The Good Hands People

The whole process of "fixing" the economy seems to me to be out of control and is being "fixed" by many of the same individuals who facilitated getting us into the mess.

Don't get me wrong. The lion's share of the blame goes to us citizens as spendthrifts and Wall Street as the sheep shearers.

But there is a huge amount of grandstanding by the same politicians and government operatives who facilitated the mess. Some points.

Robert Rubin: Glass-Steagall was put in place in the 1930s to prevent banks from also setting up investment operations. It was repealed under the Clinton watch. On the Whitehouse end, the push to repeal was spear headed by Clinton's own Treasury Secretary, Robert Rubin. Within a few weeks of the repeal, Rubin left that post and took over a top position at Citibank. And we all know what has happened to Citi since then.

Larry Summers: As Treasury Secretary, also under Clinton, he gave approval that credit default swaps did not have to be regulated. Ooops.

US Representative Barney Frank and Senator Chris Dodd: Both had long pushed that Fannie Mayhem and Freddie Fraud take on more and more suspect mortgages in the interest of helping the disadvantaged buy homes. A noble goal. Except they should have helped them get jobs before they helped them get homes they could not pay for. Thus they enabled the likes of Countrywide and others to dump their crap on FM-FF. Not to worry. The government (taxpayer) would not be on the hook. Ha! Oh, did i mention that Dodd is under an investigation in Congress for the mortgage sweetheart deal he got from Angelo Mozilo, CEO of Countrywide before Countrywide blew up? That investigation will go no where as too many other pols are dirty also. And Dodd is under a similar housing cloud for another sweet heart real estate deal in, of all places, Ireland. Dodd, Frank and others in congress have gotten campaign donations from FM-FF, Countrywide and others. And now i see that the so-called "Dodd amendment" in the stimulus bill that was passed last month had a clause that specifically allowed bonus agreements to be paid out, such as AIG's. Dodd now claims that it was not in his amendment when it went to committee and he does not know how it got into the bill. So if you take that as true, then the more damning critique is that Dodd and congress do not even know what they are voting on. See THIS for the story on the Dodd Amendment.

George Bush #2: He let PAYGO (pay as you go) lapse. The odd thing is that it was in George Bush #1's administration that PAYGO was first put in place. Bush #2 should have listened to his father.

Tim Geithner: Prior to becoming Treasury Secretary he was the governor of the New York Federal Reserve Bank. The NY Fed is supposed to take the lead on recommendations and follow through on the overseeing of Wall Street. He was in the slot when the excess grew and finally blew up. Now he runs treasury. Was that position a reward or punishment? Oh yeah, Geither was also so busy managing the New York Fed, that somehow, he forgot to pay his Social Secuity Taxes he owed when he worked for the IMF. Now he has the IRS under him. As an aside, today I saw Obama on tv defending Geithner. It reminded me of Bush's infamous "you're doing a heck of a job, Brownie" fiasco in trying to defend the indefensible.

Alan Greenspan: Poor guy! He is all over the press trying to paper over and defend his blunders, easy money, poor eyesight when it came to bubbles and serial financial bailouts. Very sad. He should change his name to Greenspin.

Hank Paulson: What does one expect when the guy who is supposed to be the guardian of the people's treasury previously headed up Goldman Sucks.

Ben Bernanke: Protégé of Greenspin. Helicopter Ben. Depression expert. Fed governor from 2002-2006 and Fed Chairman from 2006-2009. What was he exactly doing at the Fed during the lead up to the current situation? And why is he the best guy to resolve the current situation?

As I said, the lion's share of the blame goes to US citizens as spendthrifts and Wall Street as the sheep shearers.

But it is very hard to believe that we are now in good hands and that all will be well.