met with Clinton last week after endorsing the presumptive Democratic nominee. "I really respect him."
Full Article at ChicagoTribune.com
TwilightZone
(25,479 posts)What was all that stuff about Hillary not being interested in reining in big banks and Wall Street?
tonyt53
(5,737 posts)BootinUp
(47,187 posts)TwilightZone
(25,479 posts)Even if they're not with Goldman anymore.
TwilightZone
(25,479 posts)I am, of course, being sarcastic.
BootinUp
(47,187 posts)Nye Bevan
(25,406 posts)mcar
(42,372 posts)EndElectoral
(4,213 posts)Wasn't Gensler the head of the Commodities Futures Trading Commission, when MF Global customers had their accounts literally stolen from them up to 1.6 billion dollars?
Wasn't he also in Treasury where he pushed for a law that prohibited the regulation of derivatives?
There's a Corzine connection there as well that smacks of favoritism.
BootinUp
(47,187 posts)BootinUp
(47,187 posts)Octafish
(55,745 posts)By Felix Salmon December 11, 2009
Michael Froman is one of those behind-the-scenes technocrats who never quite makes it into full public view. But according to Matt Taibbi, hes one of the most egregious examples up there with Bob Rubin, literally weve yet seen of the way the revolving door works between business and government generally, and between Citigroup and Treasury in particular.
Im not sure how much of this information is new, but a lot of it was new to me, especially the bit about Froman leading the search for the presidents new economic team while he was still pulling down a multi-million-dollar salary at Citigroup, no less. Apologies for quoting at length:
Leading the search for the presidents new economic team was his close friend and Harvard Law classmate Michael Froman, a high-ranking executive at Citigroup. During the campaign, Froman had emerged as one of Obamas biggest fundraisers, bundling $200,000 in contributions and introducing the candidate to a host of heavy hitters chief among them his mentor Bob Rubin, the former co-chairman of Goldman Sachs who served as Treasury secretary under Bill Clinton. Froman had served as chief of staff to Rubin at Treasury, and had followed his boss when Rubin left the Clinton administration to serve as a senior counselor to Citigroup (a massive new financial conglomerate created by deregulatory moves pushed through by Rubin himself).
Incredibly, Froman did not resign from the bank when he went to work for Obama: He remained in the employ of Citigroup for two more months, even as he helped appoint the very people who would shape the future of his own firm. And to help him pick Obamas economic team, Froman brought in none other than Jamie Rubin, a former Clinton diplomat who happens to be Bob Rubins son. At the time, Jamies dad was still earning roughly $15 million a year working for Citigroup, which was in the midst of a collapse brought on in part because Rubin had pushed the bank to invest heavily in mortgage-backed CDOs and other risky instruments
On November 23rd, 2008, a deal is announced in which the government will bail out Rubins messes at Citigroup with a massive buffet of taxpayer-funded cash and guarantees No Citi executives are replaced, and few restrictions are placed on their compensation. Its the sweetheart deal of the century, putting generations of working-stiff taxpayers on the hook to pay off Bob Rubins fuck-up-rich tenure at Citi. If you had any doubts at all about the primacy of Wall Street over Main Street, former labor secretary Robert Reich declares when the bailout is announced, your doubts should be laid to rest.
It is bad enough that one of Bob Rubins former protégés from the Clinton years, the New York Fed chief Geithner, is intimately involved in the negotiations, which unsurprisingly leave the Federal Reserve massively exposed to future Citi losses. But the real stunner comes only hours after the bailout deal is struck, when the Obama transition team makes a cheerful announcement: Timothy Geithner is going to be Barack Obamas Treasury secretary!
Geithner, in other words, is hired to head the U.S. Treasury by an executive from Citigroup Michael Froman before the ink is even dry on a massive government giveaway to Citigroup that Geithner himself was instrumental in delivering. In the annals of brazen political swindles, this one has to go in the all-time Fuck-the-Optics Hall of Fame.
Wall Street loved the Citi bailout and the Geithner nomination so much that the Dow immediately posted its biggest two-day jump since 1987, rising 11.8 percent. Citi shares jumped 58 percent in a single day, and JP Morgan Chase, Merrill Lynch and Morgan Stanley soared more than 20 percent, as Wall Street embraced the news that the governments bailout generosity would not die with George W. Bush and Hank Paulson.
How much influence did Froman have over the appointment of Geithner as Treasury secretary? Geithner, who wanted to become Treasury secretary and who as New York Fed president was a central (if not the central) figure in orchestrating the massive Citigroup bailout just after the election, knew what Fromans job was in the Obama transition team, and knew that Froman was a senior executive at Citigroup.
CONTINUED...
http://blogs.reuters.com/felix-salmon/2009/12/11/michael-froman-and-the-revolving-door/