Category Archives: Obama

Another Kabuki Dance on Consumer Financial Protection Agency

07 Sunday Mar 2010

Posted by in Congress, Democrats, Financial Crisis, financial regulation, lobbyists, Obama, Politics, special interests, Wall Street

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If there’s anything transparent in this administration of “openness and transparency” it’s the way the well-rehearsed and often-repeated three-act Kabuki theater plays out their alleged attempts at any major reform on any particular issue. It’s as easy to see through as a pane of glass and as easy to see coming as a freight train. Here’s how it goes, again and again:

Act I.  The president professes to want (but doesn’t actually want) real reform on a given issue. The House passes a bill containing real reform. The Senate at first seems to embrace it, but then claims ‘woe is us, we can’t pass it without Republican votes.’

Act II. The legislation is watered-down in search of bi-partisan support that the administration and the Senate leadership knows they aren’t going to get in spite of the watering-down.

Act III. What started out as “reform” becomes so weakened as to be of no real affect. Thus, the original goal of the president and his former colleagues and current accomplices in the Senate is achieved–give the appearance of doing something while actually doing nothing.

The latest example is on the creation of the Consumer Financial Protection Agency. In July of last year:

“The Obama administration…proposed legislation for a financial oversight agency designed to protect consumers and investors from unscrupulous deals…The White House sent Congress a 152-page draft bill to create the Consumer Financial Protection Agency, which it says would offer greater consumer protections for such financial products as mortgages, credit cards and loans by establishing simpler and more transparent rules and regulations.

“Consumer protection will have an independent seat at the table in our financial regulatory system,” Treasury Secretary Timothy F. Geithner said.”

At the time, Senate Banking Committee chairman Chris Dodd “called the administration’s bill a “bold and aggressive plan” to defend against a future financial crisis.”

In December the House passed a sweeping financial reform bill which contained an independent consumer protection agency.

Fast forward to Thursday of last week:

“Creating a powerful and independent consumer agency, which is strongly opposed by the financial industry and Republicans, has been the major roadblock in drafting a bill that could pass in the Senate…Dodd has been searching for months for a bipartisan compromise, a move made more urgent after a Republican, Scott Brown, won the special Massachusetts Senate election in January, giving the GOP enough votes to block any Democratic legislation. After negotiations with Sen. Richard C. Shelby (R-Ala.) reached an impasse, Dodd began working with Sen. Bob Corker (R-Tenn.).

The “compromise” reached by Dodd and Corker would take away the independence of the agency and instead making it an arm of the Federal Reserve. This despite the fact that Dodd himself said 4 months ago that Fed’s record on consumer protection was an “abysmal failure,” and more recently, “criticized the Fed’s previous inaction as a main reason for creating such an entity, noting that the central bank took 14 years before enacting rules in 2008 to protect consumers from unscrupulous mortgage lending.”

And where does the Obama administration come down? It appears to be the usual fence-straddling:

“Treasury Secretary Timothy F. Geithner and Valerie Jarrett, a senior White House advisor, met Wednesday with representatives from consumer, labor and other organizations that support a strong, stand-alone consumer agency and told them that “strengthening consumer protections remains a central objective of our financial reform efforts,” according to an administration official.

Although Geithner and Jarrett said they would not accept a bill unless it included a consumer agency with “real independence,” they did not specifically rule out housing it in the Fed or another agency.”

But appearances can be deceiving. With a little reading between the lines one can see what the administration really wants. Geithner is the former president of the New York Fed, Valerie Jarrett is a former member of the board of directors of the Chicago Fed. It seems to be too much of a coincidence that these were the two administration representatives to the negotiations. I would surmise that the president wants the agency in the Fed.

Why? It follows the script–giving the appearance of doing something–creating a consumer protection agency, while actually doing nothing–putting the agency inside the Fed, whose track record on enforcing any kind of regulation is, to use Sen. Dodd’s word, abysmal.

Mission accomplished. The peasants are appeased and the corporate masters are not angered. The campaign contributions continue to flow, and business as usual continues.

President Obama, Have You No Principles?

06 Saturday Mar 2010

Posted by in Bill of Rights, Constitution, Justice Department, Obama, Politics, war on terror

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An open letter to President Obama and Attorney General Holder:

President Obama, have you no principles sir? Is there nothing for which you are willing to take an unwavering stand? Nothing which you are unwilling to sacrifice on the altar of political expediency? Nothing that will deter your quest for the Holy Grail of bi-partisanship? Nothing that is done without a moistened finger in the wind gauging current public opinion? If this story from the Washington Post about the decision not to try Khalid Sheikh Mohammed and the other 9/11 co-conspirators in civilian court is true, sadly the answers to all of the above questions appear to be no, nothing.

Do you remember your Nobel Peace Prize acceptance speech, sir? Let me refresh your memory (emphasis added):

“We lose ourselves when we compromise the very ideals that we fight to defend. And we honor — we honor those ideals by upholding them not when it’s easy, but when it is hard.”

This is one of those times, sir, one of those times when it is hard. This is one of those times when ones true character is tested. When the right thing to do and the popular thing to do are not one and the same, as history has shown us they seldom are.

Our constitutional rights and protections–in which our system of justice is anchored–and the rule of law are not, and should never be, subject to political compromise and deal-making. The Fifth and Sixth Amendments are not bargaining chips to be dealt away in the pursuit of Republican support for the closing of the prison at Guantanamo Bay.

Furthermore, who is prosecuted and how they are prosecuted is not the discretion of the president of the United States, and most assuredly not that of his chief of staff. That duty falls to the man whom you nominated and whom the Senate confirmed as Attorney General, Eric Holder. Once upon a time we had a Justice Department independent from political influence. That line of demarcation was blurred, if not completely erased, by the previous administration. You were elected on the promise of restoring that independence, but apparently that was only campaign rhetoric.

Attorney General Holder, you have a duty here too, sir. By virtue of the position which you hold, you are chief law enforcement official in this country. If you believe strongly that KSM and the others should be tried according to Article III, and if you want to be seen as more than an attorney-on-retainer who does the bidding of the White House, you have the obligation to tell the president to either make this decision yours and your alone, based solely on legal grounds, or resign your office.

One of your predecessors in the office of Attorney General faced a similar situation. He was ordered by the president to do something which went against his principles and was in violation of his duties as AG. Rather than be seen as a puppet of that administration, he resigned on the spot, as did his deputy when given the same order. His name was Elliot Richardson and the president was Richard Nixon, in the constitutional crisis now known as the infamous “Saturday Night Massacre” of the Watergate era.

This is no less a constitutional matter, sir. Your obligation is no less than was Mr. Richardson’s.

Another Financial Crisis “More Than Predictable, It’s Inevitable”

04 Thursday Mar 2010

Posted by in bailout, Congress, economy, Financial Crisis, Goldman Sachs, Obama, Politics, Wall Street

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Remember the economy and that little thing we had not too long ago called…what was it…oh yeah, the financial crisis. While Congress and the White House spend “the next few weeks” mired in the never-ending saga of health care reform, there are some potential problems which could affect us a lot sooner than 2014. If legislators have some spare time they might want to give it a glance:

“Even as many Americans still struggle to recover from the country’s worst economic downturn since the Great Depression, another crisis – one that will be even worse than the current one – is looming, according to a new report from a group of leading economists, financiers, and former federal regulators.

…Without more stringent reforms, “another crisis – a bigger crisis that weakens both our financial sector and our larger economy – is more than predictable, it is inevitable,” Johnson says in the report, commissioned by the nonpartisan Roosevelt Institute.”

In the report, the panel, which includes Rob Johnson of the United Nations Commission of Experts on Finance and bailout watchdog Elizabeth Warren, warns that financial regulatory reform measures proposed by the Obama administration and Congress must be beefed up to prevent banks from continuing to engage in high-risk investing that precipitated the near-collapse of the U.S. economy in 2008.

But in typical Congressional fashion, “beefing up” financial regulations and “stringent reforms” aren’t on the agenda:

“The proposal” [that would ban the banks receiving federally insured deposits from engaging in trading which benefits the banks and not their customers] “faces strong resistance in Congress, where lawmakers have shown little appetite for adding to the prolonged debate on overhauling financial regulations.”

The reason for Congress’ “little appetite” should come as no great surprise:

“Goldman Sachs and Morgan Stanley would probably be the Wall Street firms most affected by the ban, known informally as the Volcker Rule…”

Goldman most affected? We can’t have any of that. Chris Dodd needs a job starting in January.

Treasury Official Leaves to Begin Lobbying

02 Tuesday Mar 2010

Posted by in lobbyists, Obama, Politics, special interests, Wall Street

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This is a recording. Some things never change:

“Barack Obama has made cracking down on K Street a signature cause of his presidency. But a year into his tenure, the executive branch’s revolving door has already started to turn with one senior official making the exodus from administration insider to hired gun.

Munchus will be a test case for Obama’s tightened revolving-door policy, which prohibits former administration officials from lobbying the executive branch for the remainder of his administration.”

Damon Munchus, the principal liaison between the Treasury Department and Congress regarding financial institutions and capital markets, signed on Monday as a managing director with financial services lobbying boutique the Cypress Group, whose clients include some of the nation’s biggest banks [Citigroup, Freddie Mac, and Bank of America to name three].

What happened to this:

“President Obama has consistently made clear that he will strive to lead the most open, transparent, and accountable government in history.  Whether it is reigning in the influence of lobbyists in Washington, bringing unprecedented accountability to federal spending, opening doors to engagement with the American public, or shutting down the “revolving door” that carries special interest influence in and out of the government, the highest standards will be sought in every thing the federal government does.”

And this portion of the “pledge” all incoming members of the administration, including Mr. Munchus, signed:

“5.Revolving Door Ban — Appointees Leaving Government to Lobby… I also agree, upon leaving Government service, not to lobby any covered executive branch official or non-career Senior Executive Service appointee for the remainder of the Administration.”

Did you catch the loophole? “I agree not to lobby any executive branch official.” No mention of lobbying Congress, which falls into Mr. Munchus’ area of expertise:

“Munchus worked in the Office of Legislative Affairs, which deals directly with the Hill. His position as Deputy Assistant Secretary for Banking and Finance gave him intimate knowledge not just of the process but of key lawmakers…That’s invaluable information to investors.”

But in the spirit of bi-partisanship:

“Munchus’ arrival at Cypress Group comes on the heels of another addition to the firm, Republican Jeb Mason. Mason, former deputy assistant secretary for business affairs under then-Treasury Secretary Henry Paulson, was tasked with business outreach and coalition building in the Bush administration.”

In fact:

“With the acquisition of Munchus, Cypress can now boast to employ high-level officials from four straight Treasury Secretaries.”

And the band plays on….

The Great American Kabuki Dance

28 Sunday Feb 2010

Posted by in Obama, Politics, Wall Street

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“Politics is not about ideology – it’s little more than an over dramatic stage play  .  After the first year of the Obama administration the change he talked about has not occurred.  The reason is simple, policy is not made in the White House or the halls of congress – it’s made in the boardrooms of a few large corporations and those boardrooms are occupied by sociopaths who don’t care about anything but their own power and wealth.”

Rahm Goes to the Capitol to Get Pelosi’s Mind Right

27 Saturday Feb 2010

Posted by in Congress, Democrats, health care, Obama, Politics, Progressives

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Don’t do it, Nancy. Don’t do it:

“Rahm Emanuel ventured to the Capitol Friday evening to hash out health care strategy with House Speaker Nancy Pelosi (D-Calif.), a White House aide confirmed.

Senior Hill aides speculated to HuffPost that Emanuel, the White House chief of staff, would bring the message that the House must move first, with a pledge from Senate Democrats that they would follow.”

The meeting comes as Democrats are searching for a way to get to the health care finish line, though neither chamber wants to move first. Senate leaders want the House to pass the Senate bill first, after which the Senate would use reconciliation to fix the legislation to the liking of the Senate. House leaders contend that the votes aren’t there for the Senate bill if the upper chamber doesn’t move. The House, after two centuries of watching the Senate lag behind, doesn’t trust that it’ll act.

Dear Speaker Pelosi,

You’re being conned. The Senate wants the Senate bill without the modifications. President Obama wants the Senate bill without the modifications. He only proposed them as bait, next come the switch. And trust me, President Obama is the master of the bait and switch. Just ask those who voted for him in November of ‘08. Ask me, I fell for it. If you go first and pass the Senate bill the promised reconciliation fixes will NEVER happen. Don’t say you weren’t warned.

Sincerely,
A victim of OBSS (Obama Bait and Switch Syndrome)

The Case of the Vanishing Justice Department E-Mail

27 Saturday Feb 2010

Posted by in Justice Department, Obama, Politics, torture

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The legacy of Rose Mary Woods is alive and well at the Justice Department:

“Large batches of e-mail records from the Justice Department lawyers who worked on the 2002 legal opinions justifying the Bush administration’s brutal interrogation techniques are missing, and the Justice Department told lawmakers Friday that it would try to trace the disappearance.”

And in a stroke of what I’m sure is pure coincidence, what’s missing just happens to be from a crucial time period:

“The Justice Department’s Office of Professional Responsibility…pushed to get access to a range of e-mail records and other internal documents from the Justice Department to aid in its investigation.

But it discovered that many e-mail messages to and from John Yoo, who wrote the bulk of the legal opinions for the Justice Department’s Office of Legal Counsel, were missing…Also deleted were a month’s worth of e-mail files from the summer of 2002 for Patrick Philbin, another Justice Department lawyer who worked on the interrogation opinions. Those missing e-mail messages came during a period when two of the critical interrogation memos were being prepared.”

But never fear, the Obama DoJ is on the case. Kinda, sorta, maybe:

“Gary Grindler, the acting deputy attorney general who represented the Justice Department at Friday’s hearing, said he did not think there was “anything nefarious” about the deletion of the e-mail messages, but he could not explain what happened to them.

He said he had directed administrative personnel at the Justice Department to review the situation and determine whether there were problems in the department’s system for automatically archiving internal documents. He said the review would also seek to recover the missing e-mail messages if possible.”

Why do I get the feeling that in the spirit of the cover-up looking forward, not back, recovering the missing messages will be found impossible. Just a hunch.

Rubin May Testify Before Financial Crisis Commission

27 Saturday Feb 2010

Posted by in economy, Financial Crisis, Obama, Politics, Wall Street

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One of the architects of the financial meltdown, and the Godfather of the Obama economic team, might have some ‘splainin’ to do. From Bloomberg:

“Robert Rubin, the former U.S. Treasury secretary who later advised Citigroup Inc. as the bank piled up subprime-mortgage losses, may soon face his first public grilling on the 2008 financial crisis.

The Financial Crisis Inquiry Commission investigating the worst economic slump since the Great Depression, plans to ask Rubin to testify in April, said two people with knowledge of the commission’s decisions.

Ask? How about subpoena?

“Rubin’s reputation dimmed  after the U.S. bailed out New York-based Citigroup with $45 billion and AIG had to be propped up because of losses on derivatives. When Rubin was President Bill Clinton’s Treasury secretary, he fought efforts to regulate derivatives.”

His reputation dimmed? Barack Obama didn’t get that memo:

“[Obama] named Rubin to be an economic adviser during the 2008 presidential campaign, and two Treasury protégés, Lawrence Summers and Timothy Geithner are top officials in the White House. Summers, 55, is chief economic adviser and Geithner, 48, is Treasury secretary.”

And that’s not all:

“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.

Democrats Cave on Torture Amendment: So What Else Is New?

26 Friday Feb 2010

Posted by in Constitution, Democrats, Dick Cheney, Justice Department, Obama, Politics, Republicans, terrorism, torture, Uncategorized, war on terror

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While all the attention in Washington yesterday was focused on the posturing and pontificating over health care reform, there was something else going on. Democratic Congressman Sylvestre Reyes, chairman of the House Intelligence Committee, proposed an amendment to the 2010 Intelligence Authorization Act. The amendment is called the Cruel, Inhuman, and Degrading Interrogation Prohibition Act of 2010 which, in essence, does nothing more than codify what already exists in Articles 1 and 16 of the United Nations Convention Against Torture. You know that treaty which under Article VI of the Constitution is supposed to be the “supreme Law of the Land,” but was signed and ratified pre-9/11 so is no longer applicable, apparently.

The amendment prohibits such acts as waterboarding, beatings, sleep deprivation, and mock executions among others. In other words, pretty much the chart toppers on the Cheney/Ashcroft/Rumsfeld/Yoo/Bybee hit parade. It applies to any “U.S. national, or any officer, employee, contractor, or subcontractor of the Federal government,” with punishment for violation being “fine or imprisonment for not more than 15 years, or both,” unless death results. Then the imprisonment is “any term of years or for life.”

And right on cue, here came the torture defenders, led by Liz Cheney, playing the predictable “keeping us safe” card:

“Late last night, Democrats in the House of Representatives inserted a provision dubbed “The Cruel, Inhuman, and Degrading Interrogation Act of 2010” into the intelligence authorization bill. This new language targets the US intelligence community with criminal penalties for using methods they have deemed necessary for keeping America safe. These methods have further been found by the Department of Justice to be both legal and in keeping with our international obligations.”

Sorry Liz, but just because they were found legal by the pretzel logic of Daddy’s Justice Department (and sadly, found to be merely “poor judgment” by the current Justice Department) doesn’t mean they are legal. It just means that laws and treaties have become an a la carte menu in post 9/11 America. We now pick and choose which ones to enforce and which ones to ignore. Again, sadly.

According to Marc Ambinder at the Atlantic, the amendment is also not popular at 1600 Pennsylvania Avenue (sigh):

“The White House isn’t happy; they’ve already threatened to veto the bill because it, in their mind, it infringes upon the rights of the executive branch by forcing the administration to disclose more about intelligence operations to more members of Congress.”

That sounds a lot like a previous administration to me. (Double sigh).

And speaking of right on cue, all House Republicans had to do was give the insinuation that they would accuse Democrats of being ‘soft on terror’ and ‘coddling terrorists’ and the gutless, spineless, Democratic leadership pulled the bill.