Geithner, Paulson, and Bernanke at the Oversight Committee Hearings

29 Friday Jan 2010

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Putting different pieces of testimony from yesterday’s hearings before the House Committee on Oversight and Government Reform, it’s easy to see how the New York Federal Reserve’s “backdoor bailout” of Goldman Sachs and other large banks, via insurance giant AIG, became such a convoluted mess–nobody knew anything about it. Least of all the people who were allegedly in charge– Larry, Moe, and Curly former Treasury Secretary Hank Paulson, Fed chairman Ben Bernanke, and then head of the New York Fed and present Treasury Secretary Timothy Geithner.

“Henry Paulson, who was Treasury secretary at the time, told the House of Representatives Oversight and Governmental Affairs Committee that he had no role in the negotiations that settled the banks’ insurance-like contracts, called credit default swaps, with AIG for 100 cents on the dollar..”

Geithner: “I had no role in making decisions regarding what to disclose about the specific financial terms.. and payments to AIG’s counterparties.” To which Rep. Dan Burton replied:

“U.S. Federal Reserve Chairman Ben Bernanke said on Wednesday he was not directly involved in negotiations with the counterparties of insurance giant AIG, having delegated the duties to the New York Fed.”

“It stretches credulity for us to believe that you had no role in this and didn’t know anything about it when your attorneys and people that worked for you were sending emails all around the place and you were the head of the Fed and you didn’t know anything about it. It just doesn’t make any sense to me and I think a lot of my colleagues feel the same way.”

One thing is clear, though. Despite the Three Stooges being completely in the dark, Government Goldman Sachs made out like bandits in the entire sordid affair. I’m sure it’s strictly coincidental that:

“Paulson is an ex-Goldman chief executive, Geithner’s chief of staff previously worked for Goldman, and Dan Jester, a Treasury point man in the AIG bailout, is a Goldman alum.”

That surely had nothing to do with this:

“An unredacted document obtained by the Huffington Post list the damage in detail. Goldman Sachs alone, for instance, got $14 billion in government money for assets worth $6 billion at the time — a de facto $8 billion subsidy, courtesy of taxpayers.”

But yet Geithner testified yesterday that, “In the end, the prices paid for the securities were their fair market value.” Fair to who, Tim?

Geithner also testified that time was of the essence in bailing out AIG, that there was no time to negotiate terms which might be more favorable to the Fed. But yet:

“Neil Barofsky, the special inspector general tracking the use of taxpayer bailout funds…disclosed this week that he’s opened investigations into the Fed’s candor about the matter, recalled that Paulson, Bernanke and Geithner leaned weeks earlier on failing investment bank Bear Stearns to accept $2 a share to turn over its assets to banking goliath J.P. Morgan Chase.”

I guess there aren’t enough Bear Stearns friends in high places.

A "Deficit of Trust," Mr. President? Here’s Why

29 Friday Jan 2010

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President Obama in last night’s State of the Union Address (emphasis mine):

“We face a deficit of trust — deep and corrosive doubts about how Washington works that have been growing for years.  To close that credibility gap, we have to take action on both ends of Pennsylvania Avenue — to end the outsized influence of lobbyists; to do our work openly; to give our people the government they deserve.”

From The Hill this morning:

“A day after bashing lobbyists, President Barack Obama’s administration has invited K Street insiders to join private briefings on a range of topics addressed in Wednesday’s State of the Union.

The Treasury Department on Thursday morning invited selected individuals to “a series of conference calls with senior Obama administration officials to discuss key aspects of the State of the Union address.”

…Another lobbyist said these types of teleconferences occur “all the time.”

…The invitation stated, “The White House is encouraging you to participate in these calls and will have a question and answer session at the end of each call. As a reminder, these calls are not intended for press purposes.

…A handful of lobbyists told The Hill on Thursday morning that they received the invitations and were planning to call in.

Some lobbyists say they are extremely frustrated with the White House for criticizing them and then seeking their feedback. Others note that Democrats on Capitol Hill constantly urge them to make political donations.

One lobbyist said, “Bash lobbyists, then reach out to us. Bash lobbyists [while] I have received four Democratic invitations for fundraisers.”

A “deficit of trust” Mr. President? I can’t imagine why?

Obama Administration “Quietly Maneuvering” to Renew Patriot Act

29 Tuesday Dec 2009

Posted by in George W. Bush, Obama, Politics, Uncategorized, war on terror

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More of George W. Bush’s third term, coming at us while our attention is focused elsewhere:

“With key sections of the U.S. Patriot Act set to expire Dec. 31, the Obama administration – essentially tiptoeing through the corridors of Congress and using the raucous health care debate as cover – has quietly maneuvered for renewal of the controversial provisions, which he opposed as a senator.

This week, with time running out and no time to debate the bill on its merits, Democratic supporters of reauthorization in the Senate tried but fail to win House support to embed the provisions in a separate $626 billion Pentagon funding bill. The House has passed a bill with stronger civil liberties protections, but that version is not expected to survive.”

Well, of course not. We don’t need no stinkin’civil liberties. Safety at all costs, the Constitution and the Bill of Rights be damned.

“Perhaps the most contentious measure is the business records provision, also known as the library provision, which allows the government to seek a court order forcing private entities such as banks, hospitals, and libraries to hand over “any tangible thing” – from library circulation records to medical records – officials think is relevant in a terrorist investigation.”

“Think” is relevant? What happened to innocent until proven guilty? Just another outdated, pre-9/11 concept, I suppose.

“Earlier this year, Sen. Russ Feingold (D-Wisconsin) had worked to place language in the bill strengthening civil liberties protections, but in the judiciary committee the Obama administration worked with Republicans to craft seven amendments, effectively watering down Feingold’s work.”

Ain’t bi-partisanship a beautiful thing?

“Feingold did win an amendment that restricts so-called “sneak and peek” searches that allow the government to enter a home and perform a search without having to inform the subject of the search until months later. The senator’s amendment requires that subjects of sneak-and-peek searches be notified within seven days, unless a judge grants an extension.”
Nice caveat. Now here’s the reality.

“In 2008, the federal government reported 763 sneak-and-peak warrant requests and 528 requests for extensions, as of the year ending Sept. 30, 2008. Four of the applications were denied…Only three of the 763 warrant requests were terrorism related. Sixty-five percent concerned drug investigations.”

Here are the three provisions which the Bush Obama administration is “quietly maneuvering” to renew. More openness and transparency.

“The first…would allow a secret court to continue to permit “roving wiretaps” without the government identifying who is being targeted, or which specific phone lines or communication devices are to be monitored. What officials must do is assert that the target is an agent of a foreign power or a suspected terrorist.

Under the “lone wolf” statute, the U.S. may target for surveillance non-U.S. persons it believes are engaging in terrorism or are preparing to undertake terrorist activities, whether or not that person can be linked to a foreign power or organization. Previously, the government had to establish such a link.”

The second provision, Section 215 of the Patriot Act, permits the FBI to ask a FISA, or secret court, to order the production of any item relevant to a FISA investigation…As with roving wiretaps, the government must assert that the records are relevant to foreign intelligence gathering and/or a terrorism investigation.

What a difference 3 years makes:

“As an Illinois senator in 2005, Barack Obama opposed the core of these provisions when they were up for renewal then, saying he wanted to safeguard the country from terrorist attack but had concerns about seeking business records and the wiretapping language.

Three years later, however, Obama was singing a different tune, voting to allow warrantless wiretaps of Americans’ calls if they were communicating overseas with somebody the government believed was linked to terrorism.”

Quite a “change,” huh?

Fannie and Freddie Get a Blank Check for Christmas

29 Tuesday Dec 2009

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I hope everyone had a great Christmas and that Santa brought you everything you wanted. He certainly was very good to Fannie and Freddie. Only in their case, Santa is the American taxpayer, you and me. One thing is clear, the plutocracy never sleeps, or takes a holiday. How about this for a Christmas Eve news dump?

“The Obama administration pledged on Thursday to back beleaguered mortgage finance giants Fannie Mae and Freddie Mac no matter how big their losses may be in the next three years.”

This brought to you courtesy of the accounting firm of Change, Openness, and Transparency:

“Under a law put in place before the government seized the two mortgage agencies in September 2008, Treasury Secretary Timothy Geithner had until the end of this year to increase the limit without asking Congress for approval…The administration waited until financial markets had closed on Christmas Eve to make the announcement…”

The previous cap on money poured down the Fannie and Freddie black hole was a combined $400 billion, $200 billion each, of which only(?) $111 billion has been used so far. So why change it to “unlimited?” Here’s an explanation:

“If the Treasury is removing the cap, they obviously expect the losses to skyrocket (even though they deny this publicly). This could be happening because the Treasury already knows how much Fannie and Freddie are going to declare as losses this quarter.”

Santa (again, that’s you and me) was also very good to Fannie and Freddie executives:

“But even as the administration was making this open-ended financial commitment, Fannie Mae and Freddie Mac disclosed that they had received approval from their federal regulator to pay $42 million in Wall Street-style compensation packages to 12 top executives for 2009…The compensation packages, including up to $6 million each to Fannie Mae and Freddie Mac’s chief executives, come amid an ongoing public debate about lavish payments to executives at banks and other financial firms that have received taxpayer aid. But while many firms on Wall Street have repaid the assistance, there is no prospect that Fannie Mae and Freddie Mac will do so.”

That’s $6 million each for CEOs whose companies have lost a combined $200 billion. Nice work if you can get it, and you can get it if you happen to have the Treasury Secretary on speed dial.

The Agonist sums up the entire cluster____ about as well as I’ve seen it:

“We are getting very used to watching the federal government operate with only the sketchiest information on what it is doing. Most everything seems to be done behind doors and in secrecy. That’s what makes this brief announcement about Fannie Mae and Freddie Mac so troublesome. When the federal government starts talking about unlimited guaranties to cover future losses, our biggest worry ought to be that whatever large number we can contemplate is included under the word “unlimited”, the government has an even larger number in mind.”

Government of the wealthy and powerful, by the wealthy and powerful, and for the wealthy and powerful. Some things never “change.”

“There Isn’t a Health Care Crisis”

26 Sunday Jul 2009

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I guess not.   “July 3, 2008 (Reuters) – Conservative talk radio host Rush Limbaugh signed an eight-year contract extension worth as much as $400 million with Clear Channel Communications Inc, The New York Times said on its website on Wednesday. Limbaugh’s paycheck of $50 million a year represents a raise of about $14.4 million a year over his current contract, which was paying him $285 million over eight years and was set to expire in 2009, the newspaper’s website said.”

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“Birthers” Hit The Big Time

23 Thursday Jul 2009

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The “birthers,” that formerly fringe element of the Republican Party who still question the citizenship of President Obama, are back in the news because of this video from a townhall meeting held by Congressman Mike Castle of Delaware.

The disturbing part of this clip is not the lady waving her own birth certificate around and screaming “I want my country back,” but the cheers she gets from the others in attendance, and the boos Rep. Castle receives when he says that President Obama “is a citizen of the United States.”

The reason I say this is a formerly fringe element is that this view is quickly becoming the mainstream of the Republican Party and the right.

Legislation has been introduced by Rep. Bill Posey of Florida, and co-sponsored by nine other Republican members of the House, five of whom are from Texas by the way, that would “require the principal campaign committee of a candidate for election to the office of President to include with the committee’s statement of organization a copy of the candidate’s birth certificate.”

De facto leader of the Republican Party, Rush Limbaugh said on his radio program that “Barack Obama has yet to have to prove he’s a citizen.”

When a caller to Lou Dobbs radio show said President Obama was “rushing all these programs through by whatever means, knowing he will soon be exposed as a fake, a fraud, a . . . Kenyan,” Dobbs’ response was, “Certainly your view can’t be discounted.”

Then there was Liz “Baby Dick” Cheney, who was on Larry King Live with James Carville. Instead of saying outright that the “birthers” are, to use Carville’s word “ludicrous,” Ms. Cheney tried to elude the issue by saying,“People are uncomfortable with a president who is reluctant to defend the nation overseas.”

When later asked for a clarification, Cheney gave the equally slippery answer, “I don’t have any question about Barack Obama’s right to be President of the United States.”

What these “birthers,” and those who continue to aid and abet their lunacy, are doing is to not only question Barack Obama’s citizenship, but his legitimacy as president of the United States. Let’s see, what could be their motivation? What is the difference between the 44th president and the previous 43.

Let me think about that, I’ll get back to you.

Bachmann Too Wingnutty For The Wingnuts

03 Friday Jul 2009

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Times are tough in Bachmann-land ladies and gentlemen, even fellow Republicans are asking the Minnesota Congresswoman to put a lid on her babbling about not properly filling out the Census form.

“Three Republican members of the House subcommittee overseeing the 2010 census are asking a fellow Republican, Rep. Michele Bachmann of Minnesota, to back off her boycott of the national population count.

Patrick McHenry of North Carolina, Lynn Westmoreland of Georgia and John Mica of Florida, members of the Oversight and Government Reform Subcommittee on Information Policy, Census and National Achieves, are afraid that her repeated threat to ignore the forms could be contagious.

“Boycotting the constitutionally mandated Census is illogical, illegal and not in the best interest of our country,” they said in a statement Wednesday.”

As if Rep. Bachmann being called out by her Republican colleagues wasn’t bad enough, two of the three, McHenry and Westmoreland are not exactly the more reasonable members of the Republican caucus themselves.

Here’s Congressman McHenry on the mission of the GOP between now and the mid-term elections:

“We will lose on legislation. But we will win the message war every day, and every week, until November 2010. Our goal is to bring down approval numbers for Pelosi and for House Democrats. That will take repetition. This is a marathon, not a sprint.”

And it was Congresswoman Westmoreland who said this last November when asked about Michelle Obama:

“Just from what little I’ve seen of her and Mr. Obama, Senator Obama, they’re a member of an elitist-class individual that thinks that they’re uppity.”

When these 2 tell you to rein it in, and call you “illogical,” you’re really out there.

The response from the Bachmann camp comes via spokeswoman Debbee Keller:

“Congresswoman Bachmann can not be reached, but we appreciate their views and hope to be able to work with them to keep ACORN — which has earned public mistrust through its repeated voter registration fraud — out of the Census.”

Wait a minute, “cannot be reached?” Two questions come to mind. Does the Appalachian Trail run through Minnesota, and has anybody seen Governor Sanford?

A Public Option Will Destroy Competition? What Competition?

30 Tuesday Jun 2009

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The next time you hear one of our elected officials in Washington rail against President Obama’s proposed public option on health insurance by saying it will “destroy the marketplace” (Richard Shelby) or that there’s “plenty of competition in the private insurance market” (Joe Lieberman) remember this report from Heath Care for America Now (HCAN).

The only thing in danger of being destroyed is the monopoly the large insurance companies presently hold, and which they are willing to make any amount of campaign contributions (aka bribes) to continue.

Consider the following:

“In the past 13 years, more than 400 corporate mergers have involved health insurers, and a small number of companies now dominate local markets but haven’t delivered on promises of increased efficiency. According to the American Medical Association, 94 percent of insurance markets in the United States are now highly concentrated.”

“Highly concentrated,” according to the U.S. Justice Department means that one company holds more than a 42 % share of the market, a level reached in 31 states.

“In Hawaii, Rhode Island, Alaska, Vermont, Maine, Montana, Wyoming, Arkansas, and Iowa, the two largest health insurers control at least 80% of the statewide market.”

In Senator Shelby’s own state of Alabama, Blue Cross Blue Shield controls 83% of the statewide market, the highest rate in the nation for a single company. Is this what he is intent on preserving? Apparently so.

Right here in Texas, two companies, Blue Cross Blue Shield and Aetna, control 59% of the market. Our own Senator John Cornyn was one of 9 GOP senators who sent a letter to President Obama which said “a federal government takeover of our healthcare system would take decisions out of the hands of doctors and patients and place them in the hands of a Washington bureaucracy.” I suppose placing those decisions in the hands of an insurance company “bureaucracy” is acceptable.

But having a monopoly can be a very profitable enterprise:

“Profits at 10 of the country’s largest publicly traded health insurance companies rose 428 percent from 2000 to 2007. In 2007 alone, the chief executive officers at these companies collected combined total compensation of $118.6 million—an average of $11.9 million each.

That is 468 times more than the $25,434 an average American worker made that year. Moreover, the health insurance industry invests more in buying back its own stock and rewarding its shareholders than in improving system operations, reducing premiums, or in developing ways to pay doctors and hospitals fairly.”

For those of us who pay premiums however, it’s not such a sweetheart deal. They have risen more than 87%, on average, over the past 6 years. From 1999-2007, while the average U. S. wage growth was 29%, the average premium growth was 120%.

This is the status quo that Shelby, Lieberman, Cornyn, the big insurance companies, and their lobbyists want to maintain. It’s up to us to let them know that another 15 years of business as usual is unacceptable.