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Author Topic: The more things Change...
Colin JM0397
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Is this the kind of change we asked for?
Can't say I'm one bit surprised...
Obama's Bailout Bunch Brings Us More of the Same
quote:
It's hard to believe Barack Obama would even think of calling this change.

Take a good look at some of the 17 people our nation's president-elect chose last week for his Transition Economic Advisory Board. And then try saying with a straight face that these are the leaders who should be advising him on how to navigate through the worst financial crisis in modern history.

First, there's former Treasury Secretary Robert Rubin. Not only was he chairman of Citigroup Inc.'s executive committee when the bank pushed bogus analyst research, helped Enron Corp. cook its books, and got caught baking its own. He was a director from 2000 to 2006 at Ford Motor Co., which also committed accounting fouls and now is begging Uncle Sam for Citigroup- style bailout cash.

Two other Citigroup directors received spots on the Obama board: Xerox Corp. Chief Executive Officer Anne Mulcahy and Time Warner Inc. Chairman Richard Parsons. Xerox and Time Warner got pinched years ago by the Securities and Exchange Commission for accounting frauds that occurred while Mulcahy and Parsons held lesser executive posts at their respective companies.

Mulcahy and Parsons also once were directors at Fannie Mae when that company was breaking accounting rules. So was another member of Obama's new economic board, former Commerce Secretary William Daley. He's now a member of the executive committee at JPMorgan Chase & Co., which, like Citigroup, is among the nine large banks that just got $125 billion of Treasury's bailout budget.

There's More

Obama's economic crew might as well be called the Bailout Bunch. Another slot went to former White House economic adviser Laura Tyson. She's been a director for about a decade at Morgan Stanley, which in 2004 got slapped for accounting violations by the SEC and a month ago got $10 billion from Treasury.

That's not all. There's Penny Pritzker, the Obama campaign's national finance chairwoman. She was on the board of the holding company for subprime lender Superior Bank FSB. The Chicago-area thrift, in which her family held a 50 percent stake, was seized by the Federal Deposit Insurance Corp. in 2001. The thrift's owners agreed to pay the government $460 million over 15 years to help cover the FDIC's losses.

Even some of the brighter lights on Obama's board, like Warren Buffett and former SEC Chairman William Donaldson, come with asterisks. Buffett was on the audit committee of Coca-Cola Co.'s board when the SEC found the soft-drink maker had misled investors about its earnings. Donaldson was on the audit committee from 1998 to 2001 at a provider of free e-mail services called Mail.com Inc. Just before he left the SEC, in 2005, the agency disciplined the company over accounting violations that had occurred on his watch.

Telling Stories

So, by my tally, almost half the people on Obama's economic advisory board have held fiduciary positions at companies that, to one degree or another, either fried their financial statements, helped send the world into an economic tailspin, or both. Do you think any of that came up in the vetting?

Let's say we give Buffett a pass -- smart move he made, skipping the group photo-op last week in Chicago. What about the rest of them? Donaldson, for one, was chairman when the SEC voted in 2004 to let the big Wall Street banks, including Lehman Brothers Holdings Inc. and Bear Stearns Cos., lever up their balance sheets like drunks. Talk about blowing it.

And whom did Obama tap for White House chief of staff? Rahm Emanuel, the Illinois congressman who was a director at Freddie Mac in 2000 and 2001 while it was committing accounting fraud.

Ideally, this job would go to someone who can't be easily fooled. Think about it: Of all the people Obama could have chosen as his chief of staff, couldn't he have found someone who wasn't once on the board of Freddie Mac?

Renewed Confidence

The president-elect needs some new advisers -- fast. We are in a crisis of confidence in American capitalism. These aren't the right people to re-instill its sense of honor.

Many of them should be getting subpoenas as material witnesses right about now, not places in Obama's inner circle. Did Obama learn nothing from the ill-fated choice of James Johnson, the former Fannie Mae boss, to lead his vice- presidential search committee?

Does he think people like Robert Rubin or Richard Parsons will offer any helpful advice on how to stop crooked bankers or sleep-walking directors from sinking our economy? Or that they won't mistake the nation's needs for their own corporate interests? Or that the people who helped get us into our long financial nightmare have any clue how to get us out?

Obama has created hope that our nation can stand for all that is good in the world again. It's not too late to change course.

Start by scrapping this board.

But it's Obama and he'll change things, right?
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G2
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I don't know if anyone really noticed but I'm not a big fan of Obama. No, seriously, I don't like the guy. [LOL] However, this does still surprise me. I really thought he might try to at least shake some things up - the whole hopey changitude thing and all. I never figured Obama to end up just being a retread of the Clinton administration with some white collar crooks thrown in.

This country is in for the biggest case of buyers remorse in history in about 6 months. The only salve for that will be to point out the other choice in the race ... not exactly change there either.

This brings a whole new level of meaning to "The more things change, the more they stay the same" doesn't it? I'd be laughing my ass off if it wasn't so depressing.

[ November 14, 2008, 03:07 PM: Message edited by: G2 ]

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scifibum
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quote:
So, by my tally, almost half the people on Obama's economic advisory board have held fiduciary positions at companies that, to one degree or another, either fried their financial statements, helped send the world into an economic tailspin, or both. Do you think any of that came up in the vetting?
Since large organizations were doing bad things, but only a percentage of the people within the organizations were aware of the bad things, I don't think association with such an organization is automatically damning.

Yet that's the argument being made here: guilt by association.

Were any of these individuals indicted, or even implicated in the problems listed? If so, that's something to talk about.

But working for a company that did bad things? Not enough to go on. It's certainly not the opposite; it doesn't mean they're the right people for the job. I just don't see how it's enough to make them unsuitable choices all by itself.

Unless you're kinda biased.

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Haggis
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Colin:

How about giving us a list of people that would be acceptable, so we can get an idea of what a good team would be?

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Everard
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Having at least a couple people on the team who know what "bad things," were going on and how loopholes can be exploited is probably a good thing. See: FDR and the SEC.

That said, half the team might be a bit much. I want to see what Obama does with this team before saying the composition itself is a problem, though.

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Colin JM0397
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The simple point is he ran on a promise of change directly relating to how the current administration runs things. Time will tell but what it is looking like so far is, as usual, we exchange one group of highly connected and suspect individuals for another group of highly connected and suspect (inasmuch as their motivations and who they are beholden to) group of individuals.

I agree with the article - I do like Buffett, but there are too many industry insiders from too many of the usual suspects for my liking.

Granted, IMO this is more of an overall problem with our government these days - the incestual relationship between high government offices and the industries they regulate, but still I was hoping he would shake things up a bit.

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Everard
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"The simple point is he ran on a promise of change directly relating to how the current administration runs things."

Yeah, and he hasn't done anything yet. He's set up a team. Putting together a team of 17 people with differing views and backgrounds means he's put together a team. Lets see what he does with it before saying he's not changing anything, neh?

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RickyB
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Can I please have some alternate names? People who happen to know where the bodies are buried would be nice.

That's basically his economic advisory team from the campaign, best I can glance. Who should he pick? I'm all ears.

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Colin JM0397
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As I said time will tell, but so far it looks like DC politics as usual.

Who I'd like to see are a bunch of people no one would bring in anyway - those who were against the bailout plan, and those who would work to either get rid of the Federal Reserve or at least bring it under proper government control.

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Everard
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And you have these 17 people on record on those issues?
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Haggis
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quote:
Who I'd like to see are a bunch of people no one would bring in anyway - those who were against the bailout plan, and those who would work to either get rid of the Federal Reserve or at least bring it under proper government control.
Can I get a for instance? How about three names?
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Michelle
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I was thinking about the Federal Reserve, today... Ron Paul often talks about doing away with it, but what if Obama approach Senator Paul with the possibility of running it? If we are going to have it; make it work.

Now that would be bold move that would get my respect.

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Stevarooni
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quote:
Originally posted by Michelle:
I was thinking about the Federal Reserve, today... Ron Paul often talks about doing away with it, but what if Obama approach Senator Paul with the possibility of running it? If we are going to have it; make it work.

[Embarrassed] Isn't that like the governor of Nevada asking Pat Robertson to run whatever division of the Health Department handles prostitution?

[ November 14, 2008, 08:27 PM: Message edited by: Stevarooni ]

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Colin JM0397
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That's essentially what they did with Alan Greenspan. He was pro gold standard and quite libertarian in the 60's-70's, and then the system got its hooks in him. Not the best idea becuase its a great way to shut up dissenters by bringing them over to the "other side"

-Ron Paul
-Paul O'Neil
-How about someone from outside who has shown to be a critical thinker - like a Thomas Friedman or Fareed Zakaria.
-Don't recall the name, but there is/was an analyst at the Minneapolis Feb branch - IIRC - who wrote a dire waining about F&F and the mortgage industry a few years back.
-No one who has ever sat on the board or been at the C-level of Goldman Sachs, Citi, F&F, Wells Fargo, etc.

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Everard
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"-No one who has ever sat on the board or been at the C-level of Goldman Sachs, Citi, F&F, Wells Fargo, etc."

I think this is a mistake in an advisory team. Big problem with the bush administration was a refusal to listen to experts when those experts didn't agree with the Bush teams preconceived notions.

Again, I refer back to Joe Kennedy and the SEC as a classic example. You want someone who knows the inside of the crooked game, if you want to uncrooked the game.

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Pyrtolin
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So basically what objectors are saying here is that we should make sure that no one who has a solid background in Finance should be appointed to analyze the country's financial needs?

[ November 15, 2008, 10:39 AM: Message edited by: Pyrtolin ]

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RickyB
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Pretty much [Smile]
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Colin JM0397
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After reading Jason's link here: The end of Wall Street

I'd hire every one of those people to clean up the mess. F-the c-level folks and F the analysts from those companies. That article has it all summed up very nicely. Why on Earth would we want these folks who had little to no idea what was really going underneath them to set up the rules to ensure it does not happen again? So they can tell us how the f-ed up everything so we know what not to do? That's idiotic. Kick them to the curb and get some people in there who know the system as only an insider can know it, but who was not a kool-aide drinker.

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Pyrtolin
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quote:
Originally posted by Colin JM0397:
After reading Jason's link here: The end of Wall Street

I'd hire every one of those people to clean up the mess. F-the c-level folks and F the analysts from those companies. That article has it all summed up very nicely. Why on Earth would we want these folks who had little to no idea what was really going underneath them to set up the rules to ensure it does not happen again? So they can tell us how the f-ed up everything so we know what not to do? That's idiotic. Kick them to the curb and get some people in there who know the system as only an insider can know it, but who was not a kool-aide drinker.

Good luck with that. The world of finance makes the the family tree of the Roman emperors look like a relatively neat and orderly affair.
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Colin JM0397
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Cuz I'm praying for rain
And I'm praying for tidal waves
I wanna see the ground give way.
I wanna watch it all go down.
Mom please flush it all away.
I wanna watch it go right in and down.
I wanna watch it go right in.
Watch you flush it all away.

Time to bring it down again.
Don't just call me pessimist.
Try and read between the lines.

I can't imagine why you wouldn't
Welcome any change, my friend.

I wanna see it all come down.
suck it down.
flush it down.

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TCB
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quote:
So basically what objectors are saying here is that we should make sure that no one who has a solid background in Finance should be appointed to analyze the country's financial needs?
It's more that the people who should be appointed to analyze the country's financial needs shouldn't have already proved that they lack the foresight to prevent devastating financial catastrophes.

There's not such a shortage of talented people in this country that only former F&F board members can run it. I can't give you a list of 17 names of those people off the top of my head, but I guarantee that they exist in America's universities, government, military, and private sector.

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Redskullvw
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How about CFO's from companies that have not cooked their books, have not asked for government bailouts, and who have proven that they are capable of taking their companies into market leadership positions?

Jack Welsch retired exec of GE
Ian G.H. AshkenIan CFO Jarden Company
John Owen, JetBlue Airways Corp
Karen Hoguet, Federated Department Stores
Danny Huff, Georgia-Pacific Corp.
C. Christopher Gaut, Halliburton Co.
Kriss Cloninger III, Aflac
W. Lawrence Cash, Community Health Systems
Gary Morin, Lexmark International
John Connors, Microsoft Corp.
Terrell Crews Monsanto
Howard Atkins Wells Fargo
Alvaro de Molina Bank of America retired
David Johnson Hartford Group

This is just a few of the types of people we should be expecting to see in a transition supposedly based upon "change". All are excellent CFO's, have hugely successful companies, and aren't standing in line for a handout- or for that matter aren't implicated in the monetary scandals that have taken many of their competitors out of action.

Honestly I thought Obama would be installing and relying upon a new generation of outsiders from even the Democrat party that would be committed to Obama's ideals and comitments.

Instead we are looking at a transition team of Clinton retreads.

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Pyrtolin
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quote:
Originally posted by Redskullvw:
How about CFO's from companies that have not cooked their books, have not asked for government bailouts, and who have proven that they are capable of taking their companies into market leadership positions?

And have no investments in or secondary associations with companies that are troubled?

I notice that, way down your list, you actually named people from the financial sector rather than people whose experience is with internal rather than external policies.

But Haliburton? Are you serious?

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Redskullvw
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Yes I am.
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Redskullvw
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No one else has a comment?
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Pyrtolin
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quote:
Originally posted by Redskullvw:
Yes I am.

Why not suggest any surviving folks from Enron while you're at it then, if you want to go for big league corruption?
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Redskullvw
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Well if you are looking for big league corruption- to a level that reached impeachment- having Clinton as your Secretary of State must seem pretty cool to the left wing of the body politic.

Of course Haliburton's agreement to pay fines to the US government for cost overruns falls somewhat short of Obama's apparently lofty standards.

I find it very hard to take Obama at all seriously if the rumored cabinet holders are actually named, there is every ground to criticize this incoming administration as having some of the most partisan & in many cases of the individuals who are in line to take the offices crooked/incompetent people ever.

Then again Carter shot himself in the foot with several partisians who were also ultimately convicted in various fruad charges.

Imagine an entire cabinet filled with Burt Lances.

Oh wait- I think all I have to do is wait until January's Inugural to find out.

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Haggis
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quote:
Well if you are looking for big league corruption- to a level that reached impeachment- having Clinton as your Secretary of State must seem pretty cool to the left wing of the body politic.
Hillary Clinton was impeached? I did not know that.

quote:
I find it very hard to take Obama at all seriously if the rumored cabinet holders are actually named, there is every ground to criticize this incoming administration as having some of the most partisan & in many cases of the individuals who are in line to take the offices crooked/incompetent people ever.
Welcome to my life, circa Jan. 2001-Jan. 2009. Bush set a new standard for incompetence, so much so that the American public elected the black guy.
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Redskullvw
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Oh Haggis don't be trite.

Her Husband was. While she endured legal investigation after legal investigation. Maybe I should have been more explicit and exact. But I think you knew that, and probably understood my point. Namely Clinton is dingy linens at best.

As to Bush being incompetent, hardly. But in this current void, pointing out even that he understands how a light switch works is tantamount to declaring oneself to be a satanist in a Catholic church.

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Haggis
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quote:
As to Bush being incompetent, hardly
That's what she said.
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