Top Leaderboard, Site wide
Truthdig: Drilling Beneath the Headlines
June 24, 2017 Disclaimer: Please read.

Statements and opinions expressed in articles are those of the authors, not Truthdig. Truthdig takes no responsibility for such statements or opinions.

Five GOP Senators Now Oppose the Health Care Bill as Written

What’s Next for the Bill Cosby Sex-Assault Case?

Truthdig Bazaar
Condemned to freedom

Condemned to freedom

William Pfaff

more items

Email this item Print this item

In Money-Changers We Trust

Posted on Dec 29, 2010
AP / Pablo Martinez Monsivais

President-elect Barack Obama, accompanied by budget director-designate Peter Orszag, smiles during a news conference on Nov. 25, 2008, in Chicago.

By Robert Scheer

Two years into the Obama presidency and the economic data is still looking grim. Don’t be fooled by the gyrations of the stock market, where optimism is mostly a reflection of the ability of financial corporations—thanks to massive government largesse—to survive the mess they created. The basics are dismal: Unemployment is unacceptably high, the December consumer confidence index is down and housing prices have fallen for four months in a row. The number of Americans living in poverty has never been higher, and a majority in a Washington Post poll said they were worried about making their next mortgage or rent payment. 

Square, Story page, 2nd paragraph, mobile
In a parallel universe lives Peter Orszag, President Barack Obama’s former budget director and key adviser, who even faster than his mentor, Robert Rubin, has passed through that revolving platinum door linking the White House with Wall Street. The goal is to use your government position to advance the interests of your future employer, and Orszag and Rubin’s actions in the government and then at Citigroup provide stunning examples of the synergy between big government and high finance.

As Bill Clinton’s treasury secretary, Rubin presided over the dismantling of Glass-Steagall, the New Deal legislation that would have prohibited the creation of the too-big-to-fail Citigroup. He was rewarded with a $15-million-a-year job at Citigroup, where he became a leader in the bank’s aggressive move into high-risk ventures. An SEC report in September claimed that Rubin as Citigroup chairman was aware that the bank failed to disclose $40 billion it held in subprime mortgages before the collapse. 

During those years at Citigroup, Rubin financed the Brookings Institution’s Hamilton Project, an economic policy program, and named Orszag, a Clinton economic adviser, as its director. The Hamilton Project continued to celebrate Rubin’s deregulation philosophy up to the point of utter embarrassment. Clearly, Orszag is not easily embarrassed, for upon taking his new job recently he boasted “I am pleased to be joining Citi, with its unmatched global platform and dedication to providing clients with service and advice.”

The most damning comment on this corrupt syndrome was offered by former Citigroup co-chief executive John Reed, who had worked with Rubin to get Glass-Steagall reversed and now is a sharp critic of the result. “We continue to listen to the same people whose errors in judgment were central to the problem,” Reed told Bloomberg News. “I’m astounded because we basically dropped the world’s biggest economy because of an error in bank management.” Reed estimated that the financial deregulation proposals contained in the Dodd-Frank bill and other reforms of the Obama administration represent only 25 percent of the change needed.


Square, Site wide, Desktop


Square, Site wide, Mobile
The failure to provide serious regulation of the financial industry to avoid future downturns is documented in devastating detail in that Dec. 28 Bloomberg report, written by Christine Harper: “The U.S. government, promising to make the system safer, buckled under many of the financial industry’s protests. Lawmakers spurned changes that would wall off deposit-taking banks from riskier trading. They declined to limit the size of lenders or ban any form of derivatives.”

The reason for that failure is obvious from the president’s choice of advisers featuring Rubin acolytes from the Clinton years. Harper writes: “While Obama vowed to change the system, he filled his economic team with people who helped create it,” referring to, among others, Timothy F. Geithner, who had gone from the Clinton Treasury Department to head the New York Fed, where he presided over the salvaging of Citigroup and AIG. As Obama’s treasury secretary he was quick to appoint a Goldman Sachs lobbyist as his chief of staff. Geithner’s subservience to Wall Street was reinforced by White House top economic adviser Lawrence Summers, Rubin’s deputy and then replacement in the Clinton administration who pushed through the repeal of Glass-Steagall and fought against the regulation of derivatives.

And with the decisive assistance from both a Republican and Democratic president, all has worked out just as planned for the banks. Harper reports: “The last two years have been the best ever for combined investment-banking and trading revenue at Bank of America Corp., JPMorgan Chase & Co., Citigroup, Goldman Sachs Group Inc., and Morgan Stanley, according to data compiled by Bloomberg.”

It’s all wonderfully bipartisan. Recently it was announced that Carlos Gutierrez, commerce secretary under George W. Bush, had been named to a high position at Citigroup. For President Obama, there’s no cause for worry about the loss of indispensable talent from his administration. Orszag’s replacement as head of the Office of Management and Budget, Jacob J. Lew, was both a member of Rubin’s Hamilton Project and a former Citigroup executive—thus ensuring that government of the banks, by the banks, for the banks shall not perish from the Earth.

Click here to check out Robert Scheer’s new book,
“The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.”

Keep up with Robert Scheer’s latest columns, interviews, tour dates and more at


New and Improved Comments

If you have trouble leaving a comment, review this help page. Still having problems? Let us know. If you find yourself moderated, take a moment to review our comment policy.

Join the conversation

Load Comments
David J. Cyr's avatar

By David J. Cyr, December 29, 2010 at 8:42 am Link to this comment

The “expertly” surprised Scheer reported:
“Harper reports: ‘The last two years have been the best ever for combined investment-banking and trading revenue at Bank of America Corp., JPMorgan Chase & Co., Citigroup, Goldman Sachs Group Inc., and Morgan Stanley, according to data compiled by Bloomberg.’”

3 of the top 6 “contributors” to Obama’s 2008 corporate installation were the financials firms Goldman Sachs, Citigroup, and JP Morgan Chase.

That was public information provided by the FEC and (more accessibly) by **BEFORE** 69,456,897 maniacs voted for Obama.

The “progressive” liberals keep surprising themselves with the negative consequences of their heroin addict like habitually voting for natural people to be governed by corporate “person” monsters.

Report this
Fat Freddy's avatar

By Fat Freddy, December 29, 2010 at 8:18 am Link to this comment


Proudhon was close, but his economics are not based in reality. The Labor Theory of Value has serious flaws, in both Adam Smith’s definition and Karl Marx’s definition. All you have to do is spend a little time on ebay, to understand “value” and “scarcity”. The buyer always sets the price. Any attempts at price fixing, results in shortages. LTV is a form of price fixing. If I perform a specific amount of labor on producing a product, and nobody wants to “buy”, or own the product, it has no value. The opposite is also true.

Mutualism seems to be some sort of “middle ground” between anarcho-communism and anarcho-capitalism, where some private ownership is “allowed”, and some is not. However, I recognize that “distribution” of land, and natural resources is not easy to justify, especially as the population increases, and resources decrease.

Report this

By Steven Podvoll, December 29, 2010 at 8:13 am Link to this comment
(Unregistered commenter)

Compare today with 2 or 3 years after October, 1929.  GDP was still shrinking and
unemployment was still accelerating towards 25%.  Now, two years after the crash
of ‘08, GDP has been slowly growing for 4 or 5 quarters, and unemployment has
stabilized.  Unfortunately, unemployment remains high, but with the
manufacturing, particularly the automotive sector coming back in a strong way, I
think it likely that we will see unemployment reduced within the next couple of

I understand that many people are still hurting, but let’s not lose perspective.

Report this

By FRTothus, December 29, 2010 at 7:00 am Link to this comment

“The economic idea of capitalism, the politics of
government or of authority, and the theological idea
of the Church are three identical ideas, linked in
various ways. To attack one of them is equivalent to
attacking all of them . . . What capital does to
labour, and the State to liberty, the Church does to
the spirit. This trinity of absolutism is as baneful
in practice as it is in philosophy. The most
effective means for oppressing the people would be
simultaneously to enslave its body, its will and its
(Pierre-Joseph Proudhon)

Report this

By Yo' Mamma, December 29, 2010 at 6:28 am Link to this comment
(Unregistered commenter)

A fundamental problem is the immediacy of the need for income on the part of noveau quantitative academics upon completion of doctoral studies.

The capable and the curious are snatched up from their departments by speculative firms of all types, offering salaries to graduate students who’ve been fed a steady diet of reasonable-but-frugal stipends their from scholarships and fellowships that immediately boost them into the wealthiest 5-10% income earners and relieving them of the trials of moderation and uncertainty of long-run employment that have gnawed at the minds of many would-be research faculty for untold years of their lives. As has been widely seen, only so many slots for tenure-track jobs open each year, the ones that do are fraught with publish-perish peril that dooms neophyte associate professors because of the sheer complexity of student-to-faculty transition phase, and where the acceptance of post-doctoral fellowships are often time just alternate ways of saying that low pay and employment uncertainty are still primary sources of fear and loathing after all the hard work to banish them- not to mention both a pernicious lack of academic notoriety in being unable to fully dedicate oneself to one’s own research objectives.

Whether they’re economists from University of Chicago, mathematicians from Harvard and Princeton, physicists from Caltech, computer scientists from Carnegie Mellon, engineers of any stripe from MIT or other types of high caliber formal problem-solvers from any of the “top gun” programs here or around the world, the simple truth is that each of these student’s conditional questions about the realities of day-to-day living are solved more quickly by those blackguard firms like Citigroup and Goldman Sachs who, bearing massive paychecks, promise fulfilling work possibilities in a geek-chic culture that esteems and rewards individual achievement, accompanied by the unnaturally-high presence of work colleagues bearing similar credentials and capacities…making work sound damn close to the prospects of just transferring from one university campus to another. 

No wonder these firms get the first-mover advantage to select the top-tier draft picks of the scientific elite as they move from the protected walls of the university and for the first time must “float” their value in a constrained, insular market with limited opportunity!

Report this

By ma77hew, December 29, 2010 at 6:27 am Link to this comment

“Two years into the Obama presidency and
the economic data is still looking grim.”

I think we need to stop speaking about in this universal “WE” and more about
how the top 1%( worldwide Ruling Class) is raping, pillaging the planet in the
greatest war against the common man and woman history has ever seen.

The unleashing of the recent destructive force by this criminally insane
plutocracy amounts a declaration of environmental, economic, war on the entire
present and future worldwide population in the name of inhumane greed and
unregulated power.  We must start speaking very clearly and very forcefully
against ever agent and guise that is hoisted in front of us declaring submission
to this reality they have created for us.

We must also come to grips that the future of liberty, human rights and
environmental wellbeing is not in the interest of the psychopathic ruling class.
It does not serve them and is a threat to them. PERIOD. Everything else that is
said is PR and meant to lull you back into a false reality while they continue to
obliterate all in the way of their profit.

Action is needed.
Speak up and loudly.
Do not avoid confrontation with their agents and their misinformation.
Work peacefully to show the common ground shared with the 99%
Tear down the labels of Democrats and Republicans that divide us and protect
and hide the Ruling class agenda.

The way forward is outside the system they have created for us.
Now is the time to once again “form a more perfect union”

Report this

Page 2 of 2 pages  <  1 2

Right Top, Site wide - Care2
Right Skyscraper, Site Wide
Right Internal Skyscraper, Site wide

Like Truthdig on Facebook