Geithner must go

Please, President Obama, fire Timothy Geithner today and hire a treasury secretary to fight for the U.S. economy as hard as Geithner fights to protect bankers’ profits.

I know you’re intensely loyal to Geithner and have resisted such calls in the past.

But Mr. President, times and circumstances have changed. For your own good and especially for the good of the country, you should reconsider. You’re in an especially close election and you need to cut yourself loose from the failed policies you’ve pursued for the past four years that have coddled the financial sector at the expense of the rest of the economy.

Your loyalties are with Geithner but his, Mr. President, are with the too big to fail banks, not with the public.

The most recent evidence comes from this Huffington Reports piece which details how Geithner, while president of the New York Fed responded when he heard about the big banks manipulating a key interest rate known as LIBOR when he was chair of the New York Federal Reserve in 2007.

Recently disclosed emails show that while Geithner expressed concerns over the integrity of the LIBOR, or London Interbank Offered Rate, he did little to investigate or stop the manipulation.

What he did to was cut and paste the bankers’ own proposals into his own proposal to the Bank of England about how to address the LIBOR concerns. It should have been an early warning sign of how Geithner and his big bank cronies spoke with one voice – theirs.

The public may not understand just how critical the integrity of LIBOR is, but you do, Mr. President. You know that it’s how it’s used as a benchmark for trillions worth of transactions every day, on everything from complex credit default swaps to credit cards.

You also shouldn’t underestimate the public’s ability to grasp what’s at the root of this LIBOR scandal, which is the same theme that’s underlying JP Morgan London Whale trading losses – that bankers have been manipulating the financial system for their own interests, with your administration either fully cooperating or looking the other way.

Don’t underestimate the ability of the ruthless and hypocritical Republican attack machine to clobber you with those policies even as the Republicans embrace more banker-friendly policies than you are.

They’ll get a good shot this week when Geithner testifies before the House Banking Committee over what he knew and what he did about banks.

The public may not be focused on the LIBOR in the middle of a hot summer, Mr. President, But the scandal is just beginning to wash up on the our shores after causing tremendous damage after it erupted in England, after Barclays Bank acknowledged its own LIBOR manipulation and cut a deal with regulators. Meanwhile the investigation into 16 U.S. banks and their LIBOR shenanigans is just getting cooking.  It could be heating up at the same time as the presidential race.

Mr. President, you have another opportunity to do something that is good politics and good for the country too, and will distinguish your policy on the banks from your opponent’s do-nothing approach.

Get rid of Geithner and begin to chart a new course toward a system not rigged in favor of big bankers and their fat bonuses. We need a treasury secretary who doesn’t measure prosperity solely by the size of bankers’ wealth.

LIBOR / Martin Column - 07/16/2012

Slamming the Door on Democracy

Revolving door just no longer cuts it to describe how large corporate interests have swallowed up the government officials that are supposed to be working in our interest.

First Street, a D.C. insiders’ guide to people, policy and influence peddling, recently published a guide to lobbyists. The highest paid lobbyists were former elected officials, with an average take of $178,000 a year, the next highest paid group was former staffers, with an average take of more than $144,000 a year. Both left the professional lobbyists far behind in their value to their clients.

In public, our corporate leaders use polite language describing themselves in glowing terms like “job creators.”  Republicans wring their hands over regulations; Democrats weep crocodile tears over the plight of the middle class. Meanwhile the politicians feast at the public trough and prepare for lucrative payoffs, I mean careers, in the private sector.

Revolving door implies that these officials are somehow going back and forth between serving the public interest and the corporate interests that lobby them, pay for their campaigns if they’re elected, and then hire them when they’re ready to cash out.

But that’s not what’s happening.

The door doesn’t revolve, it only swings one way. And what’s happening to our government deserves much stronger language than the description of a door.

We have to face up to the fact that under our present system, election to public office, or appointment to key regulatory posts, is for the vast majority is the entryway into a world of legalized prostitution, where major corporations wield nearly absolute power over our government.

At WheresOurMoney.org we’ve proposed a constitutional amendment, 28A, to undo Citizens United, the awful U.S. Supreme Court ruling that unleashes even more unrestricted and unreported corporate money into our political system. That won’t curb lobbying. But rallying around the reversal of Citizens United will focus attention on the culture of legalized corruption that has overtaken our government.

 

 

 

 

 

 

 

Citizens United / Congress / Martin Column - 12/20/2011

Get Off Corporate Crack

I spent last week at the Netroots Nation conference in Minneapolis, a gathering of activists who embrace the progressive label in one way or another.

The news media was there in force, churning out stories about how these progressives are dissatisfied with President Obama’s performance. That’s especially true in his handling of the economy, where unemployment is still too high, the foreclosure crisis is still rampant, the financial sector still hasn’t been adequately reformed after its excesses and Wall Street lobbyists have tangled up in knots even the meager attempts to regulate bankers.

One refrain summed up the frustration with the president’s performance on the economy: “No one has gone to jail.”

But beyond the venting that the media focused on was another, potentially bigger story that has the possibility of leapfrogging the divide between left and right.

That was the emerging demand for a mass movement to rid our politics of the corporate funding that has been as devastating as crack cocaine was in the streets.

Our politicians are hooked on corporate crack, and they will do anything and say anything to get it. They will break any promise, without caring how foolish and hypocritical they look.

This corporate money undermines both parties: Democrats promise to protect workers and consumers but end up promoting ineffective half-measures, while Republicans express support for the free market but actually support the unfettered power of a corporate oligarchy.

I had the opportunity to point out a recent example of how this corporate crack makes fools out of politicians and even the president of the United States during a Netroots session with Jeremy Bird, national strategy adviser to the Obama campaign.

I recounted how one day after reading about a secret meeting between Obama and his Wall Street donors at the White House, I received an email from Obama asking for five bucks, promising a different kind of fundraising campaign that didn’t rely on fat cats.

“Which is it?” I asked Bird. You can read Roll Call’s account here.

Bird responded that Obama’s “multi-faceted” fundraising wouldn’t take money from political campaign committees or lobbyists,  but Wall Street contributions are welcome.

Does the president really see a distinction, or is he just hoping no one is paying attention?

If the politicians are counting on people feeling too cynical and helpless to take action, that may be changing, sparked by the U.S. Supreme Court ruling in Citizens’ United, which said that corporate campaign contributions are a form of free speech so they cannot be restricted.

During another session, John Nichols, the Nation’s crusading Washington correspondent issued a fiery call for a nationwide movement to promote a constitutional amendment to undo Citizens’ United.

He compared the potential impact of such a movement to the impact of  the movement for a constitutional amendment to ban abortion. Though the “right to life” movement hasn’t achieved success. Nichols said, it has changed the nature of the debate.
Back on the subject of overturning Citizens’ United, Nichols said, “I can live without the actual constitutional amendment. But I can’t live without the movement.”

We need a movement that labels corporate crack exactly what it is.  It’s not speech. It’s bribery.

 

Action / Around the Web / Congress / Financial Reform Legislation / Martin Column / Outrage / President Barack Obama - 06/22/2011

Around the Web: Rookie Senator Fumbles Financial Reform

The news media / blogosphere have been having too much fun at the expense of the former Cosmo model who could be the key 41st vote if Republicans decide to kill financial reform.

It’s no shock Sen. Scott Brown would oppose it, given the enthusiastic support he got from Wall Street in his recent election, taking the Massachusetts seat long held by Ted Kennedy.

But Brown apparently got a little flustered when a reporter asked him to explain what exactly he was opposed to. It was one of those trick questions: What areas in the bill would Brown like to see fixed?

Brown responded by asking what the reporter thought. “Well, what areas do you think should be fixed?” Brown said. “I mean, you know, tell me. And then I’ll get a team and go fix it.’’

Eat the Press’s Jason Linkins snorted on Huffington Post: “Yes. Some reporter may want to point out the epic collapse of the derivatives market to Scott Brown, and he will assemble a team of... I don't know...sled dogs? To fix it? Is that good? Will that work?”

Brown told the Globe he opposed a consumer financial protection agency because it would add another layer of regulation.

“Which is, of course, true,” pointed out Washington Monthly’s Political Animal Steven Benen. “ That's the point of the legislation. The financial industry went unchecked and nearly destroyed the global economy. That's why the legislation is being considered – to bring oversight and accountability through regulation.”

Brown also faces some hard second-guessing on a novel argument he made against financial reform on Face the Nation last week: it’s a jobs killer. He asserted that it would cost his state 35,000 jobs – about 17 percent of the state’s financial sector workforce.

When the Globe followed up to nail down Brown’s source for that statement, his staff told the newspaper he got the figures from MassMutual, an insurance company based in the state that has opposed financial reform.

But company officials said Brown had misunderstood them; they were talking about job losses the state had already suffered. Even those figures were grossly inflated, the Globe found. According to the state’s Executive Office of Labor and Workforce Development, the state has lost about 19,000 jobs in the financial sector, which includes the insurance industry, and also at banks, securities firms, investment management companies, and real estate businesses.

A MassMutual official insisted the company agreed with Brown anyway; similar losses could result from financial reform, he insisted. Sen. Brown stood by his earlier statements.

Whatever. A Globe columnist found Brown’s projections, as well as MassMutual’s, preposterous. “The idea that anything in the Senate bill could create additional job losses on a similar scale as the damage caused by the earthquake in the real estate and brokerage industries is simply nuts,” Globe columnist Steven Syre wrote.

Perhaps sensing an opportunity in Brown’s confusion, President Obama put in phone call to Brown from Air Force One.

The president probably didn’t bring up the question posed by Washington Monthly’s Benen: “Do you ever get the feeling that maybe Scott Brown isn't quite ready for prime-time, and that his service in the Senate is more humiliating than it should be?”

Around the Web / Martin Column - 04/21/2010

Go Ahead, Put All Your Eggs in Our Basket

A simple homily illustrates the folly of letting Wall Street govern itself free of restraints so that a handful of financial firms could become indispensable to our nation’s economy: “don’t put all your eggs in one basket.”

One of the precursors of the financial meltdown was the combination of zero enforcement of the antitrust laws and the repeal of Depression-era safeguards against allowing banks to engage in speculation in the stock markets. That created a handful of financial institutions that were individually and collectively so interwoven with our economy that when the crash came last year, we were told that they had to be rescued or else their collapse would take down the entire system. These giant firms were so important that, we were told, they were just “too big to fail.”

Harvey Column - 11/10/2009

Our "jackass" moment

September 21, 2009

One thing we can all agree on about our president: He chooses his words v-e-r-y carefully.

So I wondered about his choice of language and timing when, on the same day he traveled to Wall Street to deliver the bankers a gentle scolding, he got caught on videotape labeling the rapper Kanye West a “jackass” for his behavior on a televised awards show.

You don’t mess with the president: Kanye West got himself right onto Jay Leno’s couch to perform an apology.

Executive Pay / Martin Column / President Barack Obama - 09/21/2009