robert rubin Archives - Where Is The Outrage?

Saturday Evening News Roundup

Matt Taibbi has read Paula Bradwell’s biography of General David Petraeus. I appreciate his efforts. As a rule of thumb, I usually stay away from these types of biographies. They tend to be nauseatingly sickly sweet. They tend to fall on the subject in such a way as to make you think of two lovers in the backseat, fogging up the windows. Taibbi’s assessment of this biography is that it is basically exactly what you’d expect. There is no deep analysis. There’s no thoughtful retrospection. There’s nothing but praise. Interestingly, Matt goes on to tell us that the mainstream media does this type of non-critical journalism all the time. Remember when Time had Robert Rubin, Alan Greenspan and Larry Summers on the cover? They were dubbed the committee to save the world. No, seriously. That’s what Time called them. Now, as it turns out, not so much.

President Obama would like for more of us to shop local. Notice, he sets the example.

I continue to enjoy the fact that Allen West has conceded to Patrick Murphy.

Remember back in January when Pat Robertson, a longtime host of the 700 Club, told us that God had spoken to him and that God was no fan of President Obama? Several days ago, Pat Robinson had a mea culpa. He said, “so many of us miss God, I won’t get into great detail about the election but I sure did miss it, I thought I heard from God, I thought I had heard clearly from God, what happened? What intervenes? Why?” The answer is obvious. He did not hear anything from God. Instead, he heard his own prejudices. This is exactly why I think it is crucial that all of us, both Right and Left, understand that God is not a supporter of Democrats or Republicans. The God that I worship is a supporter of all mankind. He wants everyone to do better. Matthew 7:15 – Beware of false prophets, which come to you in sheep’s clothing, but inwardly they are ravening wolves.

By ecthompsonmd|2012-11-26T21:31:57-04:00November 25th, 2012|Economy, Elections, Obama administration, Party Politics|Comments Off

Double Standard? (Update)

Why are we treating British Petroleum and the oil spill different than Wall Street and our economic collapse? A friend of mine pointed out this actually fabulous article in the Huffington Post. (I have more to say on this article after dinner with my wife. This is a progressive priority! Update: dinner was great.)

BP–and the rest of the oil industry–relies on very risky technology to operate flawlessly under extreme pressure, in deeper and deeper water. According to the New York Times , Transocean commissioned a confidential study of safety records at some 15,000 deep sea wells. In 11 cases, crews “lost control of their wells and then activated blowout preventers to prevent a spill. In only six of those cases were the wells brought under control, leading the researchers to conclude that in actual practice, blowout preventers used by deepwater rigs had a ‘failure’ rate of 45 percent.” In short, a BP-like disaster was inevitable. But the industry and its allies studiously ignored that study and all other evidence of our offshore ticking time bombs. Drill baby drill! Just make sure you get the cash in your pocket before she blows.

Back on dry ground, we had similarly strong evidence that a Wall Street disaster was inevitable. Many thoughtful public and private officials cautioned us that Wall Street had recreated the very conditions that led to the crash in 1929 – financial deregulation plus too much speculative money in the hands of the few. In 1995, Brooksley Born, as chair of the Commodities Futures Trading Commission, warned President Clinton, Alan Greenspan and Congress that the fast-growing Wall Street derivatives casino could collapse at any time, taking the financial system with it. Her reward was to be driven out of government by Alan Greenspan, Robert Rubin and Senator Phil Gramm. The financial industry went into overdrive, creating and selling hundreds of billions of these risky products, which later turned into toxic trash. But till then, let the good times roll…for the elites. (more…)

Update: I’m not sure why we let large corporations walk all over us. It is if we believe that these large corporations are going to pack up and go to India or the Philippines. I just heard somebody say that strict financial reform would cause a major financial institutions to move to Hong Kong or London or even Tokyo. Seriously. There is no place in the world that is more innovative than the United States. These large financial institutions understand this.

Many people would look a statistic of 15,000 wells and only 11 failures and say, “Great. What a low failure rate.”. Unfortunately, in the environment, we can afford to have no failures. None. This is much like airplane crashes. We need to have 100% safety record because failure is so devastating. I would like to see both big business and our financial institutions push (or be pushed) for a zero failure safety rate because it is the best thing for our economy and the best thing for our environment.

By ecthompsonmd|2010-06-25T18:58:27-04:00June 25th, 2010|Business, Congress, Economy|Comments Off

Learning from the meltdown

What are the lessons that we can take from the financial meltdown? Too big to fail is too big to exist. That is one of the biggest lessons, but the Senate hasn’t learned squat.

From HuffPo:

A move to break up major Wall Street banks failed Thursday night by a vote of 61 to 33.

Three Republicans, Richard Shelby of Alabama, Tom Coburn of Oklahoma and John Ensign of Nevada, voted with 30 Democrats, including Senate Majority Leader Harry Reid of Nevada, in support of the provision. The author of the pending overall financial reform bill in the Senate, Banking Committee Chairman Christopher Dodd, voted against it. (See the full roll call.)

The amendment, sponsored by Sens. Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del.), would have required megabanks to be broken down in size and capped so that their individual failure would not bring down the entire system.

Under Brown-Kaufman, no bank could hold more than 10 percent of the total amount of insured deposits, and a limit would have been placed on liabilities of a single bank to two percent of GDP.

Brown-Kaufman was a good start but it got voted down. Why? Wall Street owns Congress. Regulation will never be enough to control these really huge banks. We need to limit their size.

Brooksley Born tried to look at derivatives. She wanted to investigate whether or not we should regulate derivatives. (This was back in the Clinton administration.) Larry Summers, Robert Rubin and Alan Greenspan shut her down cold. Derivatives were not regulated. Billions of dollars that were not accountable to us were part of the cause of the economic meltdown.

Finally, economist Dean Baker has a nice piece on Wall Street:

We had some hopes of reining in the million dollar babies with the financial reform package, but those hopes appear to be dimming. The effort to downsize the “too big to fail” banks got trounced in the senate last week, garnering just 33 votes. Apparently, the prospect of having to head out into the markets unprotected by the implicit guarantee of government bailouts was too frightening for JP Morgan, Goldman Sachs and the other big banks. Their lobbyists twisted the arms and got the overwhelming majority of the senate to continue the big bank subsidy of free government insurance indefinitely.

There is still another good opportunity to rein in the banks ability to gamble with our money. Senators Merkley and Levin have proposed an amendment that would prohibit commercial banks from trading on their own behalf. The point is that commercial banks are backed up by the Federal Deposit Insurance Cooperation and the Federal Reserve Board. If they get into trouble, it is taxpayers’ dollars at risk.

Until the repeal of Glass-Steagall in 1999, commercial banks were sharply restricted in what they could do, precisely in order to prevent them from taking advantage of this guarantee. If you wanted to engage in highly speculative activity you could set up a hedge fund or an investment bank, but Glass-Steagall prevented banks from gambling with government insured deposits. But this separation was obliterated by the repeal and now we have investment banks like Goldman Sachs and Morgan Stanley that are openly speculating with taxpayer insured money.

By ecthompsonmd|2010-05-11T22:32:35-04:00May 11th, 2010|Economy|Comments Off