Or, how the fox will guard the henhouse so all will be safe and well...--javaAha: the Politico notices that Phil Gramm, McCain’s economic guru, can also be viewed as the father of the financial crisis.
The general co-chairman of John McCain’s presidential campaign, former Sen. Phil Gramm (R-Texas), led the charge in 1999 to repeal a Depression-era banking regulation law that Democrat Barack Obama claimed on Thursday contributed significantly to today’s economic turmoil.
….
According to federal lobbying disclosure records, Gramm lobbied Congress, the Federal Reserve and Treasury Department about banking and mortgage issues in 2005 and 2006.
During those years, the mortgage industry pressed Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages
Where have I seen that before? Ah:
His chief economic adviser is former Senator Phil Gramm, a fervent advocate of financial deregulation. In fact, I’d argue that aside from Alan Greenspan, nobody did as much as Mr. Gramm to make this crisis possible.
Seriously, the Gramm connection tells you all you need to know about where a McCain administration would stand on financial issues: squarely against any significant reform.
Seth Colter Walls
The Huffington Post
Latest McCain Economic Proposal Seen As Incoherent
May 21, 2008 12:38 PM
While proposing tax cuts twice as deep as those signed by President Bush, not only has McCain failed to explain how he'll pay for them, he's now also proposing new spending: a Republican heresy he surely would have blasted only a year ago, and which experts say would lead to an even bigger deficit.
The Christian Science Monitor concluded in April that McCainomics consists of "traditional GOP tax-cutting, with a dash of populism sprinkled on top." This week's sprinkle came in the form of a plan for increased job training for workers hit hard by the economic downturn -- precisely the same idea the RNC blasted Democrats for talking about three weeks ago:
"Obama and Clinton's economic plans are what you expect from two senators who think that big government is the solution for just about every problem. Obama and Clinton's plans for more taxes, spending and regulations will lead to fewer homeowners and jobs."
Compare that to an excerpt from McCain's economic speech in Chicago on Monday:
"We have to help displaced workers at every turn on a tough road, so that they are not just spectators on the opportunities of others. And I have made that commitment with reforms to expand and improve federal aid to American workers in need."
Chris Edwards, director of tax policy studies at the conservative Cato Institute, told The Huffington Post that McCain has thus far failed to give the public "straight talk" on the connection between his spending agenda and tax cutting plan. "Should McCain be consistent and match his tax cuts with spending cuts? Absolutely. We already have a $400 billion deficit, and we're against expanding that," Edwards said.
How to describe this contradiction, not only with his party, but with his own Senate record of voting against job training assistance for the past six years? "I'm sure its something his political advisers suggested he do," Edwards said. "I doubt it's an idea his economic advisers are particularly in favor of. But that's just something economic advisers have to put up with on a presidential campaign. ... For years, academic economic studies have suggested that [job training programs] are of dubious value, anyway."
Liberal economists who support the idea of job training assistance also wonder how McCain can achieve that objective, given McCain's tax cut priorities. Len Burman, a senior fellow and tax policy analyst with the the Urban Institute, called McCain's Monday speech "interesting," but cautioned: "His proposed tax cuts will either make it very difficult for the government to help vulnerable populations -- including many more than those displaced by trade -- or add to our ballooning budget deficits."
For his part, McCain spokesman Tucker Bounds disputed the notion that any new job training program would necessarily have to increase the deficit, and suggested that trimming "wasteful spending in Washingon" could pay for new programs. He also said McCain's new attention to the issue derives not from political expediency, but from the opportunity that running for president has afforded him to help workers in a way that accords with his "own ideas" about the economy.
Whether or not McCain's latest dash of populism is the result of political positioning, the validity his "own ideas" about the economy remains an open question. "I don't think -- and McCain has as much as admitted this -- he [has] a very strong basis in economic theory or understanding," Edwards said. Meanwhile, Burman noted that if McCain were to get his way and enlarge the deficit to expand job training assistance, "that would contribute to our trade deficit over time, meaning that more workers will be displaced by trade -- and fewer will benefit from the export-related jobs that the Senator trumpets."
Archive for Wednesday, May 31, 2006
Bush Turns to Wall St. for Treasury Secretary
President Bush on Tuesday nominated a high-powered Wall Street figure, Goldman Sachs Chairman and CEO Henry M. Paulson Jr., to replace Treasury Secretary John W. Snow, whose long-expected resignation Bush accepted.
Snow became the highest-ranking official to leave the administration in a midterm shuffle that began when White House Budget Director Joshua B. Bolten became chief of staff two months ago. Snow joined CIA Director Porter J. Goss and White House Press Secretary Scott McClellan on the list of former administration officials.
Bush, at a brief White House ceremony, praised Paulson for his experience with financial markets and said he would be his “principal advisor” on economic policy.
“Hank shares my philosophy that the economy prospers when we trust the American people to save, spend and invest their money as they see fit,” the president said.
But it was unclear how much Paulson would shape administration policy. Bush’s first Treasury secretary, Paul H. O’Neill, was frustrated that he did not have much influence. Snow found himself cast as a cheerleader for economic policies that were largely forged in the White House rather than at the Treasury Department.
Paulson, 60, seemed on track to win Senate confirmation, as even Democrats rallied to his side. Sen. Charles E. Schumer (D-N.Y.) praised his “deep understanding” of economic issues and called him “the best pick America could have hoped for.”
Paulson made brief remarks but took no questions from reporters.
“The whole world is dependent upon the U.S. economy as a major engine of its growth,” Paulson said. “And our economy’s strength is rooted in the entrepreneurial spirit and the competitive zeal of the American people, and in our free and open market. It is truly a marvel, but we cannot take it for granted.”
Paulson’s nomination also attracted some critics. One group said Paulson, like Snow before him, would find himself relegated to the role of promoter of ill-advised White House economic policies.
The administration hopes “to tap into Wall Street’s legendary ability to put lipstick on a financial pig,” said Peter Schiff, president of the Connecticut brokerage firm Euro Pacific Capital.
Paulson, a multimillionaire, received $38 million in overall compensation from Goldman Sachs, the New York investment house, in 2005. He raised at least $100,000 for Bush’s 2004 reelection campaign, making him a “pioneer” in the Bush campaign. He also personally gave $100 million in Goldman Sachs stock this year to a family foundation dedicated to conservation and environmental education.
Paulson follows in the path of Robert E. Rubin, who left the chairmanship of Goldman Sachs in 1993 to become an economic advisor to President Clinton and was promoted to Treasury secretary two years later. Rubin, who presided over a period in which the federal budget moved into surplus for the first time in three decades, is widely regarded as the most effective recent secretary.
Circumstances may make it difficult for Paulson to play this kind of role.
James Glassman, an economist at J.P. Morgan Chase Securities, said the role of Treasury secretary in the current climate is “very limited.” “With the economy doing fairly well, it’s not clear there’s any need for anything major,” such as new tax cuts or increases, Glassman said. “It really may be more public relations, sort of getting-the-message-out idea, that’s most critical.”
White House Press Secretary Tony Snow insisted that Paulson would be a key economic policymaker. “You don’t bring in a Treasury secretary as a PR man,” he said, although he declined to identify the policy issues in which Paulson would play a central role.
John W. Snow announced his departure from the Treasury secretary’s job in much the same style that he has filled it since February 2003 – as a pitchman for Bush’s economic policies.
“Your economic policies have put the American economy on a strong upward path,” he told Bush at the White House ceremony. “And I’ve been pleased to have had a part in working with you to advance those policies.”
Snow had been rumored as a candidate for involuntary departure from the Treasury Department ever since Bush won reelection in November 2004. He held on to the job with unflinching public loyalty to administration economic policies. Last year he served as a major advocate of the administration’s unsuccessful proposal, developed in the White House, to divert some Social Security payroll taxes to personal retirement accounts.
Snow, 66, was chairman and chief executive of railroad company CSX Corp. before becoming Treasury secretary.
Bush said as recently as Thursday that he had not talked with Snow about his departure.
“No, he has not talked to me about resignation. I think he’s doing a fine job,” Bush said then, during a press conference.
As it turned out, Paulson had accepted the Treasury job four days earlier, said Tony Snow, the White House spokesman. No public announcement was made because Paulson was still undergoing background checks.
John W. Snow has not set a date to leave the Treasury, and plans to attend the G8 summit of the heads of the seven major industrial countries and Russia in St. Petersburg in July. He has quoted former Secretary of State Colin L. Powell, who said as he prepared to leave office: “You’re secretary until you’re not.”
In my book Hostile Takeover, I note that these sorts of payoffs happen all the time -- and they are made with public policy favors in mind. The most high profile before Paulson's was the payoff Halliburton gave to Dick Cheney in the form of a truckload of "deferred compensation" valued in the tens of millions. At the time, those who raised questions about what such a payoff would buy were dismissed by the Washington Establishment as conspiracy theorists . The insiders who populate this Establishment, of course, are addicted to the revolving door, and they didn't want anyone questioning it. Now, just a few years later, we found out that, indeed, Halliburton's generosity to Cheney was a payoff, as the Vice President used his office to help the oil company secure huge government contracts in the aftermath of the Iraq War.
So again, a simple question: With Goldman Sachs handing incoming Treasury Secretary Henry Paulson an $18.7 million bonus for six months of service, what is the company looking for in return? After all, Goldman Sachs has had a lot of business before the government that Paulson's Treasury Department has been involved in and can influence. Here are just a few factoids about the Goldman Sachs-Government connections that raise questions about the Paulson payoff:
- The nonpartisan Project on Government Oversight (POGO) noted in a major 2002 study that Goldman Sachs is one of the largest beneficiaries of government contracts in America. It is also one of the contractors that POGO noted "have been found to have repeatedly broken the law or engaged in misconduct," yet still receives government contracts.- MSN Money notes that Goldman Sachs main profit-makers is its offering of "investment banking services to corporate and government clients."
- The Associated Press reported in 2004 that "Goldman Sachs is being sued by investors who say the firm cost them money by trading on advance knowledge of the Treasury Department's announcement in October 2001 that the government was ending sales of new 30-year bonds." Goldman Sachs "previously settled government charges that one of its economists used an illegal tip to make millions for the firm in advance of the announcement."
Obviously, these factoids raise questions. Just off the top of my head, I'm wondering whether the Paulson payoff will mean he directs more government contracts to Goldman Sachs? I'm also curious whether the Paulson payoff mean Goldman Sachs analysts will have more insider information from the Treasury Department which they can bilk investors with?
Sadly, these kinds of conflict-of-interest questions -- obvious, even before the public found out about the $18.7 million payoff -- were never even asked of Paulson by either party when he was brought before the U.S. Senate for confirmation. In fact, he was roundly sucked up to by Senators at his confirmation hearing a few weeks ago. Then, in the ultimate act of complicity, Senators confirmed him on a unanimous voice vote in the Senate Finance Committee, and again by voice vote on the Senate floor, meaning not one U.S. Senator was even willing to call for a recorded vote -- true proof of Big Money's hostile takeover of our government.
Nonetheless, despite our lawmakers playing dead in the face of the hostile takeover, these new questions about the Paulson payoff must be asked -- and Senators and House Members have a responsibility to ask them. Will our representatives have the guts to ask the tough questions? Will our representatives have the courage to ask why Paulson was given such a disgustingly large bonus right before heading into government service, and what that payoff is buying? Stay tuned.
Who is this man of the hour? This from Project Vote Smart about our Secretary of the Treasury...
Biographical
Issue Positions (Political Courage Test)
Interest Group Ratings
Speeches and Public Statements
Campaign Finances
(...don't bother because none of these links lead to information from the Secretary on these portions of the Project Vote Smart evaluation.--java)
Contact Information
Department Website:
http://www.ustreas.gov/index.h ...
Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220
Phone: 202-622-2000
Fax: 202-622-6415
Secretary Henry M. Paulson Jr.
Current Office: U.S. Secretary of Treasury
First Appointed: 06/19/2006
Background Information
Gender: Male
Family: Wife: Wendy
2 Children: Amanda, Merritt.
Birth Date:
Birthplace:
Home City:
Religion:
Education:
MBA, Harvard University, 1970
Bachelors, Dartmouth College, 1968.
Professional Experience:
Chairman and CEO, Goldman Sachs, 1999-2006
Co-Senior Partner, Goldman Sachs, 1998-1999
President and COO, Goldman Sachs, 1994-1998
Co-Head of the Investment Banking Division, Goldman Sachs, 1990-1994
Managing Partner of the Chicago Office, Goldman Sachs, 1988-1990
Investment Banking Services for the Midwest Region, Goldman Sachs, 1983-1988
Partner, Goldman Sachs, 1982-1983
Goldman Sachs, 1974-1982
Staff Assistant to the President, White House Domestic Council, 1972-1973
Staff Assistant to the Assistant Secretary of Defense, United States Department of Defense, 1970-1972.
Political Experience:
Secretary of Treasury, 2006-present
Appointed, Secretary of Treasury, June 19, 2006.
Organizations:
Phi Beta Kappa.
(BTW, here is another tidbit...McCain didn't fill out his information either. So much for transparency ..."you will know their names"?-java)
McCain Gets the Boot From Project Vote Smart
Project Vote Smart, the nonpartisan voter-education nonprofit, confirms today that it has kicked John McCain off its board. Mother Jones reported on Monday that PVS was prepared to make the move due to McCain's nine-month refusal to fill out its Political Courage Test. According to PVS President Richard Kimball, the nonprofit has a rule that bars nonrespondents from serving on its board.
PVS contacted the McCain campaign 25 times from June 2007 to February 2008 in the hopes of avoiding the embarrassment this move entails for both the organization and one of its long-time board members. Eventually, however, they were simply left with no choice. The senator who made his career on straight talk couldn't spare some for the organization he served.
Here is another story about smoke and mirrors...ready to revisit Enron?--java
Posted July 4, 2006 | 07:14 PM (EST)