R. Scheer says that Obama didn’t have anything to do with the economic meltdown but that he wasted two years being misled by Summers and Geithner?

And “the buck doesn’t stop here”?

I’m not convinced Obama personally chose Giethner and Summers. I blame the DNC and their need to court the very wealthiest of campaign donors. In your book, you make it very clear that Obama had a fairly robust perspective on what caused the housing and financial markets to tank. But his position did change later on during the general election campaign phase and Geithner and Summers actually joined his campaign staff.

Tim Kaine’s tenure at the DNC has been just awful. Awful for Democrats and even worse for the American middle class (if there even exists such an animal anymore).

We already know they use the same operational guidelines. Beck is just the 3rd most listened to these days but they all start from the same places and talk about it about the same times if not exactly at the same time. Why not? They have most of the same reasons for being as do their millionaire and billionaire backers. Make a theocracy that is a friendly place for corporatists and war mongers.

I can’t wait to see who Obama picks to replace his economic advisers. The Summer is ending and now the Fall comes.

It was T.V. ANARCISSIE. (My opinion) There will be increased propagandist manipulation on the MSM picturing social and environmental progressives as dangerous “subversives” and “terrorists” that threaten American stability. It will send the message that such people are open game, encourage informers and unproved physical assault, present violation of their civil rights as necessary and picture their concerns as irrational.

      The MSM/fascist “machine” is already in place to do it and it’s one of the tried and proven tactics used by McCarthy in the 50’s, and a counter revolutionary tactic implemented against social progressives in the 60’s. (Who was it THE MOD SQUAD was infiltrating?).

      It has always been bad, but now openly exposed for the thugs they are, backs to the wall, they’re playing for keeps.

Where was this?

Last nights CSI:LV featured a trip to a dingy meeting hall, where a man standing in front of a huge American flag was speakiing to a crowd of like minded individuals, about the same issues folks at TRUTHDIG discuss: Wallstreet collusion, government corruption, high interest usery, economic collapse, outsourced jobs, etc.

  They were pictured as irrational losers and tied directly to terrorist bombings. The Police assault of the gathering was staged as a justified action and rules were openly bent to illegally hold them in custody.

  “Is it real, or is it Memorex?”

Tourists—especially those from Japan, where guns are banned to all but the police—think it’s a revolution. But shooting is the national sport, and the backbone of the national defense as well. More per capita firepower exists in Switzerland than in any other place in the world, yet it is one of the safest places to be.

From 1776-1789 we could have been a giant Switzerland but we lost it when we had a velvet revolution that made us a Federal Republic. Too bad they didn’t stick to the original plan to simply revise the Articles of Confederation to make it more operational. (Basis of one of my stories.)

Madison attempted to slow down, to hobble the rapacious Federalists from eventually taking over and imposing their top down secular control—-a type of royalty upon the masses. It worked for a time but over time the protective locks have been broken or successfully ignored. That includes the corporation and fundamentalists Christians breaking down and infesting our gov’t. We see it all the time.

Warning! Beck has discovered Edward Bernaise and is now perverting that part of history to blame the Progressives not the Oligarchs for what we have now.
Summers is just another example as is Obama.

Re: By Hammond Eggs, September 24 at 4:08 am

“Obama had absolutely nothing to do with the causes of the financial meltdown, but he wasted two precious years being misled by Summers and Geithner as to how to respond to it.:

This sentence epitomizes why it is nearly impossible to read Robert Scheer any longer.  Obama was not “misled”.  Obama and Summers are blood brothers.  They are both totally corrupt.  Summers’ replacement will be just as bad and possibly even worse.  Why is it that Scheer has this deep seated need to continually apologize for Obama?  Why can’t he call Obama the miserable wretch that he truly is
—————————————————————————-

Hammond Eggs,

I agree with you 100%.

@ Hammond Eggs, September 24 at 4:08 am

The problem with Obama was that he COULD have done something
constructive, but he didn’t. He could have chosen to have Fireside Chats, as
Roosevelt had done, where he COULD have informed the American public as to
WHY we were REALLY in this mess and that it was CONGRESS, the SENATE, and
prior administrations’ caving in to outside pressure that had brought us to this
brink of disaster we are currently in.

He COULD have continued to hammer the need for legislative reform and that
it was OUR DUTY to jump on our legislators to make that happen. And he
COULD have been hammering the American public about the beauty of the
Constitution and the need to understand it, including the importance of the
Second Amendment. But, NO.

Instead, he pulls the typically limp-dicked presidential number and tries to
make us believe that taking the guns away will somehow solve crime. Let’s
forget for a moment that crime is higher in areas with tighter gun controls,
why is it that not one of these anti-Second Amendment weenies ever
addresses the fact that the people who are causing the crime are the ones that
have become disenfranchised from the society they live in? No, no one wants to
address that because understanding that issue would empower the population
and would expose the larger game plan.

Patrick Henry stated in Antifederalist 3, “Where the government is lodged in the body of the people, as in Switzerland, they can never be corrupted; .....”
Well, what does Switzerland have that we don’t? It has a small enough area so that people at one end of the country are, out of economic necessity, more philosophically aligned with those at the other, and I believe this realization was why state sovereignty was so strongly emphasized. It also requires every male be issued an assault rifle for militia service. THAT was what our founding fathers saw when they referred to a ‘militia’.

Check this out:  http://www.theblessingsofliberty.com/articles/article11.html

“Obama had absolutely nothing to do with the causes of the financial meltdown, but he wasted two precious years being misled by Summers and Geithner as to how to respond to it.:

This sentence epitomizes why it is nearly impossible to read Robert Scheer any longer.  Obama was not “misled”.  Obama and Summers are blood brothers.  They are both totally corrupt.  Summers’ replacement will be just as bad and possibly even worse.  Why is it that Scheer has this deep seated need to continually apologize for Obama?  Why can’t he call Obama the miserable wretch that he truly is?

1) He’s changed.  He’s a completely new man.  Full of political courage.  Now, he’s a man of heroic action, not just heroic (and easy) words.

2) Or, he’s throwing the Progressives a bone, hoping that they’ll believe that there will be a ton more bones where that one came from.

Given the fact that Obama has proved to be a good friend and tool of the oligarchs, if not their outright creation, I’m going with the second option.

I suggest people “not be fooled again.”

Skinny Felicity,

Of course, Goldman Sachs engaged in fraud. They also engage in quote stuffing and front running. It was also shown that JP Morgan manipulates the silver market, thanks to the position they inherited when they absorbed Bear Stearns.

Everybody knows it, but nobody says, or does anything about. So, how can more, or new regulations help, when the government is looking the other way on existing regs?

Another point that needs to be made. The new Consumer Financial Protection Agency (CFPA) thing that is going to be headed by Elizabeth Warren, is supposed to be an “independent agency” housed under the Federal Reserve. Well, the Federal Reserve is owned by the banks (sort of), and there is no transparency with of the Federal Reserve. How can anyone expect an agency to protect the interests of the public, when that agency is under an institution that is controlled by the banks? Don’t forget, Jamie Dimon sits on the Board of the Federal Reserve Bank of New York (FRBNY) while he is simultaneously CEO of the largest bank in the country, JP Morgan.

The fact of the matter is, that the Federal Reserve already has authority power over mortgage writers under the Home Owner’s Equity Protection Act (HOEPA), but they refused to use this authority during the boom. What good are new laws and new regulations, and new agencies, and new regulators, if none of the regulations are going to be enforced, and none of the Federal Agencies are held accountable? Unfortunately, the CFPA is nothing more than “feel good” legislation that will only provide a false sense of security to consumers. It’s sad, very sad.

All this Republican Hurray About Free Enterprise is Whooey.

The Taxpayer Bailed Out Free Enterprise.

Free Enterprise’s Debt was Transferred to Public Debt.

It’s that plain and simple.
And
Obama was the enabler.

It’s that plain and simple.

This paragraph in Scheer’s article irked me:

“Obama had absolutely nothing to do with the causes of the financial meltdown, but he wasted two precious years being misled by Summers and Geithner as to how to respond to it. The key error, and it is not too late to rectify it, was the failure to force the bailed-out Wall Street titans to give back something significant to the public in the way of mortgage relief. A temporary moratorium on mortgage foreclosures at a time when 11 million homeowners are “underwater,” at risk of joining the almost 4 million who have already lost their homes, is a must to recharge the economy. That is what Obama should have initiated when he first came into office, and I hope it will be done now that the dead hand of Summers has been lifted.”

I don’t know if Scheer is employing some kind of strategy toward Obama by claiming he is being deluded by Summers and Geithner or if Scheer himself is deluded about Obama. When the crisis first hit, it was said to be due to all the mortgages that were under water. If that were true, they’d have supported all the people whose mortgages were in trouble—and for far less money than what they ended up spending. If those people could pay their mortgages, then theoretically, the banks would then not be in trouble. But there was another problem, not as serious for the country, but much more serious for the “Wall Street titans”—namely the derivatives. So that was what they addressed—all the derivatives that were under water, and that’s what they made whole—or rather, tried to stop the bleeding of.

In Obama’s inaugural address, he said:

“Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age.”

The latter was what he emphasized. He blamed the victims, all the people who were misled into these subprime liar’s loans by professionals who knew what they were doing, and who then involved themselves in all these wild derivatives speculations. THAT is what they made whole, or at least kept in business and wealthy. If they had let them fail, you’d have had a lot of rich guys bankrupt and the general population at least still in their homes and with a fighting chance. Where businesses failed new ones would have sprung up. Obama was not so innocent of what he was doing by bailing out the speculators and con artists and cutting loose the general population—whom he blamed for a “collective failure to make hard choices.” He knew what he was doing when he made all those campaign promises, EVERY ONE of which he went back on—except for one: escalating Afghanistan.

Well if I am not mistaken yesterday was the first day of Fall?

When you take individual presidencies and look at how nothing constructive
ever seems to take place, then it just seems like Washington is some massive
cluster-fuck filled with used car salesmen and ne’er-do-wells.

But follow the path of the Bilderburgs since their inception in the early ‘50s,
who they were waiting to get out of prison, the seemingly magnanimous
contribution by Rockefeller of the land onto which the UN was built, and
particularly the cancerous growth of COG, REX84a, FEMA, and DHS over at least
eight presidencies and one comes to the gut-wrenching conclusion that this
was by no accident.

Just as the the European banking parties had had been chomping at the bit for
100 years to get their tentacles into those ripe new colonies, we are now
coming up on almost another 100 years since the adoption of the Federal
Reserve. The events through which we became engaged in every war, including
the Civil War, are now proving to have been influenced by these same banks. If
it wasn’t the Rockefellers or the Carnegies on this side of the pond, it was the
Rothschilds and the British Crown on the other.

The sickening stream of staged False Flag events and supposed defense
“blunders”, from the Maine, the Lusitania, Pearl Harbor, the Pueblo, Gulf of
Tonkin, Gulf War, Bosnia, Iraq War, Georgia/South Ossetia, Afghanistan ......
and at each juncture the world’s population continues to scratch its head as to
why the pattern never changes.

It doesn’t change when our decision makers all along the way are forced to
comply with a plan that was set forth at least two hundred years ago. JFK
decided to buck the system and every president since that time seems to have
“allowed” this plan to further reveal itself. What we don’t find is any president
who has actually been able to re-secure the peoples’ relationship with their
Constitution and who has tried to reverse the trend; lest they wind up like JFK.

Great comments,insights and suggestions. Still, the core reality seems to remain. Clinton and Rubin let the fox into the hen house, and the Bush thugs looked the other way while it savaged the chickens. Huge $$$$$ was stolen, huge money changed hands, lives were destroyed, the perps walked free, and (as awlays) bleak consequence and financial responsibility for the mess fell to “We the people—”. The point of my post is, this time the crooks seem to have no intention of quitting despite National, social, environmental and financial collapse staring us directly in the face. Why?

    Goodman had an economist on yesterday (GERARD) who noted that while other Nations are Developed or Developing, the World has recognized that America has fallen into a new third. Non-Developing.

    He confirmed my opinion (as GERARD pointed out) that the only way to comprehend the continued inhuman destructive actions the perps undertake is to accept that they are criminally insane. Likewise, he spoke of scientific experts who think the GCC clock could place humanity as close as three decades from extinction.

    Though posters on this thread offer solution and obviously feel some human moral center exists in D.C. that might implement vision and recovery for our great Nation, I continue to believe “benefit of the doubt” is a mistake when dealing with lunatics. They’re political megalomaniacal narcissistic psychopathic paranoid and dangerous. Emotional kneejerk comments about Summers or continued anxious hand wringing about the causes of the manufactured lie that is destroying us is classic denial. Stop being a victim. Choose survival.

    I’M SORRY to keep beating the same drum but the Washinton madhouse has become irrelevant to the American reality. Accept it and live. They’re batshit nuts!! Any positive change that comes will come from us. The cavalry ain’t comin’.

Fat Freddy (from Skinny Felicity) - shorting, as
practiced by Goldman at least, is just selling at the
high and buying back at the low.  Goldman touted
certain securities (which they knew were worthless)
to their clients.  Unsuspecting investors bought them
by the droves (they were AA rated, so much for
‘independent’ regulatory agencies.)  Naturally their
values increased.  When these values were
sufficiently high, Goldman traders sold (which was
their intention all along.) 

In my book, what Goldman did was commit fraud in that
they knowingly misrepresented the products they were
selling.  Apparently, however, in today’s America
only the ‘little’ people will be taken to court for
committing fraud?

During the FDR Administration the Banking Industry was regulated. We had no national bank failures until Ronald Reagan and his bunch went on a deregulation crusade. Tax payers bailed out the Savings & Loans in the 1980s. Tax payers bailed out the banks yet again at the end of the Bush regime. And I’ll lay a $100 in Truthdig bucks on the table we’ll be bailing “too big to fail” banks out yet again. In this deregulated loop, where risks are socialized and profits privatized, banks have zero motivation to behave responsibly. You can lay all the fancy language you want on top of it but the cut and the dried of it is: the banking industry needs to be regulated. It is one of the cornerstones of a stable economy.

I think that now the choice of Summers replacement is what will inform us most of all about the orientation of the next two years economic policy.
If he continues in the same vain as Summers the jury will have no excuse to continue to deliberate.
The “governing under the influence” rhetoric will sink and Obama will have to stand up and back his espousal of right-wing economics on his own.

Failing up, is a term which seems a bit strange, but is an apt description for the opportunists in Politics and the corporations who grease their feet.

MeHere, Obama was not misled by these guys. He came riding into DC as the
great bi-partisan compromiser, determined t shaw a new DC where we can all get
along. These Wall St people were picked by him to show Wall St that he would
work with them, expecting them in turn to work with him. He wanted to put the
past behind us all but really what he did was allow a huge cover-up of Wall St’s
errors. Very naive, since Wall St, represented by Geither and Summers, snookered
him at every turn.

Does anyone else find it weird that Summers is going to teach and work on job
creation? I suppose he will say give lots of money to Wall Street and that will
enable businesses to grow and jobs to be created. Hah! That might have been true
of the old Wall Street (supplying capital to businesses) but not the trading-
dominated Wall St we now have.

R. Scheer says that Obama didn’t have anything to do with the economic meltdown but that he wasted two years being misled by Summers and Geithner. Didn’t Obama know anything about these two well-known guys?  Isn’t two years a long time to be misled?

Could there be any connection between Summers’ leaving and Elizabeth Warren’s
appointment?

Could Summers have said, either she goes or I go?

After your ‘Summers Sendoff’, I await breathlessly your ‘Rubin Redux’, ‘Black Jack(Lew)‘s New Chance to Mug the People’, ‘Alan’s Artful Artifices’ and any other kissoffs to the frontmen of the great heist.

felicity,

Part of Glass is still in place. Companies like Wal-Mart can not open banks. Gramm-Leach-Bliley, as I understand it, repealed the part of Glass that said bank holding companies could not operate investment banks. The main problem with this, is it created a huge conflict of interest. It also gave banks a huge advantage over smaller investment-only firms.

Let’s say a bank loans money to investor A to buy asset X. Asset X starts to decline, and the bank begins to get worried that maybe investor A will default. Along comes investor B to the bank, who has his own money, and wants to invest it. The bank, can “recommend” that investor B buy asset X, which will in turn, cause the price of asset X to rise, maybe. Or, the bank could short asset X, on its own, or with someone else’s money, in order to hedge its losses of investor A’s default. That would drive down the price of asset X. It’s a shell game, or three-card Monty. I’m not an investor, so I don’t know all of the intricacies of shorting. What I do know, is GLB allows banks to operate both sides; lending and investing.
Huge conflict of interest.

Fay Freddy has it right. The banks are really insolvent, yet they make annual
profits in order to extract billions in yearly bonuses without fixing their insolvency
problem. Why? because the government eats their risks and pumps them money.
It’s that simple

CitizenWhy

I think, in 5 years we will be able to see exactly who the Fed loaned money to and what they did during the crisis, but that is all. That was part of a compromise in the Paul/Grayson “Audit the Fed Amendment” to the Financial Reform Bill. That was that whole Bernie Sanders thing in the Senate. He had the votes to pass the original Amendment, but at the last minute he changed his mind, and offered the watered down version. To this day, nobody knows why Sanders did this, but it was the day after the “Flash Crash”. The “Flash crash happened on the day Sanders, and a few other Senators, had a closed meeting with Bernanke and Geithner. Coincidence?

Lafayette,

The risk of a banking systemic failure, which would have resulted in national unemployment rates of 20, or 30% was the far, far greater risk to the nation.

You keep believing that and the bankers will keep ripping us off. You bought that hook, line and sinker. The problem is, you idiots got the shit scared out of you after the run on Lehman. Tell me, who wrote that comment for you? Hank Paulson or Tim Geithner? Maybe it was Bennie and the Feds Bernanke.

3)  What assets for sale? Who would buy busted banks with SIVs that had defaulted? This is nonsensical.

Really? Who bought Wachovia? Who bought WaMu? The problem was that the failed banks were bought outright, with the full blessing of the FDIC. The assets should have been split up and auctioned off, with the proceeds going to payoff the liabilities. I’m sorry if people would have temporarily lost their grocery money.

Most of the TARP money went to reimbursing banks that bought the Toxic Waste, which is still on the books of the debt originators. The means to break apart the SIVs to find the individual properties is a long and exhausting piece of work. It takes years to accomplish the task completely.

God forbid someone should actually have to do some work. The banks that got TARP were insolvent or pumped up to have the extra cash on hand to buy the smaller banks that weren’t too big to fail. See: BB&T.

In each of the past crises similar to ours, the country in question (Japan and Sweden) put the defaulted mortgages into a Bad Bank that waited for the properties to regain retail value before selling them off and recuperating, actually, most of the original value of the property. It takes, however, between 5 to 7 to 10 years.

So, how did that work out for Japan?

I’m sick of all the Neo-Keynesian crap. It’s just more “pump and dump”, and “extend and pretend”. You want a “bad bank”? Look up Maiden I, II and III. Do you really think that money will be paid back? The reason the banks are even repaying TARP, is because the the Fed’s ZIRP policy. They are borrowing from the Fed at 0%, and buying long term Treasuries at 3-4%.

Needless to say, the American Treasury can use the money … 

Bullshit. The Treasury can go to the Fed and dump 5 and 10 year Treasuries on them. The Fed is the largest single purchaser of Treasuries to date. It’s called “quantitative easing”. There’s QE I and QE II, and it still isn’t enough. We’ve had bailouts, emergency 13(3) loans from the Fed, a hole shitload of alphabet soup liquidity programs from the Fed, Treasury and FDIC, including TLGP, bad banks, and suspension of accounting rules FASB (157, 166, and 167), and we still have all of the problems we did 2 years ago. Don’t give me 5 to 7 to 10. Which is it? If we keep this up, in 5 years we will be Weimar Germany, Argentina or Zimbabwe. Nah, that could never happen, right? Our economy is far too strong. We are the largest economy in the World. Well, we are also the largest debtor nation in the World.

The toxic assets are still there. The defaulted mortgages are still there. Fannie and Freddie will continue to try to keep the housing market from falling to where it should be. The problem is, the banks don’t want to sell the toxic assets at the prices the buyers are willing to pay. Too fucking bad. Either sell them, or write them down. Stop fucking playing games. You are insolvent, just admit it, and you are perpetrating fraud in order to cover it up. Anyone who enables this behavior, is just as guilty.

Yeah, sure, Bernanke, Paulson, Geithner and Dimon “saved” the financial system, but they did it such a way, that it will continue to linger like a bad tooth for possibly decades. If we would have just allowed the bad banks to fail, and flushed out all of the bad investments, it would have been extremely painful, yes, I am not denying that, but we would be on the road to real recovery, now.

A couple days ago Amy Goodman, while in Bonn, interviewed a Chilean economist (formerly from Berkeley) named Manfred Maxneef who received a Right Living Award at the recent conference from which she was reporting.
  Get hold of his books “Outside Looking In” and “Economics Unmasked”—the latter coming out soon. They are about economics as if people mattered (my over-simplified description.
  He spoke in tones of absolute outrage at the behavior of the managers of world corporate capitalism.  When asked what to do, he frankly said he has no answers. He is having difficulty understanding how such dangerous self-serving ignorance can prevail in a previously great country like the US.
  He indicates that the greed of the top 2% is a virulent psychological disease—not just a crime.  This would lead people to assume that there is no “way out” except to change the entire moral/ethical structure of the people who drive the current money-making craze. Their murderous willingness to kill is evidence of a spiritual malaise that hates life itself.
  (In short, and to be fair, to some degree at least, they are us—you and me—gone wild, and to dodge that fact is an indication of the depth of the sickness. IMO)
  I guess we learn what to do by “hitting bottom” and painfully climbing up, paying for our negligence in having let things go so far out of kilter for so long. Short of miracles, it will be a rough ride.
  But it is encouraging to listen to a man of moral stature after listening to the lies of politicians.

“Perhaps at Harvard Summers will have time to reflect on the
dismal arc of his split tenure in government service.”

Umm, not likely, but you are kind to suggest it, lol

Harvard, the Obama administration, the MSM the whole lot are good for nothing crooks . If Summers represents the quality of the Harvard elite bring back the WASPS, at least they had a sense of propriety.
Oliver Stone had it right when he said they f—-ed up this country..

TARP, or some way to keep the banks from failing, was needed. But it should
have dictated conditions to the 6 largest banks, the ones that made multi-
billions on the bailout, and it didn’t. This cannot be blamed on Summers, since
it was done under Paulson during the Bush administration. And Goldman
Sachs, which was not in the business of making business loans, should not
have been given access to direct money from the Federal Reserve, money it
used to engage in the same reckless trading that brought on the crisis, and to
buy foreign bonds, taking the money out of the US economy. The idea that the
federal money would be used for business loans was cynical fiction from the
start, an excuse to appease the US public.

There has never been an accounting of how taxpayer and Federal reserve
money (he bailout) was used by the 6 largest banks, because the original
bailout bill did not require such accountability. The use of the money has been
kept secret from the American people because it would be truly shocking to
see how the taxpayer was bilked. Larry Summers made sure that no
accountability would ever be made public. He was Wall St’s man even more
than Tim Geithner, who knew well that Wall Street was guilty and wanted
reform. Summers, in his arrogant elitism, diid not believe that Wall St was
guilty, or, if it were, believed it should not be held accountable.

ocjim:

And that mediocrity is valued highly, especially in Gringolandia.

Mr. Summers proves that white collar crime does pay.

Lafayette:  Good post; a little reading of books like “Too Big to Fail”, “The Big
Short”, and “The Sellout”, went over similar ground. The book “Lords of Finance”
which covered the role of banks during the Great Depression, illustrate how the
systemic risk of a bank failure can create world wide panic. The failure of one bank
in New York City was one of the root causes of the Great Depression, because it
was allowed to fail. It was allowed to fail because it was owned by Jews and of
course there was massive anti-semitism in those days. Bernanke and Paulson
knew what was going on and they took the right steps. They weren’t about to take
the risk that they would go down in history as the perpetrators of the “Second
Great Depression”. Ironic that Obama is being blamed for TARP when that was a
Republican plan pushed by Bush and Paulson, but got bipartisan support.

Good riddance to a bad apple as they say. Summers will go down in history as a
black mark on the Obama presidency. Too bad. We needed fresh thinking and got
stale Wall Street rhetoric and disastrous missteps that gave Republican’s a wedge
to push their reactionary viewpoints that would have been our economy even
worse. Years from now people was ask “What was Obama thinking?’

What is Robert Scheer ever gonna do without Larry Summers to kick around anymore?!! Just think of all the “umpteenth” columns he’s provided. Fortunately, it all paid off though, as Bob’s bro’ Obama finally heeded his priceless advice.  Maybe Scheer can move back East now and trail the sepentine Summers around the Yard, rehashing all his academic doo-doo! And “Maybe now Barack Obama, who hopefully will also push out Summers’ protégé, Treasury Secretary Timothy Geithner, will begin to provide an authentic populist alternative to those tea party Republicans who totally absolve Wall Street of responsibility for the economic collapse”…and maybe Harvard will turn into a socialist commune of authentic populist insurrection, too.
  “Ever one to fail upwards, Summers was rewarded for his betrayal of the public trust with an appointment as president of Harvard”…gee, what a coincidence. As Scheer railed in his column last week, “for the umpteenth time urging Summers’ dismissal”, we expected he would still have kind words for the president who hired Summers. But Scheer’s effusive castigation of Summers “suggests that he is still in denial over the role of key Democrats like” … Obama in getting “us” into this mess.
  “Nor was the fact that Summers received almost $8 million in consulting and lecture fees from Wall Street firms during the time he advised the Democratic candidate a deal-breaker for Obama”...just the opposite really, since Obama himself received tens of millions in campaign cash from Wall St. sources, including Goldman Sachs – and also close to a million from Harvard University sources. More of a deal-maker, actually.
  Obama wants “absolutely nothing to do with” pursuing “the causes of the financial meltdown”, and its perpetrators. Instead he bought them “two precious years” of stalling and now is blaming it all on “being misled by Summers and Geithner as to how to respond to it”...in order to enable their “Great American Stickup” and clean getaway. “Perhaps at Harvard Summers will have time to”…count his loot and gloat at how easy it all was (and still is).
  “The key error, and it is not too late to rectify it, was the failure to force”…Obama to give back all those campaign contributions to “the bailed-out Wall Street titans.” Otherwise, no matter which new Shylock squats in the Oval Office to “advise” him we will have to go on listening to him dissemble similarly about how: “’I will always be grateful that at a time of great peril for our country, a man of Larry’s brilliance, experience and judgment was willing to answer the call and lead our economic team.’” “A parsing of that one sentence will reveal much of what is rotten in our political system”…and his name is Barack Obama.

Back to Harvard to help pervert a group of elite children that they are “the
brightest and the best” intellectually, morally, spiritually, physically, and therefore
deserve to rob from the poor to give to the rich.

What are the options? The white house press said someone from business would be
selected to. Replace Summers. That will be a mistake.

Lafayette: you don’t understand because you clearly don’t want to.  The main argument is about *transfer of wealth*, which was clothed as “crisis management”, the end result being that a) people and institutions that caused the crisis and had decision power during its handling, gained wealth and b) people who did not cause the crisis but were just working, and had no decision power during its handling, lost wealth.  In the future, the people/institutions who are responsible for this are going to have even more power over how your country operates.

This is not a technical issue, it’s a very large and long term political issue.  So yeah, whatever.

With any luck he can finish pillaging Harvard’s foundation and save us from future generations of the “best and brightest”.

Summers is bogus and unsound. He is a prime example of leverage—- that is leverage of nepotism and the Peter Principle.

When holding unsound money you move it along—same with unsound experts!

White House Chief of Staff Rahm Emanuel,  Fed Head Bernanke, and Summers.  All of which should have never been appointed.

Fat Freddy - speaking of ‘hidden assets and
liabilities’ Bernanke made the alarming statement two
years ago that “...transparency (referring to the
Street) would be counter-productive…”  A year later
he said that a return to Glass would not NECESSARILY
lead to stability. What can be read from these
statements other than at least Bernanke is where he
is to protect the Street and obviously to perpetuate
its criminal dealings.

Summers, Geithner, Bernanke - were assigned and
readily accepted the task of protecting the Street
perpetrators of this giant fraud on the American
people.  Example of protection:  Remembering the
Savings and Loan debacle of a few years back,
Silverado Savings cost the tax payer $1 billion while
it cost Neil Bush, the guy who ran the Silverado show
a mere $50,000.  Protection on steroids.

{FF: The key error was bailing out the banks in the first place. Here’s how it should have gone:
1) Allow insolvent institutions to fail, period.
2) Use the FDIC to reimburse depositor losses, possibly even raising the limit.
3) Allow the failed institutions to go into bankruptcy court, where their assets could be sold at “fire sale” prices.
4) Provide temporary tax credits and liquidity to the “new owners” of the toxic and non-toxic assets, so they could use the money that was “saved” on the purchase price of the assets to write down the principle of underwater mortgages.}

This is sort or puerile nonsense of which blogs are replete. It demonstrates a weak understanding of the crisis that was provoked.

Taking the above item by item:
1)  Given the generalized usage of the Structured Investment Vehicles (SIVs are mortgage backed debt investments) on the books of all the major banks, the default was “systemic”. Meaning that there would be bank closure with the resulting public panic.
2)  It would have taken six months to a year for the Banking System to report depositor holdings along with congressional legislation to authorize the both the extra-budget payments and the increase in FDIC coverage. In the meantime, the account holders do what to pay for the groceries, the rent, and the electricity?
3)  What assets for sale? Who would buy busted banks with SIVs that had defaulted? This is nonsensical.
4)    See “2” above. This tactic would have been stonewalled by Congress.

In each of the past crises similar to ours, the country in question (Japan and Sweden) put the defaulted mortgages into a Bad Bank that waited for the properties to regain retail value before selling them off and recuperating, actually, most of the original value of the property. It takes, however, between 5 to 7 to 10 years.

Most of the TARP money went to reimbursing banks that bought the Toxic Waste, which is still on the books of the debt originators. The means to break apart the SIVs to find the individual properties is a long and exhausting piece of work. It takes years to accomplish the task completely. (In fact, not all the TARP money was necessary.)

Besides, the banks are going to be paying back the TARP subsidies this year and the Federal Government will make a handsome profit in the repayment. Needless to say, the American Treasury can use the money …

And finally, the mortgage market was estimated at $12 trillion with approximately 6.41% of loans delinquent and 2.75% of loans in foreclosure as of August 2008, at the height of the crisis. As of today, the national foreclosure rate average is less than 2% of all households.

The foreclosures certainly afflicts pain upon a great many American families, but given the entire nation of households (117 million), the crisis was proportionately minor.  Was this sufficient reason to do deathly somersaults for those who were most afflicted? Or to punish those who were responsible by closing the major banks and setting off a real economic crisis of epic proportions?

I suggest that what was done was in measure of the importance of the situation as regards foreclosed housing.

The risk of a banking systemic failure, which would have resulted in national unemployment rates of 20, or 30% was the far, far greater risk to the nation. That the systemic risk of failure was contained and unemployment remains below 10% indicates that the situation was handled with proper alacrity.

Sorry, but I see little reason whatsoever to blame this administration (and particularly the Treasury) for “mishandling” the situation.

But, of course, some people will never be satisfied, so the complaining continues.

Robert Scheer is just congenitally incapable of seeing just what a snake-in-a-suit* Obama really is. Just like Summers and all the others are too.

Effusive praise indeed if Summers had done his (secret) job right and he did. What he did for us openly was “abysmal” but that is why he was hired, why he is paid the millions of dollars by Wall Street. Don’t you get it? Our system is corrupted by those who mean us harm. Our Republic is in danger for a reason. This is some of how it is done. No one is killed, threatened or harmed in any way physically—-but the economy is damaged and we are threatened with collapse. One that is still looming large as black storm clouds on the horizon. Ones that have never left that horizon since 2001.

I predict that bowing to Conservative pro-business pressure, Obama will appoint the same kind of person to fill the position. Not a responsible person who knows that part of the problem is structural as well as regulatory. That and stop bailing out the cause of the problems.

If you’re too big to fail then you will be broken up. All those derivatives ans such monstrosities they created to siphon off money that doesn’t even exist must be reduced first to their real price then paid for. Trillions will disappear back into the fantasy realm they came from. ($130 trillion doesn’t exist in the entire world!)

* I like adding shark skin to that analogy.

Summers: Wall St’s man, pro-rich, anti-middle class. simple as that.

Thanks (as always on financial threads) for the links and “other than kneejerk” opinion. My own insight into finance is limited and I appreciate attempts at clarity and direction to source materials.

    Keep it ROCKIN’!!

Dumping Summers, appointing Warren - if this isn’t a true change of course it will
confirm the death grip stranglehold corporate America has on the democracy.
Then there truly is no hope.

Anarcissie,

The problem with deregulation, as I see it is, you can’t simply eliminate regulations in our current system. Deregulation should be the effect, not the cause. By raising reserve requirements, having a more market based interest rate, and switching to a more stable currency, most of the regulations currently on the books would simply disappear. They wouldn’t be necessary because of the natural restraints placed on banks by the higher reserve requirements, etc. And, by eliminating, or at least auditing, the Federal Reserve, banks would be forced to operate with a real fear of bankruptcy. The current relationship between the banks and the government is like feeding a lion with one hand, while whipping him with the other. If you don’t feed the lion, you won’t need to whip him.

The entire crisis was multiplied several times over because most of the toxic assets were leveraged through he roof. I believe at the height of the crisis JPM was leveraged at about 60:1, and if you include the off-balance-sheet transactions, it was closer to 100:1. Off-balance-sheet transactions are an important tool for accountants, from what I understand, but these banks, and some non-banks, pushed their limit far beyond any useful means to the point of being fraudulent.

I was watching the testimony of Dick Fuld back in April, and he said, “if there was a problem, the SEC would have said something”. Well, the SEC can’t say anything if the assets and liabilities are hidden in off-balance-sheet transactions.

Here, it’s long, but if you start at about 1:30:00, you’ll see the best part.

http://www.c-span.org/Watch/Media/2010/04/20/HP/A/32013/House+Finacial+Services+Cmte+Hearing+on+Lehman+Bros+Report.aspx

Fat Freddy—while I agree with you that the major cause of the present crisis was the artificially low credit rates of the last ten years or so, I think deregulation was part of the same general trend and was implemented in the same spirit.  The bankers and brokers don’t want to be regulated, but they want the taxpayers to pay for their unregulated mistakes, which are enormously magnified by the consciousness that those bailouts will indeed take place.

The key error, and it is not too late to rectify it, was the failure to force the bailed-out Wall Street titans to give back something significant to the public in the way of mortgage relief. A temporary moratorium on mortgage foreclosures at a time when 11 million homeowners are “underwater,” at risk of joining the almost 4 million who have already lost their homes, is a must to recharge the economy.

Wrong. The key error was bailing out the banks in the first place. Here’s how it should have gone:

1) Allow insolvent institutions to fail, period.

2) Use the FDIC to reimburse depositor losses, possibly even raising the limit.

3) Allow the failed institutions to go into bankruptcy court, where their assets could be sold at “fire sale” prices.

4) Provide temporary tax credits and liquidity to the “new owners” of the toxic and non-toxic assets, so they could use the money that was “saved” on the purchase price of the assets to write down the principle of underwater mortgages.

This would have been a bit Draconian to shareholders, but it would have saved the taxpayer billions, if not trillions, and allowed many homeowners to stay in their homes. It would also have flushed out all of the bad investments, allowing the economy to recover, sooner.

Gimmie a break.  The Democrats are only now getting rid of Summers because they are just starting to wake up to the fact that they are going to get their assess kicked in November and that the so called left is extremely disenchanted with Obama and the Democrats (who might as well be Republicans).  This move is a desperate attempt to lure back those foolish enough (Scheer in this case) to have bought into Obama’s progressive message in the first place.  If someone like Scheer is actually reconsidering and/or encouraging others to reconsider through articles like this to give Obama and his crowd of Democratic stooges another shot, then where does that leave the average voter who is not nearly as politically literate as presumably Scheer is?

I think you would be hard pressed to find anyone that doesn’t feel that Gramm-Leach-Bliley, and unregulated derivatives trading didn’t play a part in the crisis. However, it is very naive to believe that this was the sole contributor, as Mr Scheer would like us to believe. The primary cause lies with Alan Greenspan and the monetary policies of at least, the past 10-12 years. With all of the cheap, easy money that was available to the banks from the Federal Reserve, even if there was derivatives regulation, that money would have found someplace to create a bubble.

Make no mistake, this is not over. Nobody, not banks, businesses nor individuals have done any real deleveraging in the past two years. All of the debt is still there in both the public and private sector.

If you look at this chart from the Federal Reserve you will see that the amount of debt liability has not decreased in any meaningful way in the private sector, and in some cases it has actually increased.

http://www.federalreserve.gov/releases/z1/current/accessible/l1.htm

The problem, as both William K. Black and Nouriel Roubini point out, is that this is not a crisis of liquidity. Liquidity is a symptom of the underlying problem of insolvency. Banks are insolvent, yet we continue to bail them out, and grant them special accounting rule exemptions. The same exemptions that got Enron in trouble. You do your readers a great disservice, Mr Scheer, by trying to blame this all on “deregulation”. You sir, are part of the problem.

Since there seems to be some delusion about Summers’ special qualities, I must once again recommend reading the following:
http://janinewedel.info/harvardinvestigative_InstInvestorMag.pdf

For a short overview, read:
http://laurencejarvikonline.blogspot.com/2006/01/how-harvard-lost-russia.html

Summers is not the main protagonist of the crimes and errors perpetrated in Russia by the team sent by Harvard to teach them a thing or two about capitalism (which affect us and the world today) but is the eminence grise behind most of them.

“You’re doing a great job, Brownie (Larry, Timmy, Barry, oh just place your favotite fuck-ups name here)

Keep in mind, a scumbag like Summers was not a fuck-up, he accompliced exactly what he and his ilk set out to do, and that was to cement the future of americas economy to wall street instesd of main street. He and Timmy and the rest of the Friedman Reaganomics crowd all realize that americans ability to borrow and spend their way to decent lives is over. We out here in middle class america are just begining to realize that the game was fixed. Only those who knew it was fixed will prosper now, and funny, it was the same small group that prospered before.

You have to hand it to Summers, he has achieved every goal he set out with. He has helped cause the complete reversal of wealth distribution, and thus political power in our nation, back to the top 1%, where he, being an elitest, always thought it should be.

Barry needs to wake up. It seemd that his ultimate goal is to join that 1%. But he fails to see that his relatives did not come over on the Mayflower, or pass through Ellis island, to america’s top 1% he and his kind will always be the lowest of the low, Uncle Tom wannabes who should be working in kitchen or garden.

But I digress..

Barry now wants to appoint another “big businessman” to this post in order to shore up his street cred with the Masters of the Universe. Let Barry’s trip to the dark side now be complete. How much longer will Barry and other blue dogs worship at the failed altar of Reaganomics?

Another two years I suspect.

Summers’ firing is not going to reverse White House policy.  In fact, the news suggests that the Obama adminstration is just going to further astray.  The OMB directorship is going to someone who just earned millions in bonuses at a derivatives trading branch of bailed-out Citibank and Summers’ replacement will apparently be the former CEO of Xerox.  A banker and a corporate executive!
Does anyone still doubt who Obama is working for?

Summers bears a lot of responsibility for pushing the deregulation that allowed the big banks to gamble with the taxpayer guaranteed funds in the derivatives markets. When these markets imploded, he was a major proponent for bailing them out. He’s nothing but a corporatist hack, and he will not be missed. Good riddance!

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tedmurphy41, September 22 at 8:26 am

“If Lawrence Summers was as bad as you state, how did the President manage
to employ him as his ‘top’ economic adviser??”

You have GOT to be kidding us. Do you have any idea what has been going on
in this country during the last two years? I would ask you if you even read , but
you managed to make it somehow to TD.

It’s one thing to have made the mistake, as I did, in voting for Obama; it’s quite
another to still be addicted to the Hopium after all that has emerged regarding
this idiot Summers and his dysfunctional protege, Geittner. Both of these
turkeys may have sufficient credentials, but it’s when public officials then
intentionally lie or hide the truth ..... THAT is a total lack of integrity. If that’s
what we have to look forward to when misanthropes like this get into office, we
might as well put my dog in there. At least we can count on my dog not being
a GD lier.

BTW, take a look at the banner behind Summers. They must not have received
the same memo you did.

If Lawrence Summers was as bad as you state, how did the President manage to employ him as his ‘top’ economic adviser??

Another rat deserting the sinking ship!

Most of the press, and most of the media, and evidently posters
here, seem to accept lies as necessary.  Reward dangerous
incompetence, if not corruption (conflict of interest, money for
policy) with greater responsibility.  The acceptance of sociopathic
behavior and insanity as normality.

Finally Scheer is waking up to the frenemy behavior of Obama.  I
hope more jounalists join him, but not optimistic. BTW, Obama is
appointing another bankster who, according to the Huff Post
article, doesn’t think that deregulation led to the collapse of the
financial system.  Scheer just quite have the guts to point out that
Obama is working for the banksters, not us.

Maybe next year.

{Sheer: But Obama’s effusive praise on Tuesday went well beyond the requirements of professional pink-slip courtesy and suggests that he is still in denial over the role of key Democrats like Summers in getting us into this mess}

What sort of nonsense is this?

Obama is giving Summers a pat on the back, perhaps too effusively (but who cares?), because that is the way protocol works in LaLaLand on the Potomac. Though, evidently not in journalistic circles. Besides, if he did otherwise, candidate economists for replacement would think twice about accepting the job for fear of the president’s wrath when leaving it. And, Lord knows, we need some good talent in Washington as regards competent economic policy making.

A president should surround himself with the best and Summers was amongst that group. Geithner is as well. Would Obama have been any better than Bush had he picked sycophants?  No, we’d still be bitching, bitching, bitching because some people do not come up to OUR measure of political suitability. These present times have been almost unique in the history of the nation. The Great Recession is historically one of the deepest and longest.

And, for our Certified Keynsian Stimulators, allow this Business Economist to say that such stimulation has never proven all that effective. It helps stop the bleeding (unemployment numbers) but it rarely enhances the consumer Feel-Good-Factor that is clearly obligatory to get them to spend willy-nilly once again. Consumers sparked this recession and consumers are the obligatory ingredient to end it.

And pointing the finger of blame on specific administration individuals is not of any great consequence since their real participation in the overall economic policy making is often piecemeal. Try being an economic consultant and you will understand the meaning of this.

Which brings me to my point: Can’t we stop the cathartic bitching-in-a-blog with its nonsensicality?  What the hell good does it do? If we’ve a cogent argument, then post it. If not, we’d be missing an excellent opportunity to not waste Internet bandwidth.

One’s bad humour is rarely ever of any great interest to anyone else. And it borders on journalistic selfishness to want to share it with the world. Besides, we need well-reasoned policy solutions, not the constant complaining that is the present hallmark of journalistic reporting.