Obama's Perilous Compromise with Looters

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Looters have taken over America's Treasury. The executives who successfully ransacked their own banks, investment funds and insurance companies have set their eyes on Obama's stimulus. Tragically, the architects of the current economic fiasco have been placed in charge of America's recovery.

President Obama has made an enormous mistake. Instead of cracking down on serial looters and complicit regulators, he wants to guarantee the financial sector's obligations, which are several times larger than America's economy. This is a Ponzi scheme far beyond Bernie Madoff's imagination. Simply put: The government is breaking the rules of capitalism to reward the most reckless capitalists. Such is not the "creative destruction" Schumpeter hailed.

Is it unfair to criticize President Obama before he and his experienced team have a chance to enact new laws and regulations? For guidance on this question, let's turn to the father of capitalism, Adam Smith. Here's how Smith concludes Wealth of Nations, Book I:

Quote:

"The proposal of any new law or regulation of commerce which comes from this order , ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."

Consider Obama's Economic Czar, Larry Summers, who comes fresh from heading a highly secretive hedge fund. As Clinton's Secretary of the Treasury, Summers championed the repeal of the Glass-Steagall Act, which led directly to the excessive risk-taking by newly enlarged financial entities deemed too big to fail when they failed. Additionally Summers and Robert Rubin lobbied intensely for legislation signed by Bill Clinton that forbid government oversight of derivatives, the toxic instruments that have poisoned balance sheets around the world. Summers' former deputy Tim Geithner, the new Secretary of the Treasury, has supervised more recent rip-offs. He bears significant responsibility for the Lehman Brothers' catastrophe and for the flawed Fannie Mae, Bear Stearns and AIG bailouts. At Geithner's confirmation hearing, he must be asked repeatedly why the looters were rewarded and why plans giving taxpayers more equity were rejected.


more:
http://www.huffingtonpost.com/jeffrey-klein/obamas-perilous-compromis_b_155004.html

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1. inconceivable

One more time, like leading cattle to the slaughter, people will believe anything that supports status quo. There are the winners and there are

winner worshipers. Like the mortgages. If you put all the money out there to rewrite the bad ARM mortgages, no money will be lent because the

people can't pass the minimum qualifications. The banks ain't going to lend the money. They don't have to. They are going to sit on it. Its like

sending humanitarian aid to a starving country. The leaders will get most of the benefit. It was a joke to watch the congressional investigations

about AIG and the other firms. The congressmen were asking questions that someone should have been asking them. Like putting a co-conspirators in a

crime as the prosecutor and judge.

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2. I've been railing against Geithner since the news first came out

of his appointment. Treasury Secretary is perhaps the THE most important position of Obama's team right now, considering this crisis.

Most DU'rs response:

"Geez! Obama's not even President yet! Give the guy a break!"

and

"Obama's much smarter than us!"

and

"I think Geithner's a GREAT choice!"

Whhheeeeeeeeeeeeeee!!!!!!!

Meet the New Boss....

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3. Barack Obama needs to re-introduce Glass-Stegall to begin to end this crisis

Barack Obama needs to re-introduce Glass-Stegall to begin to end this crisis

Appearing on BBC Radio 4's Today programme over the festive period, this columnist was labelled "miserable". But, as I explained to John Humphrys, our financial predicament is no laughing matter.

By Liam Halligan
Last Updated: 7:12PM GMT 04 Jan 2009

What did the great radio inquisitor want me to do? Insist that if the Government keeps borrowing and listeners merrily load-up their credit cards during the post-Christmas sales, then everything will be fine?

Well it won't be. The UK - like most Western economies - is in a grave situation. Our money markets are frozen, denying vital liquidity to millions of credit-worthy firms. Unless the inter-bank market reboots, then even hastily revised 2009 Western growth forecasts - down from 2-3pc a year ago to a 1-2pc contraction now - could turn out to be too optimistic. We face the very real danger of chronic unemployment across the so-called "advanced economies" and widespread social unrest.

Yet the Keynesian bail-out solution, accepted as "essential" by practically every mainstream commentator, will do nothing to unfreeze our credit markets. It's even more dangerous than the disease it's supposed to cure.

Panicked politicians have now closed their ears to reason and are ripping up the rules. And as the bail-out continues, and the investment banks channel public funds to senior executives, the vested interests that caused this crisis are adding insult to injury.

With failure and incompetence thus rewarded, huge damage is being done to the very fabric of Western market-driven commerce. That could spark a damaging populist backlash, recreating the economic dark ages of heavy regulation and state diktat, crushing the entrepreneurial spirit that has long driven human progress.

more:
http://www.telegraph.co.uk/finance/comment/liamhalligan/4093698/Note-to-John-Humphrys-I-would-rather-be-miserable-than-wrong.html

[madrchsod]

6. he`ll never see that bill on his desk....

to many people have to much to lose if the act was restored

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8. You are

right. There are too many dynasties to ask to reform.

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4. Obama's 'Rubin constellation'

Obama's 'Rubin constellation'

By Ralph R. Reiland
Monday, December 29, 2008

Where's the "Change we can believe in"?

On both Wall Street and in Congress, the same old crooks and party hacks who succeeded in producing the greatest economic crisis since the Great Depression have now ended up with even more power and more control than they had before the election.

It's not unlike what happened after the collapse of the failed economy in the Soviet Union. The corrupt and inept communist bosses who were tossed out of power ended up back on top by stealing their way into ownership positions in the economy's newly privatized companies.

Similarly, delivering the exact opposite of "change," President-elect Barack Obama is putting some of the nation's most notorious foxes in charge of guarding the chicken coop by way of a proposed economic team that Jackie Calmes, The New York Times correspondent on national economic policy, calls "a virtual Rubin constellation."

Obama's "choices for his top economic advisers -- Timothy F. Geithner as Treasury secretary, Lawrence H. Summers as senior White House economics adviser and Peter R. Orszag as budget director -- are past proteges of (former Treasury Secretary Robert) Rubin," explains Calmes, formerly the chief political correspondent for The Wall Street Journal's Washington bureau.

Geithner, picked to succeed Treasury secretary Henry Paulson, was Rubin's undersecretary for international affairs at Treasury; Orszag was a dependable Rubin ally during his years at Treasury; and Summers served as deputy Treasury secretary under Rubin.

Rubin, who served in the Clinton administration and currently is a top economic adviser to President-elect Barack Obama, has pocketed tens of millions of dollars from now twice bailed-out Citigroup.

more:
http://www.pittsburghlive.com/x/pittsburghtrib/opinion/columnists/reiland/s_604650.html

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5. i`m not happy letting the grifters into our house

these guys should be facing charges.

change we can believe in ?....i guess we`ll wait and see.

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7. Safe picks

Just filling jobs with obvious people. Safe picks. Obama is either a safe guy trying to stay alive or he doesn't get it. First clue that he doesn't

get it was when he didn't want to drop the .18 cent gas tax. Maybe we needed 4 more years of Bush to get to the point where people were forced to

make the hard choices to save the country.

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9. The bailout

The 750,000,000,000 bailout could buy seven million five hundred thousand houses houses that cost a hundred thousan dollars. But noooo....

Trickle down that would make Reagan proud ..

[RC]

12. And what makes you think we aren't going to get 4 more years... of bu$h lite.

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10. These guys don't get it

for example : New York City Mayor Michael Bloomberg weighed in on the summer gas tax

holiday, arguing "the last thing we need to do is encourage people to drive." He praised

Assembly Speaker Sheldon Silver (first time since congestion pricing died a predictable death

in Albany) and Barack Obama for opposing "one of the dumbest ideas" he says he's ever heard.

The only people that would do any extra driving would be the poor people. They don't get it.

They will ride the backs of the poor to get want thy want.

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11. and more

Bloomberg said "came out against this idea of a summer break on gasoline taxes which would help Chavez and Kudafi and people like- other people like that. I don’t know why anybody would want to do it."