Robert Scheer: Silent "Democrats are complicit in this emerging scandal of the banking bailout"

[Better Believe It]

Summers: Living Large and in Charge
TruthDig
By Robert Scheer
April 8, 2009


Not surprisingly, Lawrence Summers is convinced that he deserved every penny of the $8 million that Wall Street firms paid him last year. And why shouldn't he be cut in on the loot from the loopholes in the toxic derivatives market that he pushed into law when he was Bill Clinton's treasury secretary? No one has been more persistently effective in paving the way for the financial swindles that enriched the titans of finance while impoverishing the rest of the world than the man who is now the top economic adviser to President Obama.

It was Summers, as much as anyone, who in the Clinton years prevented the regulation of the hedge funds that are at the center of the explosion of the derivatives bubble, and the fact that D.E. Shaw, a leading hedge fund, paid the Obama adviser $5.2 million last year does suggest a serious conflict of interest. That sum is what Summers raked in for a part-time gig, in addition to the $2.77 million he received for forty speaking engagements, largely before banks and investment firms, and on top of the $587,000 he was paid as a professor at Harvard.

Why was someone as compromised as Summers made the White House's point man overseeing $2.86 trillion in bailout funds to the financial moguls whom he had enabled in creating this mess and many of whom had benefited him financially? Will no congressional panel ever quiz Summers about his grand theory that the derivatives market required no government supervision because, as he testified to a Senate subcommittee in July of 1998: "the parties to these kinds of contracts are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies...."

Think of the sophisticates at AIG when you read that sentence, and then ask why Summers is once again at large in the public sector. Or take White House spokesman Ben LaBolt's word for it that "Dr. Summers has been at the forefront of this administration's work...to put in place a regulatory framework that will strengthen the financial system and its oversight--all in an effort to help the families across America who have paid a very steep price for risky decisions made by Wall Street executives."

The very same executives that Summers had previously assured us could be trusted without any regulation. Why should we now trust Summers any more than we trust them? Couldn't Summers just take his ill-gotten gains and go hide out in some offshore tax haven? If this was happening in a Republican administration, scores of Democrats in Congress would be all over it, asking tough questions about what exactly did Summers do to earn all that money from the D.E. Shaw hedge fund. As it is, with their silence they are complicit in this emerging scandal of the banking bailout.

Please read the complete article at:

http://www.thenation.com/doc/20090420/scheer?rel=hp_picks

[flpoljunkie]

1. I do wish someone would ask President Obama the question, 'Why Summers?'

[Better Believe It]

2. You don't have to be a rocket scientist to figure out we're being ripped off by Wall Street

[rhett o rick]

4. I agree. Why Summers. I think that Pres Obama isn't powerful enough to take on Wall Street.

I believe he will do his best but is not powerful enough. What other explanation for Summers and the huge bank bailouts?

[Better Believe It]

11. FDR didn't have any problem. Perhaps FDR wasn't as conservative as President Obama

[rhett o rick]

12. Apples and oranges. Wall Street is many times more powerful now. nm

[tbyg52]

15. As are corporations in general. nt

[stillcool]

20. That's disingenuous...don't you think?

FDR did some great things, but our government and our banking system were no different then, than they are now..they just have all that much more of a choke-hold on our government.

President Franklin D. Roosevelt, in a letter to an associate dated November 21, 1933
The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government ever since the days of Andrew Jackson.

Part 1
excerpted from the book
The Shadows of Power
The Council on Foreign Relations and the American Decline
by James Perloff
Western Islands Publishers, 1988, paperback

http://www.thirdworldtraveler.com/New_World_Order/Part1_Shadows_Power.html


Columnist Edith Kermit Roosevelt, granddaughter of President Theodore Roosevelt, described the Establishment
The word "Establishment" is a general term for the power elite in international finance, business, the professions and government, largely from the northeast, who wield most of the power regardless of who is in the White House.
Most people are unaware of the existence of this "legitimate Mafia." Yet the power of the Establishment makes itself felt from the professor who seeks a foundation grant, to the candidate for a cabinet post or State Department job. It affects the nation's policies in almost every area.


p53
Roosevelt was himself a prototypic Wall Streeter. His family had been involved in New York banking since the eighteenth century. His uncle, Frederic Delano, was on the original Federal Reserve Board. FDR had a customary Establishment education, attending Groton and Harvard. During the 1920's he pursued a career on Wall Street, working as a bond writer and corporate promoter, and organizing speculation enterprises. He was on the board of directors eleven different corporations.
p55
FDR's bonds to the Council were affirmed by his son-in-law, Curtis Dall. Dali, a regular visitor at the Roosevelt home, eventually wrote a book entitled FDR: My Exploited Father-In-Law. He wrote therein:
For a long time I felt that FDR had developed many thoughts and ideas that were his own to benefit this country, the U.S.A. But, he didn't. Most of his thoughts, his political "ammunition," as it were, were carefully manufactured for him in advance by the CFR-One World Money group. Brilliantly, with great gusto, like a fine piece of artillery, he exploded that prepared "ammunition" in the middle of an unsuspecting target, the American people - and thus paid off and retained his internationalist political support.


FDR now rode an open highway to the Presidency, fueled by such men as Bernard Baruch. The latter's assistant, Hugh Johnson, said of the campaign: "Every time a crisis came, B. M. either gave the necessary money, or went out and got it." In the meantime, the Republicans were issued a death sentence. Newspapers blamed President Herbert Hoover for the Crash and Depression. The Federal Reserve, instead of moving to stimulate growth and recovery, contracted the money supply by more than one third between 1929 and 1933, thus sustaining the Depression and giving no relief to the thousands of banks dying from runs.
President Hoover had a plan to bail out the banks, but he needed backing from the Democratic Congress. After losing the 1932 election, the lame duck President appealed to Roosevelt: Would he issue a statement encouraging Congressional support, and thus help end the crisis? FDR gave no reply, later claiming that he had written one, but that due to an oversight it was not sent. The banks were allowed to go on collapsing right until his inauguration, thus attaching maximum stigma to the Republican Party. Ironically, when the new President announced emergency banking measures, he used the very plan drawn up by Hoover's Treasury Secretary.

[truedelphi]

25. That about sums it up. n/t

[Dinger]

30. Why duncan Too?

Off-topic, I know, but to me it's a serious question.

[paulk]

3. kind of reminds me

of how the Republicans fell in line behind Bush. OK, maybe that's hyperbole - but Summers/Geithner is a disaster.

Obama was handed an opportunity to make some real change, you know, kind of what he ran on. Instead he is opting for the status quo.

I support much of what Obama is doing -

but, IMHO, he is really fucking up here.

[AtomicKitten]

7. Summers/Geithner are Clinton retreads and probably would have served a 2nd Clinton Admin as well.

And then you'd be falling in line behind anything they did.

Just sayin'.

[paulk]

13. why don't you address the OP

instead of trying to hijack the thread?

[AtomicKitten]

14. Hypocrisy is always an interesting and integral part of the discussion.

You have defended all things Clinton, Geithner and Summers come from the Clinton Administration, and chances are darn good you would be defending them vociferously were they serving under a President Hillary Clinton.

And for the record, I thought Geithner and Summers sucked ass when they aided and abetted Bill Clinton with the deregulation of the financial markets that precipitated this mess, and I'm not liking them much now either.

[paulk]

17. speaking of hypocrisy

I seem to remember you as a big time defender of Clinton...

but that aside

you have no idea if I would be defending HRC if she had followed the path Obama is vis vis Summers/Geithner

so your post is nothing more than your usual ad hominem

and diversion to take attention away from a thread that exposes a bad policy decision by the Obama administration.

[AtomicKitten]

18. What a difference an election makes, huh?

I got to see a side of both Clintons that caused me to re-evaluate my perception of history. You know, the denial, the excuse-making, the rationalizations. I had the courage to change my set-in-stone opinion, to admit I was dead wrong about them.

And the fact remains Summers and Geithner were brought on board by Bill Clinton and together they orchestrated the deregulation that was instrumental in bringing about the collapse of the financial markets.

I don't begrudge you this pile-on; it's a small consolation for your primary loss. However, we all have seen enough of your posts over the years (here and at the now defunct site that shall not be named) to deduce pretty darn accurately what you would have done had the primary turned out differently.

I did not defend the Clinton Economic team back then nor will I defend the same players, the complicit Democrats, now. They suck just as much now as they did back then, and telling the whole truth about them and their complicity isn't an ad hominem attack, it's just the unvarnished truth.

[paulk]

21. that's quite a slur

the one about my posts at the "other site".

It's one I can't even defend myself against, not only because the site no longer exists, but because I couldn't access it anyway, having been kicked off the site. For defending Obama, strangely enough.

Whatever.


Your tactics are despicable, and I am through with you. Again.

[AtomicKitten]

36. that's nonsense and your faux outrage is lame subterfuge

I told the truth about you (you posted up to the last day; people have been following that carwreck you know), and I told the truth about Bill Clinton, Geithner, and Summers (they were in on the ground floor of this mess).

I'm fine with you piling on Obama for using Summers and Geithner and you need to accept the fact that those same dimwits and Bill Clinton fall under the theme of this OP, "the complicit Democrats."

[ClarkUSA]

40. The lady doth protest too much, methinks...

... I couldn't access it anyway, having been kicked off the site. For defending Obama, strangely enough.

That's not true. I saw you posting there up until the last day, and you NEVER defended Obama. Quite the opposite.
Thanks for playing, anyway.

[Name removed]

42. Deleted message

Message removed by moderator. Click here to review the message board rules.

[truedelphi]

26. Same sad feeling here. This decision of his to let the foxes

Guard the hen house while consulting with the other wilder foxes will come back to haunt him, in much the way that Bush's decision to ignore the sound advice of Brent Scowcraft and keep some 300K troops in Iraq, thus securing real peace came back to haunt him.

Obama had a choice - to do the right thing and put the insolvent banks into receivership, and then create a new Central Bank, one that would have some 2.9 to 8.1 Trillion in dollars to hand out to We the People.

Instead, the monies goes back to Wall Street, where there are no real regulations for any of this in force. Geithner has been very careful to keep the "regulations" quite patchwork-y, so that they will not be very effective. When it would have been a whole lot easier to simply re-instate Glass Steagall.

[Dinger]

31. summers/geithner/duncan, All Disasters IMO (nt)

[slipslidingaway]

5. knr and why Gary Gensler? n/t

[progressoid]

6. Why does Robert Scheer hate America?

[Name removed]

8. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[depakid]

9. Not complicit- active participants

Obama's team owns the issue now.

[Supersedeas]

19. that's how i see it too -- the Chris Dodd wing of the Party will not be denied

[polichick]

10. Love your "Monopoly" pic!

[Name removed]

16. Deleted message

Message removed by moderator. Click here to review the message board rules.

[and-justice-for-all]

22. I would not have given the banks any funds at all...

But I believe Obama was mislead in to giving the banks money on the premise that it would encourage lending and therefore moving the economy faster.

I would have given the money directly to each state in order to move the economy. By investing in each state, which I am sure they all have infrastructure projects they needs to get started, roads and bridges that need repaired and maintain as well, it would have given a faster return, create jobs and in turn aide the economy much faster and more securely.

People who are making money will spend money and bank their money, with more people banking, the bank can then increase lending....but, that is just my 2 cents.

I do not blame Obama for trying, but the people he is entrusting with their advice, needs to be reviewed with a fine tooth comb.

[truedelphi]

27. How can Obama be so smart that he beats out a field of twelve other candidates to

Become his party's nominee, and then smart enough to win the Presidency but so naive that he offers the banksers the chance to plunder our TRILLIONS of monies over and over again?

Something stinks to high heaven.

[and-justice-for-all]

28. Not sure...

perhaps being president in tales some bargaining of sorts. In order to do most of things he wants, he has to give to to those who helped him win the election.

I do not know, there is nothing clean about politics.

[truedelphi]

33. Only Obama is not just "giving" - he is handing them our entire economy

Over to these people.

[ProSense]

23. What does that even mean?

TARP Oversight Panel: Treasury May Not Be Acknowledging ‘The Depth Of The Current Downturn’

About

You'd think there was not a peep coming out of Congress. Also,Dems made their opinions known when the legislation was being debated. Now that it's being implemented, there is an oversight panel.

Sometimes I think people just like saying/implying complicity to get everyone all riled up.

[Autumn]

24. I think that is completely true,

these Democrats have been VERY complicit for the last couple of years, the corporations own them. Their silence is deafening.

[ClarkUSA]

29. This is another BS tinfoilhat conspiracy theory OP that lacks a shred of evidence.

[Name removed]

32. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Name removed]

34. Deleted message

Message removed by moderator. Click here to review the message board rules.

[ClarkUSA]

35. Wasn't it President Clinton who hired Summers and Geithner in the first place?

So if there's one person to really blame for this mess, it's President Clinton because he signed into place the deregulation legislation
that led to the current mess while he was pandering to the corporate DLC and wingnuts before he left office. Now President Obama
is now trying to clean up the totally fucked-up mess that corporate whores Presidents Clinton and Bush made during the past decade.

What a difference an election makes, huh? Oh, and enjoy the next eight years of President Obama's successful leadership. I'm sure
you'll love every minute.

[paulk]

37. so you agree that Summers and Geithner are a disaster?

that is, after all, the point of the OP...

I certainly wish Obama success in his handling of the economy, I just feel that Summers/Geithner are the wrong people for the job and the current bank bailout plans are bad policy.

Apparently you agree with me concerning Summers and Geithner.

[ClarkUSA]

39. No, I don't. The original sin lies w/Pres. Clinton for being a deregulating DLC corporatist whore.

The OP conveniently ignores this fact while implicitly trying to lay blame at the Obama administration's door. Fortunately,
under President Obama progressive liberal populist direction, Summers has seen the error of his ways now and Geithner's
Treasury plan has started the economy on the long road to recovery. WH employees do what they're told by the boss, after
all, which is why Hillary is no longer sounding/acting like a saber-rattling warmonger as SoS.

Since Geithner's plan hit the radar, a confluence of good news has been available regarding the nascent economic recovery.
Among the indicators cited:

The best stock market month in six years… Consumer confidence and spending are up for the second consecutive month…
Gallup also finds “a significant improvement in public attitudes (about the economy) after nearly two years of downbeat
forecasts.” (That’s significant because consumer spending - and thus economic activity - rises along with consumer
confidence)… Orders for “durable goods” – refrigerators, autos, TVs, etc. – are up for the first time in six months… New
home sales rose at their fastest pace in ten months… Four banks have already paid back their “bailout” loans to the
government and more are hurrying to do so (that some seem to think “bailout” means a giveaway is consequence of the
inaccuracy of the word)… The renaissance of the renewable energy sector of the economy has begun…

Clearly, the economic situation remains precarious. Employment numbers traditionally lag behind the aforementioned
economic indicators, and too many millions are still jobless. But in less than 80 days of the new administration, the
downward spiral has slowed, in some areas stopped, and in others has begun to tick up again. What we are seeing are
the beginnings of a trend.

The Obama budget – including the $634 billion toward health care reform - has cleared its first hurdles in Congress.
Still, this is really bad news for one sector of the economy: the poutrage punditry! But that’s one sky that, lightweight
as a feather, won’t even cause a tremor when it hits the ground.

[Two Americas]

38. the first step

The first step in the campaign was to go to the Wall Street fat cats and win their support. Everything since then has been marketing and salesmanship.

Before he could be in a position to be sold (brilliantly) on the mass American electoral market, of course, Obama first needed to sell himself to the national political and business elite that controls much of the political action behind the scenes. That sales job did not involve deceptive one- or two-message commercials and slogans. It was about candid, up-close meetings in which the candidate made it clear that he posed no substantive challenge to dominant domestic and imperial structures and doctrines. That earlier marketing project, ably recounted by Ken Silverstein and David Mendell <16>, took place in late 2003 and 2004 and made possible the first great rolling out of Brand Obama during the senator's instantly famous keynote address to the Democratic National Convention in late July of 2004.<17> It has continued behind the scenes ever since, with Obama continually reassuring his many big-money sponsors and corporate media enthusiasts that he is not some sort of starry-eyed idealist about to seriously question the interrelated hierarchies and ideologies of corporate-managed state capitalism, empire, and inequality.

The basic Obama message to the nation's ruling class - NOT advertised to the electorate - is that he is safe to concentrated power centers even if occasional populist-sounding slivers make their way into the construction of "Brand Obama." More than that, the campaign's message to the elite has included the promise that Obama will wrap reigning institutions and dogma in fake-progressive rebel's clothing and help repair the damage done to the United States' global public relations image by the vicious and clumsy post-9/11 excesses of the brazenly imperial Cheney-Bush gang.

http://www.zmag.org/znet/viewArticle/19692

Word about Obama spread through Washington’s blue-chip law firms, lobby shops, and political offices, and this accelerated after his win in the March primary. Mike Williams, vice president for legislative affairs at The Bond Market Association and a member of an African-American lobbying association, had been following the race in Illinois and was introduced to Obama through acquaintances in Washington who had known him at Harvard Law School. “We represent Wall Street firms,” Williams said in recounting his first conversation with Obama. “A big issue for us since 2000 is predatory lending. He worked on that issue in Illinois; he was the lead sponsor of a bill there. I talked to him about that. He had a different position from ours. There’s a perception out there that the Democrats are anti-business, and I talked to him about that directly. I said, There’s a perception that you’re coming at this from the angle of consumers. He was forthright, which I appreciated. He said, I tried to broker the best deal I could.” Williams still had his differences with Obama, but the conversation convinced him that the two could work together. “He’s not a political novice and he’s smart enough not to say things cast in stone, but you can have a conversation with him,” Williams said. “He’s a straight shooter. As a lobbyist, that’s something you value. You don’t need a yes every time, but you want to be able to count the votes. That’s what we do.”

Williams subsequently set up a conference call between Obama and a group of financial-industry lobbyists. That, too, went well, and in June of 2004, Williams helped organize “a little fund-raiser” for Obama at The Bond Market Association. “It wasn’t just the financial community. There was a broad cross-section,” he said of the 200 or so people who turned out. “There was overwhelming support, not just people from associations giving $2,000 but from individuals who just wanted to meet him, giving smaller contributions.”

Tom Quinn, a senior partner at Venable and widely considered one of the top lobbyists in town, got a call from Williams and attended the fund-raiser. “I’m on the list. Pretty much everyone in political fund-raising circles knows me,” said Quinn, who works closely with the Democratic National Committee and has been a party power broker since the late 1960s, when he worked on the presidential campaign of Hubert Humphrey. “Every day I get ten or fifteen solicitations. I contribute if I like the candidate and think they have a chance to win.” He was impressed when he heard that Obama had been president of the Harvard Law Review—“That jumped out at me. It showed he had absolute intelligence”—and even more impressed after meeting him. “He’s got a nice personal touch and the ability to kid around a little bit too,” he said. “He’s got star quality.” Quinn contributed $500 to Obama at The Bond Market Association event, and later made calls to people he knew and asked them to donate money as well.

http://www.harpers.org/archive/2006/11/0081275

[Overseas]

41. I do wish Summers had been kept off the team, just as I recoil when Republicans

are appointed to any positions in Democratic administrations involving finance or national security when they have clearly demonstrated their incompetence in those areas.

I don't like to see people who have contributed so significantly to destroying our country being honored by inclusion in the teams tasked with helping us recover.

I was hoping they were included sometimes in that whole "team of rivals" thing, included to show that one had given their discredited ilk a seat at the table, while the administration pursued more sustainable, economically just paths to growth.

But I keep waiting for the progressive side of the Team of Rivals to get a seat at the table.

The Obama Administration has talked about bringing on strong regulation of the financial sector but I haven't seen enough of it yet.

I feel like the progressive side has been told to shout from the outside to push for what we need in some key areas like finance and nonprofit health care.

I am glad that the privatizing profiteering Bush Gang has been deposed and a statesman like President Obama has been elected, but I do wish he had more progressives included on his Team of Rivals.