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

Muppets v. Goldman

It’s been a rough couple of months for the Muppets. First Fox News anchor Eric Bolling denounces their new movie as dangerous left-wing propaganda because it portrays a villainous oil company executive.

Then Goldman Sachs executive Greg Smith quits his job and discloses in a scathing hatchet job of the firm’s culture that his fellow bailed-out bankers refer to their clients in a derogatory way as Muppets.

And what do they mean by that?

Hmmm. Maybe they think Muppets are puppets that are manipulated by their handlers. Maybe Goldman Sachs bankers imagine us to be lifeless sacks of cloth and yarn without spirit and voice, but we’re not.

And no self-respecting Muppet would put up with the shenanigans of Goldman Sachs (though I suppose their corporate owners, the Walt Disney Co., might).

The Muppets have always had a strong populist streak – they articulate sharp critiques of the Greed-is-Good Wall Street culture that Goldman appears proud to embody.

Check out the song “Money,” co-written by comedian Stan Freberg and Ruby Raskin. Performed by Dr. Teeth, it ridicules the rampant desire for more, more, more money at the expense of everything and everyone else.

At the end of the song, Dr. Teeth yanks a slot-machine handle on the side of his piano – which pays off.

If you have any doubt about whether the Muppets would side with the 1 percent or the 99 percent, check out their version of a “A Christmas Carol.”

In his farewell exposé—beyond his Muppet revelation— Smith merely confirms what we’ve already known: Goldman Sachs and the other powerful too-big-fail institutions believe they can get away with screwing their clients by protecting themselves with high-level political clout, bought with political contributions and cemented with interlocking relationships between the government and the firms.

As Robert Scheer points out, it was just a day before Smith unloaded on Goldman that a former top aide to Treasury Secretary Timothy Geithner, Jake Siewert, became the managing director and global head of Goldman’s corporate communications. Siewert is just the latest of a long line of public officials to cash in at the big banks.

How perfect that a high-level member of the Obama administration, which has chosen to align itself with the interests of the big banks time and time again, will now be the one to design Goldman’s defense against the bad publicity stemming from Smith’s oped.

Scheer, along with Matt Taibbi—another astute reporter/commentator on the financial collapse and its aftermath—are full of praise for Smith’s stepping out so publicly.

For myself, I wish that Smith had been willing to step up and connect Goldman’s policies to the financial collapse, not to mention the role Goldman has continued to play in rigging our political system to escape the consequences of its devastating greed and fraud.

That may be too much to ask of somebody on his first day out of the protective Goldman bubble. Make no mistake, it’s not just clients the firm has manipulated for its own gain.

Goldman and the other to-big-to-fail banks have turned us all into puppets, holding over our heads the specter of fear, and pulling the strings to secure a hefty back-door bailout for themselves.

As for the Muppets, I’m sure they’ll weather their current troubles with aplomb. Hopefully their creators are busy at work on a scheme for revenge.

I’ve never seen a Muppet either shut up or stand still while someone ties her hands behind her back. It’s the rest of us I’m worried about.

Goldman-Sachs / Martin Column / Too Big To Fail - 03/17/2012

Will Afghan Bailout Trump U.S. Homeowners?

At least you know where the Tea Party stands. If it’s a government program, they want to end it.

The Democrats are murkier. They propose tepid solutions to serious problems like the foreclosure crisis, then when their programs don’t work it, ends up reinforcing the Tea Party’s arguments that government doesn’t work.

So the Tea Party-driven Republicans come along and want to whack the Obama administration’s failed foreclosure prevention scheme known as the Home Affordable Modification program. They would probably want to whack it even if it was working, but that’s another subject.

The Tea Party doesn’t offer anything in its place. Homeowners are pretty much on their own at the mercy of the banks.

So much for the American Dream.

Many people have pointed out that the HAMP program is something between an abject failure and a scam that rips off already beleaguered homeowners.

The Obama administration doesn’t offer so much of an argument in its defense as a hapless shrug. In this video, Treasury Secretary Timothy Geithner acknowledges that the foreclosure prevention program amounts to a “tragic, terrible mess.”

But hey, the administration says, it’s better than nothing.

Meanwhile, the foreclosures continue while authorities investigate massive fraud by the banks in the foreclosure process.

This is not a debate calculated to offer much confidence that our public officials can deal effectively with the problems that afflict those of us who live in the reality-based community.

I was reflecting on this tawdry spectacle while reading about the latest developments in the latest “too big to fail” bank bailout to strike at U.S. taxpayers – this one in Kabul, Afghanistan. My colleague Harvey Rosenfield warned about this brewing fiasco several weeks ago.

Apparently the wildly corrupt officials and their cronies used the bank as their private piggy bank, and the bank’s imminent collapse is now a greater threat to Afghanistan’s security than the Taliban.

As recently as last September, officials were offering assurances that U.S. taxpayers would not have to pay for a bailout. Now apparently if we don’t cough up $1 billion the war and the country will be lost and all the previous billions we’ve squandered there will have been wasted.

So we can’t afford a dime to help homeowners in this country but we must spend $1 billion to bail out the Afghans.

I don’t expect the Democrats to put up much of a fight against such an outrage.

I hope the Tea Party stands strong on this one.

 

 

 

Around the Web / Foreclosures / Martin Column / Outrage / Too Big To Fail - 03/02/2011

If You Can't Explain it, You Can't Regulate it

Imagine if government officials who controlled some crucial aspect of our lives, say the war in Afghanistan, spoke about it in public only in another language.

Greek, say.

Only those who understood Greek would be able to talk about it or ask questions.

Now imagine that those who controlled the policy were unelected, appointed by a mysterious group of Greek-speaking weapons manufacturers whose business would benefit from the war.

Got it?

That’s about what we have in the U.S. Federal Reserve, a quasi-government agency that speaks in its own language, whose members are appointed by banks, and are not accountable to anybody else.

Federal Reserve / Martin Column - 11/24/2009