Barack Obama, Bernanke, Bill Clinton, derivatives, DLC, financial reform, Geithner, Goldman Sachs, Hamilton Project, Maria Cantwell, Matt Taibbi, Obama's Big Sellout, Robert Rubin, Summers, Treasury Secretary, Wall Street banks
Senator Maria Cantwell (D-WA) is one the lone voices in Washington D.C. calling for meaningful financial reform, and calling out the White House for its lack of leadership on that issue:
“To hear Sen. Maria Cantwell talk, another economic bubble is building as Wall Street banks — backed by taxpayer bailouts — continue to play the high-risk derivatives markets rather than extend credit to struggling businesses on Main Street.
Cantwell says that Congress and the Obama administration are just watching it happen. The Washington state Democrat is among the most outspoken members of the Senate when it comes to calling for tough new regulations to rein in Wall Street.”
Not just “watching it happen,” Sen. Cantwell. There are no innocent bystanders among the president and his team of economic advisers–enablers and co-conspirators are more accurate terms. More on that later. Back to Sen. Cantwell:
“She’s not looking to pick a fight with the White House, the Federal Reserve or powerful congressional committee chairmen. She was, however, one of 30 senators to vote against the confirmation of Ben Bernanke to a second term as Fed chairman; she temporarily blocked the appointment of the White House nominee to head the Commodity Futures Trading Commission; and she’s been highly critical of Treasury Secretary Timothy Geithner and Larry Summers, the top White House economic adviser.”
Geithner and Summers–see enablers and co-conspirators. But to see the whole picture in focus, it takes a few steps backwards get the proper perspective.
In 1985, following Ronald Reagan’s landslide defeat of Walter Mondale in ‘84, the Democratic Leadership Council (DLC) was formed with the aim of moving the Democratic party away from its “liberal” leanings toward a more “centrist” (read corporate-friendly) position. Bill Clinton chaired the DLC from 1990-1991 before running for, and being elected, president in 1992 as a so-called “New Democrat.”
President Clinton’s director of the newly-created National Economic Council from 1993 to 1995, and his Treasury Secretary from 1995-1999, was Robert Rubin, who spent 26 years at Goldman Sachs prior to joining the Clinton administration.
Matt Taibbi in Obama’s Big Sellout:
“As Treasury secretary under Clinton, Rubin was the driving force behind two monstrous deregulatory actions that would be primary causes of last year’s financial crisis: the repeal of the Glass-Steagall Act.. and the deregulation of the derivatives market.”
Fast forward to April 2006 and the founding of a DLC offshoot, The Alexander Hamilton Project, whose first director was….Robert Rubin. Back to Taibbi:
“There are four main ways to be connected to Bob Rubin: through Goldman Sachs, the Clinton administration, Citigroup and, finally, the Hamilton Project, a think tank Rubin spearheaded under the auspices of the Brookings Institute to promote his philosophy of balanced budgets, free trade and financial deregulation.”
At the founding meeting of the Hamilton Project, one of the featured speakers, and the only United States senator in attendance, was the junior senator from the state of Illinois, Barack Obama.”
Now take a look at President Obama’s economic team:
“At Treasury, there is Geithner, who worked under Rubin in the Clinton years. Serving as Geithner’s “counselor” — a made-up post not subject to Senate confirmation — is Lewis Alexander, the former chief economist of Citigroup, who advised Citi back in 2007 that the upcoming housing crash was nothing to worry about. Two other top Geithner “counselors” — Gene Sperling and Lael Brainard — worked under Rubin at the National Economic Council, the key group that coordinates all economic policymaking for the White House.
As director of the NEC, meanwhile, Obama installed economic czar Larry Summers, who had served as Rubin’s protégé at Treasury. Just below Summers is Jason Furman, who worked for Rubin in the Clinton White House and was one of the first directors of Rubin’s Hamilton Project.
And as head of the powerful Office of Management and Budget, Obama named Peter Orszag, who served as the first director of Rubin’s Hamilton Project.”
…to serve alongside Furman at the NEC [Obama hired] management consultant Diana Farrell, who worked under Rubin at Goldman Sachs. In 2003, Farrell was the author of an infamous paper in which she argued that sending American jobs overseas might be “as beneficial to the U.S. as to the destination country, probably more so.”
…Over at the Commodity Futures Trading Commission, which is supposed to regulate derivatives trading, Obama appointed Gary Gensler, a former Goldman banker who worked under Rubin in the Clinton White House. Gensler had been instrumental in helping to pass the infamous Commodity Futures Modernization Act of 2000, which prevented regulation of derivative instruments like CDOs and credit-default swaps that played such a big role in cratering the economy last year.
Now, considering that tangled web, do you think we’re going to get lip service or meaningful, substantive reform of Wall Street? My money says lots of talk, very little, if any, action.