MILLIONS FOR OBAMA'S
CHIEF ECONOMIC ADVISOR, LARRY SUMMERS
by William Schmidt, Ph.D.
How would you like to make $7.9 million for a few weeks' part-time work?
you ever bite the hand that feeds you so well? That's what Obama's Chief
Economic Advisor got from a half dozen Wall Street firms in 2008, according to newly
released financial disclosures from the White House. Example - Goldman Sachs gave
$135,000 to make a single speech. Details
: This explains the taxpayer billions for banks
the new Geithner-Summers TARP-II Plan where FDIC Public money is used to guarantee
private investors against losses in buying the mostly worthless big bank "Toxic
certainly explains the billions in bonuses for Merrill Lyuch, Bank of America and
explains why Obama is bailing out AIG, so that Goldman Sachs will get the billions
they are owed by the bankrupt AIG. It explains why Obama refuses to order a
level criminal investigation of Wall Street and says the economic collapse Wall Street
created as all perfectly legal, even before there is an investigation about economic
political corruption. The subject of excessive Wall Street salaries have
declared off limits, with Summers insisting the Obama
Administration can do nothing
AIG giving executives bonues worth more than $200 million from taxpayers
Pay reform on Wall Street has very
low priority. This whole affair shows how superficial
cowardly much of the media is. They are infatuated by his eloquence and remain
to how corrupt the Obama Administration looks when closely examined.
Has Summers been bribed to oppose a thorough criminal investigation of the Wall Street
practices that led to the World Financial Collapse in 2007-2009? Has he been bribed
oppose much stricter regulations of Wall Street? At the international G-20 meeting,
resisted pressures from Germany and France for all investment funds, including hedge
funds, to fall under closer governmental scrutiny. Summers has a long hisrory of
government regulation of Wall Street. It was he, as much as Rubin, who got Clinton
accept the de-regulation of Credit Default Swaps and other derviatives. It was he
Clinton to agree to the dismantling of Glass Steagall, so that commercial banks and
investment banks could combine and mortgages could be packaged and sold to the
Street has supported one of own. That keeps him loyal. Quid pro Quo? The
passed to Obama's chief economic advisor to show him how he life could be if he did not
Wall Street's boat. See also
Goldman Sachs Stock Has
Been Rallying Ever
since Obama Became President.
Is it just
"pure chance" that Goldman Sachs' stock has been rallying ever since Obama
became President. GS men make Obama's financial
policies. Goldman has received
billions and billions from taxpayers. In the
first instance, it did not need the money, but
Bush's Treasury Secretary, Paulson, himself the
former CEO of GS, loaned them $20 billion
in last Fall's TARP payments, with no strings
attached. Then this year, the Obama Administration
gave failed insurance companay AIG another $50
billion, with very few conditions, and AIG
promptly paid GS billions that they owed them.
The taxpayer stood 100% behind AIG's private
debts to GS. A handful of Congressmen, led by
Elijah Cummings of Maryland, have demanded
that the US Treasury do what it should have been
doing all along, find out why GS was paid
100% on the dollar and there was no attempt to
"renegotiate and close out these claims with haircuts?"
For more information, click here.
"Competing insurers including Ambac Financial Group Inc.
and the predecessor of Syncora Holdings Ltd. reached
agreements with banks such as Citigroup Inc.
and Merrill Lynch & Co. to cancel similar
contracts at discounts to their expected losses." Source.
The following article is by Glenn Greenwald. It comes from
I would have
preferred not to post it en masse here, but I am busy doing my taxes. How ironic!
of what follows I have previously written about. But it makes me feel like I'm not
crazy. Obama's false populism is a total masquerade. He is in office to
Street insiders, the very people who have caused so much misery around the world.
are links to some of the articles I have written about the Obama's false populism
March 25, 2009
Why Is The Stock
Market Rallying? Wall Street Now Sees That Obama's
Rhetoric Is Designed To Fool The Angry Public.
March 23, 2009
March 19, 2009
Obama Protects and
Defends Wall Street Crooks
Should We Trust Him
with Billions and Billions More?
March 18, 2009 Obama's Back-Door AIG
Caught in A Big Fat
Lie, Obama Feigns Anger.
But Look at All The
Money He Got in Campaign Contributions from Wall Street.
The Real Obama Is A Friend of Wall Street.
February 25, 2009 Obama's
"Pro-Zombie Bank" Policies Will Cost Americans Trillions.
Japan Stagnation: 1990-2003.
February 10, 2009 Nationalization is
Not A Four-Letter Word.
It Will Help in
Many Key Ways.
27, 2009 A
Guide To Obama's Orwellian "Double Speak" about
Banks" and "Bad Banks".
Obama's TARP Is
Part Trap and 100% Crap.
November 23, 2008
Their Control over US Government.
Gets Another $20 Billion without Promising New Loans,
Appointments Should Satisfy Wall Street Cry Babies
Lawrence H. Summers "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),
most amazingly of all -- the
crusade led by Alan Greenspan, former Goldman CEO Robert Rubin (Geithner's
Larry Summers in the late 1990s to block the efforts of top regulators (especially
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
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 derivativeknown as a credit-default
swaphas been a key contributor to the economys recent unraveling. . .
Back in the 1990s, however, Borns 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 Rubins 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 dont 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
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
All of that leads to
things like this, from today's
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
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?
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, orheres 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 folkat 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.
* * * * *
I was on the Moyers program last night after the Black interview -- along
with Amy Goodman -- discussing the media's role in this establishment
corruption (that segment can be viewed here), and yesterday
morning I was on C-SPAN's Washington Journal with the primary topic
being this blatant, sleazy oligarchical control of both the Executive and legislative
branches (which can be seen here).
UPDATE: Just to get a sense for how propagandistic,
sycophantic and fact-free are the most extreme Obama worshippers in our
"journalist" class, consider this recent article from The New
Republic's Noam Scheiber in which he urged
the White House to "free its economic oracle" -- Summers -- and defended
and praised Summers on the ground that "his exposure to Wall Street over the
years has been limited." As Jonathan Schwarz asks,
citing the massive compensation on which Summers engorged himself by feeding at the Wall
Street trough last year: "I wonder what would have constituted
'significant' exposure to Wall Street? Maybe if he'd worked for D.E. Shaw full time?
(Amazingly, Summers was paid $5.2 million for a part-time position.)"