How Obama Got Rolled By Wall Street
This one is not positive for 'Dear Leader.'
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By Dr. Pitchfork
If you thought that Obama was clueless about finance and markets when he took office a year and a half ago; if you suspected that he was nothing more than putty in the hands of Geithner and Summers; or if you wondered whether the banksters had somehow managed to play him like a fiddle, then stop wondering. You were right.
Michael Hirsh's recent Newsweek article reveals that Obama gave Wall St. the kid glove treatment, not because he's a smart guy who made some politically un-popular decisions, but because Summers and Geithner told him to. Obama even considered breaking up the TBTF banks at one point (would've been nice), but Geithner and Summers wouldn't let him. FinReg? Team Obama fought tooth and nail to water down the bill in order to please Wall St.
None of this is news to regular readers of The Bail, but the myth of Barack Obama -- the strong, smart, confident leader -- is now officially dead.
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From Newsweek
Barack Obama was “incredulous” at what he was hearing, said one of his top economic advisers. The president had spent his first year in office overseeing the biggest government bailout of the financial industry in American history. Together with Federal Reserve chairman Ben Bernanke, he had kept Wall Street afloat on a trillion-dollar tide of taxpayer money. But the banks were barely lending, and the economy was still mired in high unemployment. And now, in December 2009, the holiday news had started to filter out of the canyons of lower Manhattan: Wall Street’s year-end bonuses would actually be larger in 2009 than they had been in 2007, the year prior to the catastrophe. “Wait, let me get this straight,” Obama said at a White House meeting that December. “These guys are reserving record bonuses because they’re profitable, and they’re profitable only because we rescued them.” It was as if nothing had changed. Even after a Depression-size crash, the banks were not altering their behavior. The president was being perceived, more and more, as a man on the wrong side of an incendiary issue.
And so, prodded forward by Vice President Joe Biden—the product of a working-class upbringing in Scranton, Pa.—the president began to consider getting tougher on Wall Street. “We kept revisiting it,” said the economic adviser (who recounted details of the meetings only on condition of anonymity). One big proposal the White House hadn’t adopted was Paul Volcker’s idea of barring commercial banks from indulging in heavy risk taking and “proprietary” trading. In Volcker’s view, America’s major banks, which enjoy federal guarantees on their deposits, had to stop putting taxpayer money at risk by acting like hedge funds. This had become a grand passion for Volcker, a living legend renowned for crushing inflation 30 years before as Fed chairman. He had long been skeptical of financial deregulation. Beyond the ATM, Volcker asked, what new banking products had really added to economic growth? Exhibit one for this argument was derivatives, trillions of dollars in “side bets” placed by Wall Street traders. “I wish somebody would give me some shred of neutral evidence about the relationship between financial innovation recently and the growth of the economy,” he barked at one conference.
Yet for most of that first year, Obama and his economic team had largely ignored Volcker, a sometime adviser. Treasury Secretary Tim Geithner and chief economic adviser Larry Summers still questioned whether Volcker’s proposals were feasible. Now Obama was pressing them—very gingerly—to reconsider. “I’m not convinced Volcker’s not right about this,” Obama said at one meeting in the Roosevelt Room. Biden, a longtime fan of Volcker’s, bluntly piped up: “I’m quite convinced Volcker is right about this!”
Sep 1, 2010 at 9:23 AM
Reader Comments (9)
Here is some food for thought...
What do the following people have in common? Paul Volcker, Mervyn King, Jean-Claude Trichet, Paul Krugman, Jacob Frenkel (JP Morgan Chase & Bank of Israel), Stanley Fischer (Bank of Israel), Zhou Xiaochuan (China), Masaaki Shirakawa (Japan), Philipp Hildebrand (Swiss National Bank), and E. Gerald Corrigan (Goldman Sachs), William McDonough (Bank of America Merrill Lynch), William R. Rhodes (Citigroup and Citibank) and a few more?
I will give you a hint...Paul Volcker is the Chairman.
http://www.group30.org/pubs/pub_1460.htm
This is not for your benefit DB and not for yours Dr. P, this is for the other people here like me who want to better understand who is really in control.
Just because i don't give the group of 30 much coverage is that i don't believe they have that much power...volcker will be dead within a decade...tall people don't live very long lives and he's already 83 i think...
It's an elite professional group...very elite...only 30 members obviously, but the conspiracy theories are overblown...
In the future you need to preface these posts of yours with the disclaimer that you believe the Apollo missions were a hoax and that we never went to the Moon...basically Capricorn One...which by the way has been so heavily discredited...I've spent time with Buzz Aldrin at a wedding...drinking beers...he went to the fucking moon, trust me...
You have tons of knowledge but a poorly-aligned filter for truth, in my opinion...
That’s funny and a bit ironic even though it was not your intent. As for the beer summit with Buzz, that’s pretty cool. I mean no disrespect to Buzz Aldrin and I am glad that even at his age, he felt obligating to punch this guy in the face…
http://www.youtube.com/watch?v=FUI36tPKDg4
What is the truth? I think the government tells a lot of tall tales often to promote unpopular objectives and aims. For example, the crap told to the American people about Obamacare. Today, we don’t have the ability or will to go the moon but we do have plenty of ICBMs. What I find most interesting in this world is human nature, human behavior, psychology and philosophy. Heck, maybe you are right, the world is full of miraculous feats of technology and adventure that haven’t been duplicated. How was Puma Punku built? Was that technology lost as well?
http://www.youtube.com/watch?v=vKuE9bVqe8M
starts at about 2:00
I was specifically not trying to initiate a discussion with you or Dr. P. What would I have to gain? You don’t challenge my opinions. You don’t present arguments to even test my opinions or knowledge. You presented an op-ed which I thought was an invitation to opposing views. This is an open forum for the most part. I hope it stays that way. When and if I am proved wrong, my philosophy is highly adaptable.
As for my “poorly aligned filter for truth”, I will respond the same way Jim Rogers responded when asked about why he does not agree with Bernanke and the central bankers...When you start agreeing with me, then I will have to start worrying.
I didn't ask you to stop your line of questioning...you are not being censored...2 other points...my joke about tall people not living long was intended..he's 83...he's had a long life...and to say that your opinions don't meet a challenge around here is a stretch...
And i've never read that we don't have the ability to go to the moon...we just need to keep schoolteachers off the mission...
I like this clip because Obama said that the Obamacare vote was more important than the economy and jobs. It is the same thing that he promised us again in today’s speech.
The cliip is actually about Obama and why he has continued to delay his trip to Indonesia. It is easy to understand why Obama is afraid to go to Indonesia. Indonesia has a lot of information on Obama and he may not have cut enough deals to ensure that they will not spill the beans on him and his past. They may know that he went to Pakistan before he started Columbia and most likely used an Indonesian passport. They may know a lot about Barry Soetoro and surprisingly, I think that want to worship him. They like Kenya think of Obama as home grown.
I told you about his adopted sister Lia that died in January. This was not made into news because his life is not an open book. Very few people even knew about Lia Soetoro. Obama called “Mbak Nun”.
The truth is out there DB, you may not respect my filter but I can put two and two together. Obama has a lot of secrets. Many of them will put more doubts in the minds of Americans about whether he is fit or qualified to be POTUS. Some of the secrets may lead to his resignation.
I like many other Americans have caught wind of something that smells rotten to the core. You will notice that I didn’t say birth certificate once, oh f***, that doesn’t count.
http://www.youtube.com/watch?v=-xC5LDF7P2E
I hope you watch it. I wonder if Obama knows or remembers the truth.
and thanks for introducing me to mattie feine...she looks like a great candidate...will have to profile her soon...
We stopped and picked up the stranded damsel, Obama while we partied on the U.S.S Ditchbush. Now he stands by while the pirates hiding under his skiff attack and eliminate the crew and raid the purser's safe.
I seriously doubt Obama remembers what he did this morning.