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The Wall Street TARP Gang Wants to Take Away Your Social Security

November 10, 2010 Leave a comment

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By Dean Baker – November 9, 2010, 8:01AM

Just over two years ago, the Wall Streeters were running around Congress and the media saying that if they don’t immediately get $700 billion the world will end. Since they own large chunks of both, they quickly got their money.

Even more important than the hundreds of billions of loans issued through the TARP was the trillions of dollars of loans and guarantees from the Fed and the FDIC. This money came with virtually no strings attached. It kept Goldman Sachs, Citigroup, Morgan Stanley, and Bank of America and many others from collapsing. As a result, folks like Goldman CEO Lloyd Blankfein are again pocketing tens of millions a year in wages and bonuses, instead of walking the unemployment lines. Instead, 15 million ordinary workers are being told to just get used to being unemployed; it’s the “new normal.”

But wait, it gets worse. The thing about Wall Streeters is that no matter how much money you give them, they always want more. Now they are using their political power and control over the media to attack Social Security.

This effort is being led by billionaire investment banker Peter Peterson. Mr. Peterson has personally profited to the tune of tens of millions of dollars from the “fund managers’ tax subsidy,” an obscure provision of the tax code that allows billionaires to pay a lower tax rate than schoolteachers and firefighters. However, Peterson believes in giving back. He has committed $1 billion to an effort that is intended to take away the Social Security benefits that people have worked and paid for.

As part of this effort, Peterson set up a whole new foundation, the Peter G. Peterson Foundation. He and/or his foundation created a “news service,” the Fiscal Times, which is intended to promote the view that we have no choice but to cut Social Security. The Fiscal Times has entered into agreements with the Washington Post and other credible newspapers to provide material.

Peterson is also funding the creation of a high school curriculum which is intended to tell our children that the in the future the country will be too poor to finance Social Security. He funded a silly exercise called “America Speaks,” which was supposed to convince an assembly of selected participants that we must cut Social Security after a daylong immersion in Peterson-style propaganda. (The people didn’t buy it.) And now his crew is spending $20 million on an ad campaign to convince people the world will end if we don’t cut Social Security.

Attacks on Social Security have been fended off in the past and it is possible that this one will be too. It is an incredibly popular and successful program. It does exactly what it was supposed to do. It provides a modest income to the retired and disabled, and their families, to ensure that people who have spent their lives working will not fall into poverty. It is also extremely efficient, with administrative costs that are less than 1/20th as large as the costs of private insurers.

It also has very little fraud. We know this because earlier this year the Washington Post made a big point of hyping mistaken payments to federal employees than involved less than 0.01 percent of Social Security spending. If substantial fraud did exist, the Washington Post wouldn’t have to hype small change to try to discredit the program.

The really incredible part of this story is that we should be talking about increasing Social Security benefits. Benefits are quite low by international standards. The portion of wage income replaced by Social Security is considerably lower than the retirement benefit provided by the systems in Australia, Canada, Germany and most other wealthy countries.

As a result, many of the retirees who are dependent almost entirely on Social Security have incomes that are only slightly above the poverty line. A modest increase in benefits could make a big difference in these people’s standard of living.

In addition, the near retirees, the people directly in the gun sights of the Wall Street TARPers, have just seen most of their wealth destroyed by the collapse of the housing bubble. The Wall Streeters now want to kick them yet again, by taking away Social Security benefits that they have already paid for.

If Congress and the media worked for the public, we would be debating Wall Street speculation taxes right now. Insofar as we need to do something about the deficit in the longer term, taxing Wall Street speculation is a far more economic desirable route than taking away the Social Security benefits that ordinary workers have already paid for. We could easily raise more than $1.5 trillion over the next decade with a broadly based speculation tax than would have almost no impact on anyone except the Wall Street crew.

Even the IMF is now pushing higher taxes on the Wall Street types, recognizing the enormous waste and rents in the financial sector. But the media and Congress do not respond to economic reality, they respond to money. And Peter Peterson and the Wall Street crew are not paying for an honest discussion of the country’s fiscal and economic problems. They are financing a rigged debate that is intended to result to even more money flowing to Wall Street and less to those who work for a living.

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One Law for the Rich, One Law for the Poor

November 9, 2010 Leave a comment

http://www.slate.com/id/2273916/

The author, Joseph Stiglitz,  won a Nobel prize in economics.

The mortgage debacle in the United States has raised deep questions about “the rule of law,” the universally accepted hallmark of an advanced, civilized society. The rule of law is supposed to protect the weak against the strong, and ensure that everyone is treated fairly. In America in the wake of the subprime mortgage crisis, it has done neither.

Part of the rule of law is security of property rights: If you owe money on your house, for example, the bank can’t simply take it away without following the prescribed legal process. But in recent weeks and months, Americans have seen several instances in which individuals have been dispossessed of their houses even when they have no debts.

To some banks, this is just collateral damage: Millions of Americans—in addition to the estimated 4 million in 2008 and 2009—still have to be thrown out of their homes. Indeed, the pace of foreclosures would be set to increase—were it not for government intervention. The procedural shortcuts, incomplete documentation, and rampant fraud that accompanied banks’ rush to generate millions of bad loans during the housing bubble has, however, complicated the process of cleaning up the ensuing mess. To many bankers, these are just details to be overlooked. Most people evicted from their homes have not been paying their mortgages, and, in most cases, those who are throwing them out have rightful claims. But Americans are not supposed to believe in justice on average. We don’t say that most people imprisoned for life committed a crime worthy of that sentence. The U.S. justice system demands more, and we have imposed procedural safeguards to meet these demands.

But banks want to short-circuit these procedural safeguards. They should not be allowed to do so.

To some, all of this is reminiscent of what happened in Russia, where the rule of law—bankruptcy legislation in particular—was used as a legal mechanism to replace one group of owners with another. Courts were bought, documents forged, and the process went smoothly. In America, the venality is at a higher level. It is not particular judges who are bought, but the laws themselves, through campaign contributions and lobbying, in what has come to be called “corruption, American-style.”

It was widely known that banks and mortgage companies were engaged in predatory lending practices, taking advantage of the least educated and most financially uninformed to make loans that maximized fees and imposed enormous risks on the borrowers. (To be fair, the banks tried to take advantage of the more financially sophisticated as well, as with securities created by Goldman Sachs that were designed to fail.) But banks used all their political muscle to stop states from enacting laws to curtail predatory lending.

When it became clear that people could not pay back what was owed, the rules of the game changed. Bankruptcy laws were amended in 2005 to introduce a system of “partial indentured servitude.” An individual with, say, debts equal to 100 percent of his income could be forced to hand over to the bank 25 percent of his gross, pre-tax income for the rest of his life, because the bank could add on, say, 30 percent interest each year to what a person owed. In the end, a mortgage holder would owe far more than the bank ever received, even though the debtor had worked, in effect, one-quarter time for the bank.

When this new bankruptcy law was passed, no one complained that it interfered with the sanctity of contracts: At the time borrowers incurred their debt, a more humane—and economically rational—bankruptcy law gave them a chance for a fresh start if the burden of debt repayment became too onerous.

That knowledge should have given lenders incentives to make loans only to those who could repay them. But lenders perhaps knew that, with the Republicans in control of government, they could make bad loans and then change the law to ensure that they could squeeze the poor.

With one out of four mortgages in the United States under water, there is a growing consensus that the only way to deal with the mess is to write down the value of the principal (what is owed). America has a special procedure for corporate bankruptcy, called Chapter 11, which allows a speedy restructuring by writing down debt, and converting some of it to equity.

It is important to keep enterprises alive as going concerns, in order to preserve jobs and growth. But it is also important to keep families and communities intact. So America needs a “Homeowners’ Chapter 11.”

Lenders complain that such a law would violate their property rights. But almost all changes in laws and regulations benefit some at the expense of others. When the 2005 bankruptcy law was passed, lenders were the beneficiaries—they didn’t worry about how the law affected the rights of debtors.

Growing inequality, combined with a flawed system of campaign finance, risks turning America’s legal system into a travesty of justice. Some may still call it the “rule of law,” but it would not be a rule of law that protects the weak against the powerful. Rather, it would enable the powerful to exploit the weak.

In today’s America, the proud claim of “justice for all” is being replaced by the more modest claim of “justice for those who can afford it.” And the number of people who can afford it is rapidly diminishing.

Submitted by dan fey

http://vidrebel.wordpress.com/

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Exclusive Excerpt: America on Sale, From Matt Taibbi’s ‘Griftopia’

October 24, 2010 Leave a comment

Source

In the summer of 2009 I got a call from an acquaintance who worked in the Middle East. He was a young American who worked for something called a sovereign wealth fund, a giant state-owned pile of money that swims around the world in search of things to buy.

Sovereign wealth funds, or SWFs, are huge in the Middle East. Most of the bigger oil-producing states have massive SWFs that act as cash repositories (with holdings often kept in dollars) for the revenues generated by, for instance, state-owned oil companies.

Unlike the central banks of most Western countries, whose main function is to accumulate reserves in an attempt to stabilize the domestic currency, most SWFs have a mission to invest aggressively and generate huge long-term returns. Imagine the biggest and most aggressive hedge fund on Wall Street, then imagine that that same fund is fifty or sixty times bigger and outside the reach of the SEC or any other major regulatory authority, and you’ve got a pretty good idea of what an SWF is.

My buddy was a young guy who’d come up working on the derivatives desk of one of the more dastardly American investment banks. After a few years of that he decided to take a step up morally and flee to the Middle East to go to work advising a bunch of sheiks on how to spend their oil billions.

Aside from the hot weather, it wasn’t such a bad gig. But on one of his trips home, we met in a restaurant and he mentioned that the work had gotten a little, well, weird.

“I was in a meeting where a bunch of American investment bankers were trying to sell us the Pennsylvania Turnpike,” he said. “They even had a slide show. They were showing these Arabs what a nice highway we had for sale, what the toll booths looked like . . .”

I dropped my fork. “The Pennsylvania Turnpike is for sale?”

He nodded. “Yeah,” he said. “We didn’t do the deal, though. But, you know, there are some other deals that have gotten done. Or didn’t you know about this?”

As it turns out, the Pennsylvania Turnpike deal almost went through, only to be killed by the state legislature, but there were others just like it that did go through, most notably the sale of all the parking meters in Chicago to a consortium that included the Abu Dhabi Investment Authority, from the United Arab Emirates.

There were others: A toll highway in Indiana. The Chicago Skyway. A stretch of highway in Florida. Parking meters in Nashville, Pittsburgh, Los Angeles, and other cities. A port in Virginia. And a whole bevy of Californian public infrastructure projects, all either already leased or set to be leased for fifty or seventy-five years or more in exchange for one-off lump sum payments of a few billion bucks at best, usually just to help patch a hole or two in a single budget year.

America is quite literally for sale, at rock-bottom prices, and the buyers increasingly are the very people who scored big in the oil bubble. Thanks to Goldman Sachs and Morgan Stanley and the other investment banks that artificially jacked up the price of gasoline over the course of the last decade, Americans delivered a lot of their excess cash into the coffers of sovereign wealth funds like the Qatar Investment Authority, the Libyan Investment Authority, Saudi Arabia’s SAMA Foreign Holdings, and the UAE’s Abu Dhabi Investment Authority.

Here’s yet another diabolic cycle for ordinary Americans, engineered by the grifter class. A Pennsylvanian like Robert Lukens sees his business decline thanks to soaring oil prices that have been jacked up by a handful of banks that paid off a few politicians to hand them the right to manipulate the market.

Lukens has no say in this; he pays what he has to pay. Some of that money of his goes into the pockets of the banks that disenfranchise him politically, and the rest of it goes increasingly into the pockets of Middle Eastern oil companies. And since he’s making less money now, Lukens is paying less in taxes to the state of Pennsylvania, leaving the state in a budget shortfall. Next thing you know, Governor Ed Rendell is traveling to the Middle East, trying to sell the Pennsylvania Turnpike to the same oil states who’ve been pocketing Bob Lukens’s gas dollars.

It’s an almost frictionless machine for stripping wealth out of the heart of the country, one that perfectly encapsulates where we are as a nation.

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More pages from this excerpt available at the URL above.

http://vidrebel.wordpress.com/

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Wall Street Sees World Economy Decoupling From U.S.

October 4, 2010 Leave a comment

By Simon Kennedy – Oct 4, 2010

Wall Street economists are reviving a bet that the global economy will withstand the U.S. slowdown.

Just three years since America began dragging the world into its deepest recession in seven decades, Goldman Sachs Group Inc., Credit Suisse Holdings USA Inc. and BofA Merrill Lynch Global Research are forecasting that this time will be different. Goldman Sachs predicts worldwide growth will slow 0.2 percentage point to 4.6 percent in 2011, even as expansion in the U.S. falls to 1.8 percent from 2.6 percent.

Underpinning their analysis is the view that international reliance on U.S. trade has diminished and is too small to spread the lingering effects of America’s housing bust. Providing the U.S. pain doesn’t roil financial markets as it did in the credit crisis, Goldman Sachs expects a weakening dollar, higher bond yields outside the U.S. and stronger emerging-market equities.

“So long as it doesn’t turn to flu, the world can withstand a cold from the U.S.,” Ethan Harris, head of developed-markets economic research in New York at BofA Merrill Lynch, said in a telephone interview. He predicts the U.S. will expand 1.8 percent next year, compared with 3.9 percent globally.

That may provide comfort for some of the central bankers and finance ministers from 187 nations flocking to Washington for annual meetings of the International Monetary Fund and World Bank on Oct. 8-10. IMF chief economist Olivier Blanchard last month predicted “positive but low growth in advanced countries,” while developing nations expand at a “very high” rate. He will release revised forecasts on Oct. 6.

‘Partially Decoupled’

“The world has already become partially decoupled,” Nobel laureate Joseph Stiglitz, a professor at New York’s Columbia University, said in a Sept. 20 interview in Zurich. He will speak at an IMF event this week.

Sixteen months after the world’s largest economy emerged from recession, the U.S. recovery is losing momentum, with factory orders falling 0.5 percent in August and unemployment forecast to increase to 9.7 percent in September from the previous month’s 9.6 percent, according to the median estimate of 78 economists in a Bloomberg News survey.

Their predictions don’t include another contraction, with growth estimated at 2.7 percent this year and some indicators showing progress. Orders for capital goods rose 5.1 percent in August and the number of contracts to purchase previously owned homes increased 4.3 percent; both were higher than forecasts.

China Manufacturing Accelerates

Even so, emerging markets are showing more strength. Manufacturing in China accelerated for a second consecutive month in September, and industrial production in India jumped 13.8 percent in July from a year earlier, more than twice the June pace.

“It seems that recent economic data help to confirm the story of emerging-markets outperformance,” said David Lubin, chief economist for emerging markets at Citigroup Inc. in London.

The gap in growth rates between the developing and advanced worlds is widening, he said. Emerging economies will account for about 60 percent of global expansion this year and next, up from about 25 percent a decade ago, according to his estimates.

The main reason for the divergence: “Direct transmission from a U.S. slowdown to other economies through exports is just not large enough to spread a U.S. demand problem globally,” Goldman Sachs economists Dominic Wilson and Stacy Carlson wrote in a Sept. 22 report entitled “If the U.S. sneezes…”

Limited Exposure

Take the so-called BRIC countries of Brazil, Russia, India and China. While exports account for almost 20 percent of their gross domestic product, sales to the U.S. compose less than 5 percent of GDP, according to their estimates. That means even if U.S. growth slowed 2 percent, the drag on these four countries would be about 0.1 percentage point, the economists reckon. Developed economies including the U.K., Germany and Japan also have limited exposure, they said.

Economies outside the U.S. have room to grow that the U.S. doesn’t, partly because of its outsized slump in house prices, Wilson and Carlson said. The drop of almost 35 percent is more than twice as large as the worst declines in the rest of the Group of 10 industrial nations, they found.

The risk to the decoupling wager is a repeat of 2008, when the U.S. property bubble burst and then morphed into a global credit and banking shock that ricocheted around the world. For now, Goldman Sachs’s index of U.S. financial conditions signals that bond and stock markets aren’t stressed by the U.S. outlook.

Weaker Dollar

The break with the U.S. will be reflected in a weaker dollar, with the Chinese yuan appreciating to 6.49 per dollar in a year from 6.685 on Oct. 1, according to Goldman Sachs forecasts.

The bank is also betting that yields on U.S. 10-year debt will be lower by June than equivalent yields for Germany, the U.K., Canada, Australia and Norway. U.S. notes will rise to 2.8 percent from 2.52 percent, Germany’s will increase to 3 percent from 2.3 percent and Canada’s will grow to 3.8 percent from 2.76 percent on Oct. 1, Goldman Sachs projects.

Goldman Sachs isn’t alone in making the case for decoupling. Harris at BofA Merrill Lynch said he didn’t buy the argument prior to the financial crisis. Now he believes global growth is strong enough to offer a “handkerchief” to the U.S. as it suffers a “growth recession” of weak expansion and rising unemployment, he said.

Giving him confidence is his calculation that the U.S. share of global GDP has shrunk to about 24 percent from 31 percent in 2000. He also notes that, unlike the U.S., many countries avoided asset bubbles, kept their banking systems sound and improved their trade and budget positions.

Economic Locomotives

A book published last week by the World Bank backs him up. “The Day After Tomorrow” concludes that developing nations aren’t only decoupling, they also are undergoing a “switchover” that will make them such locomotives for the world economy, they can help rescue advanced nations. Among the reasons for the revolution are greater trade between emerging markets, the rise of the middle class and higher commodity prices, the book said.

Investors are signaling they agree. The U.S. has fallen behind Brazil, China and India as the preferred place to invest, according to a quarterly survey conducted last month of 1,408 investors, analysts and traders who subscribe to Bloomberg. Emerging markets also attracted more money from share offerings than industrialized nations last quarter for the first time in at least a decade, Bloomberg data show.

Room to Ease

Indonesia, India, China and Poland are the developing economies least vulnerable to a U.S. slowdown, according to a Sept. 14 study based on trade ties by HSBC Holdings Plc economists. China, Russia and Brazil also are among nations with more room than industrial countries to ease policies if a U.S. slowdown does weigh on their growth, according to a policy- flexibility index designed by the economists, who include New York-based Pablo Goldberg.

“Emerging economies kept their powder relatively dry, and are, for the most part, in a position where they could act countercyclically if needed,” the HSBC group said.

Links to developing countries are helping insulate some companies against U.S. weakness. Swiss watch manufacturer Swatch Group AG and tire maker Nokian Renkaat of Finland are among the European businesses that should benefit from trade with nations such as Russia and China where consumer demand is growing, according to BlackRock Inc. portfolio manager Alister Hibbert.

“There’s a lot of life in the global economy,” Hibbert, said at a Sept. 8 presentation to reporters in London.

Asset Bubbles

The increasing focus on emerging markets may present challenges for their policy makers as the flow of money into their economies risks fanning inflation, asset bubbles and currency appreciation. Countries from South Korea to Thailand have already intervened to weaken their currencies, along with taking steps to restrict capital inflows.

Stephen Roach, nonexecutive Asia chairman for Morgan Stanley, remains skeptical of decoupling. He links the optimism to a snapback in global trade from a record 11 percent slide in 2009. As that fades amid sluggish demand from advanced economies, emerging markets that rely on exports for strength will “face renewed and formidable headwinds,” he said.

“Decoupling is still a dream in much of the developing world,” said Roach, who also teaches at Yale University in New Haven, Connecticut.

‘Year of Recoupling’

The Goldman Sachs economists argue history is on their side. The U.K., Australia and Canada all continued growing amid the U.S. recession of 2001 as the technology-stock bust passed them by, while America’s 2006-2007 housing slowdown inflicted little pain outside its borders, they said. The shift came when the latter morphed into a financial crisis, prompting Goldman Sachs to declare in December 2007 that 2008 would be the “year of recoupling.”

The argument finds favor with Neal Soss, New York-based chief economist at Credit Suisse. While the supply of dollars and letters of credit that fuel international commerce dried up during the turmoil, that isn’t a problem now, so the rest of the world can cope with a weaker U.S., he said.

“Decoupling was a good idea then and is a good idea now,” Soss said.

To contact the reporter on this story: Simon Kennedy at skennedy4@bloomberg.net

To contact the editor responsible for this story John Fraher at jfraher@bloomberg.net

®2010 BLOOMBERG L.P. ALL RIGHTS RESERVED.

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Obama’s Pick For Summers’ Replacement Will Signal His Direction

September 22, 2010 Leave a comment

Rob Kall
by Rob Kall

 

Will Obama pick another Goldman Sachs, Bankster, member of the team of econoterrorists economists who caused the economic meltdown? Or will he appoint someone who has credentials which indicate he or she’s been a stalwart supporter of main street families and workers?

Lawrence Summers, it appears, is leaving, because his two year pass at Harvard is about to run out, and he’d lose his tenure and have to re-apply. So much for the “ask not what my country can do for me, ask what I can do for my country” attitude. That’s a joke. Summers is all about what’s good for him and his.

Summers, known for his brains, is credited with being one of the chief architects of Obama’s failed top down, save the too-big to fail banks and pretend to throw money at infrastructure economic recovery program, signed into law in February.

He’s one of those smart people who do very stupid things– making negative remarks about women when he was Harvard president was a previous big one. Amazing how really smart people can do the big stupid so horrendously.

The good news could be that Summers and his approach, which helped lead to the economic disaster we’re living through, will soon be gone. The bad news is that he will probably be replaced by someone worse. Obama is getting better at picking people whose bios don’t scream of “fox in the hen house” syndrome.

Rupert Murdoch‘s Wall Street Journal reports, or, one might even say, ebulliently gloats, that Obama is looking to replace Summers with a more corporate pedigree– apparently, a number of female executives. The article reports,

Two people familiar with the matter said the president is considering a senior corporate executive as a successor to lead the National Economic Council, answering criticism that the Obama administration lacks private-sector experience and is aloof from corporate America.

The WSJ mentions Anne Mulcahy, former CEO of Xerox corporation as a prime candidate, and lists some other possibilities,

Other candidates include Deputy National Economic Council Director Diana Farrell, who came to the White House from McKinsey & Company, and Laura Tyson, an economist at the University of California, Berkeley, who served in the Clinton administration as chair of the Council of Economic Advisers.

Are they kidding? Obama’s not corporate friendly enough? Well, he still has Geithner, another bankster.
Progressive Change Campaign Committee co-founder Stephanie Taylor commented on Summers’ prospective departure.

“This is a big victory for anyone who voted for change in 2008 only to see Summers work from the inside to water down Wall Street reform, block President Obama’s promise to protect Net Neutrality, and urge other pro-corporate positions. While we feel bad for Harvard students and faculty who have to deal with Summers again, Harvard’s loss is America’s gain. When President Obama fills this important economic position, Americans need him to appoint a champion for regular working folks, not Wall Street tycoons — someone in the mold of Elizabeth Warren, Byron Dorgan, Robert Reich, Joseph Stiglitz, Paul Krugman, and Sheila Bair.”

This kind of response would make progressives and liberals and most Democrats happy. But then, we have to consider what Summers, under Obama’s direction, actually DID, as the Progressive Change Committee reports,

But, as the Progressive Change Campaign Committee documents,

Summers consistently tried to water down Wall Street reform. Newsweek’s Michael Hirsch: “chief economic adviser Larry Summers still questioned whether Volcker’s proposals were feasible…Obama hadn’t acted much like FDR in the ensuing months. Instead he had faithfully channeled Summers and Geithner and their conservative approach to stimulus and reform.” Summers also opposed breaking up the big banks — see Huff Post and Simon Johnson.

blocked Susan Crawford, a big Internet freedom advocate, from advancing Net Neutrality within the White House — eventually forcing her out. (Net Neutrality prohibits Internet providers from picking which websites work fast or slow for their customers based on the financial interests or political views of the Internet providers. This non-discrimination rule has been a crucial part of the Internet’s level playing field, until challenged in recent years by big cable and phone companies.)

When President Obama entered office, he did a Clinton administration transplant, filling a plethora of appointments with former Clinton staffers and people who worked for them. Summers, Geithner and former OMB director Orszag worked former Clinton Treasury Secretary economic disaster creator Robert Rubin, who made over $50 million (possible over $100 million) working for Citibank, including helping to block regulation of derivatives trading and repeal Glass Steagall. Of course, Rubin, before working as treasury secretary, was, for 20 years at Goldman Sachs, including as co-chairman.
Tim Geithner, Wikipedia reports, was Under Secretary of the Treasury for International Affairs (1998-2001) under Treasury Secretaries Robert Rubin and Lawrence Summers. Summers was his mentor, but other sources call him a Rubin protégé Geithner was also president of the Federal Reserve Bank of New York, director of Policy Development and Review Department at the International Monetary Fund and was a senior fellow at the COuncil on Foreign Relations (CFR.) Rubin is now co-Chair of the Council on Foreign Relations as well.

Summers has a history of supporting de-regulation and prevention of supervision of trading in derivatives and the like. Another globalist, he was also chieff economist for the world Bank. It’s hard to imagine Summers not being invited by Rubin to have some role in the Council on Foreign Relations, and, of course, Summers will surely go back to collecting big speaking fees.

The Council on Foreign Relations is considered the most influential think tank in the US. Of course, Xerox, which Anne Mulcahy, the number one mentioned candidate by the Wall Street Journal, to replace Summers, is a member.

Realistically, we can expect Obama to select someone who will continue the policies of Summers, who can work well Geithner or his replacement. That means they will be strong supporters of globalization, opponents to strong corporate oversight and regulation and friendly to the interests of global corporations. This would be inconsistent with Obama’s professed interests, on the campaign trail, in reining in transnational tax avoidance.

But I could be wrong. Summers departure does offer president Obama an opportunity to throw progressives, main street and mainstream Democrats a bone– some positive action that would actually help Democrats at the polls. So far, while he’s helped with fund-raising, it doesn’t seem like the White House team has been willing to actually make appointments or take substantive action to help main street. Even his latest infrastructure funding proposal will have a very limited and long term effect on the endangered middle class.

Follow Rob Kall on Twitter: www.twitter.com/robkall


Rob Kall, Host, Bottom-up Radio Show WNJC 1360, publisher, OpEdNews.com and Futurehealth.org
Posted: September 22, 2010 04:21 PM

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