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Rich Treasury Secretaries Laugh It Up Over Income Inequality

Three of the world’s richest and most powerful people (and Timothy Geithner) had a good laugh over income inequality earlier this year.

Timothy Geithner, Robert Rubin and Henry Paulson 

Andrew Bossone shared this link

Such nice guys

Three of the world’s richest and most powerful people (and Timothy Geithner) had a good laugh over income inequality earlier this year.
m.huffpost.com

Former Treasury Secretaries Robert Rubin, Henry Paulson and Geithner were asked about the issue by Facebook executive Sheryl Sandberg during a conference in Beverly Hills.

When Paulson responded that he’d been working on income inequality since his days at Goldman Sachs, Geithner quipped, “In which direction?” 

“You were increasing it!” cracked Rubin, as everyone on stage roared with laughter.

Watch the exchange:

The April conference was hosted by former junk-bond kingpin Michael Milken, who served prison time in the 1990s for securities and tax scams.

Milken has since attempted to rehabilitate his image through philanthropy. (With whose money?)

After serving as Treasury secretary under President Bill Clinton, Rubin made over $120 million working at Citigroup, which he left shortly before the faltering megabank was bailed out by taxpayers.

Rubin spent 26 years at Goldman Sachs, and ran the firm for his final two before joining the Treasury.

Paulson made about $500 million working at Goldman before serving as Treasury secretary under President George W. Bush.

Geithner had to settle for making $411,200 a year when he served as president of the Federal Reserve Bank of New York.

Geithner and Paulson coordinated the bailouts that saved Citi and other banks in 2008. Geithner succeeded Paulson as Treasury secretary under President Barack Obama and took a high-paying job at the private equity firm Warburg Pincus in 2013.

Sandberg, whose question prompted the moment of levity, is worth almost $1.2 billion. She worked for Treasury Secretary Larry Summers during the Clinton years and has been a staunch advocate for women’s equality in the workplace.

While in office, all three men advocated Wall Street-friendly policies that helped bolster pay for top bankers.

Overall worker wages have been stagnant for decades and falling for most workers since 2007.

Any reforms applied to the capitalist financial institutions?

Almost 3 years to the onset of the financial crash of the century and we have the firm conviction that no reforms to the financial institutions have been applied so far.

The International Regulatory Bank has issued a report in June 2010 and proposed a “moderate” attitude to reforms stating: “Instead of attempting to eradicate financial crisis, which is impossible, we have to reduce the frequency and severity of crisis.”

What that means?

How frequently must crisis take place for mankind to suffer and support; and how level of severity is quantified?

Are there any indicators and measuring sticks to appropriate number of crisis and corresponding severity?

Who is supposed to be bearing the brunt of the impending crisis?

Barack Obama wanted to downsize  multinational financial institutions that are “too big to allow them to fail” so that the tax payers should not be obligated to maintain systemic dangerous institutions.

Congress was not pleased with the suggested reforms:  The financial lobby engaged over 1,500 professionals (lawyers, financiers, and politicians) and spent $350 million to “redirect” the project law under discussion.

That amount earmarked for lobbying congress represents less than one per thousand of the 400 billion profit generated in the last semester of 2009. This profit accounts for 38% of the total profit of the USA in that semester.

Let us put things in perspective:

1. First, the four largest banks in the US has 42% of all the assets in 2009 and held 96% of the 300 billion of the derivative products.

2.Second, every day witnesses financial transactions amounting to 5 trillion while the total saving for all the nations is less than 4 trillion per year.

Nobel laureate Joseph Stieglitz reminded us that

Larry Summers and Timothy Geithner (finance minister) were the same individuals who impose deregulation during Clinton and prohibited any interventions in regulating market derivative products.  It is the multinational financial institutions that are “lending” their experts to governments:  Government is claiming to being helpless faced with the shortage of financial experts willing to working for the government”

Paul Krugman, another laureate, wrote: “The ratio of finance profit to the GNP jumped from 4% to 8% in the last two decades, but the resulted in no economic real growth.  The economy was rendered less stable and less performing due to financial deregulation.”

Paul Volcker, ex-chief of the Federal Reserves during Reagan, said: “You don’t find a single American graduating with superior diploma in engineering, math, or physics.  Wall Street has drained all the bright minds into the financial world.”

Paul Volcker is the same guy who predicted that his financial policies during Reagan will let “blood flow knee-deep” in Latin America.  Indeed, most of the Latin States were ravaged by civil wars and internal unrest and upheaval for two decades.

You might think that the financial crisis and its everyday repercussions on unemployment and lower standard of living has dissipated the illusion that “increased financial transactions can be counted as increase in internal market trade“;  this illusion is still maintained by the media at the sold of the multinationals.

There was no real economic growth in the US and Europe in the last 10 years:  Just a big bubble of the illusion of growth.

Obama-metrics: What to expect?

In the previous two posts I enumerated the promises of Barack Obama campaign promises and how to rebound. Bill Adair (Pulitzer Prize) published the Obama program that included 510 promises. Promises being executed are 240 promises, 86 promises were kept, 26 were compromised, and 62 were blocked by the oppositions.

            Russell Banks reported the restrictions of the US political systems on the initiatives of President Barack Obama campaign program.  The US system is Not democratic for two reasons: First, in a democratic system the leader of the winning party is the leader of the nation and it is the way around in the US except when the President is running for a second term: Once a President is elected then his party appoint him leader of the party. Thus, the President is controlled by the heavy weight politicians and administrators of his party.  Actually, the President is not elected by the majority of popular votes but by the delegates of the States.  There are many instances when the majority of the popular vote was defeated (Bush Junior is the most recent example)

            Second, even if the winning party has majority in the Senate, any text of law needs 60 out of 100 Senators to agree on reading a text.  A Senator from Nebraska has as much power as the one representing New York State. Thus, the President is constantly managing the heavy weight politicians and Senators of his party to passing any law before even negotiating with the opposing party.  Anything in the US to get moving needs frequent popular active pressures on the Senators of the States of both parties to reaching a law favorable to the neediest: a Senator has to realize that financial backing by lobbyists cannot counter balance the angry voters.

            The US is a Republic trying for a century to becoming a plutocracy (run by the heavy weight politicians and lobbyists); the US political system might get there if Obama fails to capitalize on his landslide victory. We can understand why for a century the successive Administrations did their best to alienate people from getting involved in politics by making the political process more complex and by extending activities that shun people away from politics such as sports and entertainments.

            In a bipartite system it is the center that is the determining factors; mainly the economic and internal policies. Obama shifted the center a bit to the left by moving from total privatization concept that began 40 years ago to involving the Federal government.  Obama re-appointed the culprits of the financial disaster such as Timothy Geithner, Lawrence Summers, Peter Orszag, and Ben Bernanke; all of whom coming from Wall Street related institutions. For example, the Administration refrained from selecting among the syndicate leaders, militant associations, intellectuals and university professors. It seems that Obama started with a high dose of confidence in the authority of the richest class in matter of financial and economic management.

                        Obama managed to bring public opinion around the classes that need more attention and care or what is more likely, it is the American people that opened Obama eyes to new realities and he grabbed the opportunity. If the public was not convinced that banks, lobbyists, and multinational financial institutions are pure robbers of their public wealth then Obama could not have won with such a landslide.

            So far, Obama was successful in forging ahead and putting in execution many promised reforms of his program announced during his campaign trail by shear momentum: The public that supported him failed to get on the move; thus, Obama had to relent and bend before the opposition public activities before launching new “controversial” initiatives. The new public health program added 30 million more citizens but it is to kick in by 2013.  More citizens are demanding and expecting to witness a Presidential will for stringer regulations and control on the banks and multinational financial institutions.

            Unfortunately, in foreign policies Obama is playing the traditional and exhausting Washington provincial game that requires internal consensus: Obama is resuming the traditional strategy save in his rhetorical ability in the selection of words, tones, and style.

            Obama did not prove to the public that he exercised good imaginative alternatives to redressing the financial and economic crisis.  Obama has to remind the public that he is the victor so that the public may extend him voluntary rights to guide the nation against the many political restrictions that are erected against public opinion pressures.  For the time being, if you inhale deeply then you realize that US policies didn’t make a qualitative dent for long-term reforms.

Can US political system be reformed? (Jan. 12, 2010)

            Detroit voted Barak Obama. The counties of Oakland, Macomb, and Wayne, black, white, lower and middle classes voted Obama.  Ground Zero Detroit lost 70,000 homes to creditors in the last two years; everyday, houses are burned to capture insurance and move to suburbs; from 2 million in 1950 Detroit has shrank to 700,000. The jobless rate is 40% and barely Ford of the “Big Three” is surviving.  Detroit voted Obama for his universal health care project; the now apathetic voters never considered that Obama will send a law that pleases the hysteric Republican Party. They believed than a margin of 8 million votes would make Obama believe that time for serious political decisions are ripe and he was elected to LEAD.  The voters hoped that Obama will urge them to get moving to the Capitol to pass “their health care project”; instead, the republican got on the move to kill any hope for reforms.  If you are out of work then your health insurance is cancelled; you have to seek Luther Keith, pay $20 to see a physician, and then get a working relative to guarantee payment.

            President Obama has to take a stand on three decisions:

            First, every cabinet member and assistant has to read all of Obama speeches.  The members who do not believe that “What I said is what I mean” should be fired on the spot; then Obama can start to delegate responsibly.

            Second, Obama has to re-connect with all the syndicates and organizations and rally most of them to the Democratic Party. Only a unified front of workers and middle classes with a serious new perceived value “health and safety for all” can change the lobbying political system.

            Third, Obama has then to start sending reform laws as he promised his people to do and not what might please the losers in the election.

            In the Senate, if 40 out of 100 veto a law then the discussion can be prolonged indefinitely. Senator Joseph Lieberman vetoed the creation of “public option” for Americans with no health insurance.  Deputy Dennis Kucinich harangued his colleagues in those terms “Are we the Congress of the USA or the administrative council of Goldman Sachs?” President Obama had preached “I didn’t campaign to aid the big bonnets on Wall Street” but he did bail them out with $700 billion. Sure, Goldman Sachs, Citigroup, JP Morgan, UBS, and Morgan Stanley did contribute to Obama’s campaign as they contributed to the other party too. What was the fraction of contributions of these multinationals? Was it worth it to appoint Wall Street lead man Timothy Geithner as Finance Secretary?  Was it worth it to appoint Lawrence Sumners who is the architect of financial deregulations?

            Appointing the enemies to reform programs has nothing of pragmatic; Hillary Clinton is not pragmatic: she loves “Pride and Anger” of late Oriana Fallaci and disseminated the book to all her acquaintances. Obama foreign policies turned out carbon copies of Bush Junior toward the Islamic World.

            The US political system is Not “separation and balance of powers”; this myth has been proven wrong in critical periods.  The US system is a multilayered duplication of levels so that money can enjoy the last word.  How can a President vanquish well entrenched structures and when the opposition is hysteric for being ousted and refuses to submit to rational judgments?  The US multinationals are active free agents ready to falsify and fabricate crisis, instill financial crashes, provoke depressions and then take pleasure profiting from the blood and miseries of the little people.

            Obama has to start taking stands in the interest of the little people who voted him in. Time is running out and compromises with the enemy have proven lethal.  The world is shedding blood, miseries are rampant, and famine is waiting on the corner.

            Obama, your credibility as a leader is being tarnished.  There are no harms trying alternatives but when faced with the inflexibility of your enemies then you should not conciliate; you have to react with vigor and determination as a victor leader and the people will back you up when you ask them to march.  Take responsibility: You won the election and political decisions are yours to deliver on your promises.


adonis49

adonis49

adonis49

July 2020
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