Obama's Toxic Advisers by Robert Scheer

[Better Believe It]

Obama's Toxic Advisers
By Robert Scheer
The Nation
March 25, 2009

Bernie Sanders, the senator from Vermont who is independent in spirit as well as party label, has placed a hold on President Obama's nomination of Gary Gensler to head the Commodity Futures Trading Commission. Sounds like a minor issue to get worked up about, but the senator is right. Like most Americans, I am eager for Barack Obama to succeed, but I see this appointment as further evidence that the president has entrusted his economic policy to the wrong people.

Sanders' hold will not stop the Gensler nomination, because Congress and the president, recognizing the nation's mood, want to give Wall Street whatever it wants to make the stock market go up. And Gensler is a reassuring figure to the moguls of finance; he was a partner at Goldman Sachs before being brought by Goldman honcho Robert Rubin to the Clinton Treasury Department.

After Rubin left to take a $20-million-a-year job at Citigroup, which he helped run into the ground, Lawrence Summers, his protege and replacement at Treasury, elevated Gensler to be an undersecretary. Gensler then performed as Summers' point man in advocating for deregulation legislation that enabled the current debacle.

In congressional testimony supporting the radical deregulation of the financial derivatives market, Gensler had insisted with great enthusiasm that "OTC derivatives directly and indirectly support higher investment and growth in living standards in the United States and around the world." As to the many trillions of dollars in credit swaps that now afflict the world economy, Gensler specifically called for freeing swaps of this kind from existing government regulation in the Commodity Exchange Act, which regulated other futures such as wheat sales. He said, "...wap transactions should not be regulated under the CEA. ..."

So "they"--Summers, Gensler, Treasury Secretary Timothy Geithner and their ueber mentor, Rubin--were as wrong as anyone could be. Perhaps such error is human, but aren't there folks out there with a better prospect of getting it right that Obama can rely on?

Please read the complete article at:

http://www.thenation.com/doc/20090406/scheer?rel=hp_picks

[Skwmom]

1. What irony that Gensler is being rewarded with Born's old job for getting it wrong.

Simply amazing.

[bvar22]

2. I'm with Bernie.

What is good for Goldman Sachs is not necessarily good for Americans who have to Work for a Living.
GS has WAT too much representation in the Obama administration.
I'm getting tired of the trickle down Bailouts.

[Djinn]

9. trickle down AKA

being pissed on from great heights

Obama HAS to dance with those that brung 'im, and they were rich people. Absolutely nothing "changed"

[masuki bance]

3. I'm soooo tired of people like Scheer and Sanders

thinking that they are being helpful in any way standing on the sidelines spitting on people.

[avaistheone1]

7. You should be spitting with Sanders at Gensler's nomination.

"Gensler then performed as Summers' point man in advocating for deregulation legislation that enabled the current debacle."

What part of Gensler's role in this debacle do you not understand?

[Two Americas]

8. ok

So your response is to stand on the sidelines and spit at Scheer and Sanders.

[Mass]

13. I take 60 Sanders in the Senate. That way, we would get things done.

[slipslidingaway]

4. K&R n/t

[JohnWxy]

5. recommended.

[brentspeak]

6. More foxes guarding the hen-house

This is absolutely no different than it was with Bush.

[FrenchieCat]

10. You might as well make that your sig; it would save you time.

Extensive regulatory overhaul planned
Sources: Obama admin. proposing regulation overhaul in areas blamed for financial crisis
Martin Crutsinger, AP Economics Writer
Wednesday March 25, 2009, 11:24 pm EDT

WASHINGTON (AP) -- The Obama administration is proposing an extensive overhaul of financial regulations to increase oversight of such exotic instruments as credit default swaps that have been blamed for contributing to the worst financial crisis to hit the country in seven decades.

Officials said Wednesday that the administration will seek to regulate the market for credit default swaps and other types of derivatives and require hedge funds to register with the Securities and Exchange Commission.

Treasury Secretary Timothy Geithner was scheduled to outline the administration's proposals in testimony Thursday before the House Financial Services Committee. Administration officials provided details of the plan ahead of the testimony only on condition of anonymity.

The program the administration was presenting to Congress will also include a recommendation for creation of a systemic risk regulator, possibly at the Federal Reserve, to monitor risks to the entire system.
snip
The administration, pushing Congress to act quickly on its reform agenda, sent Congress a 61-page bill dealing with the expanded powers to seize control of nonbank institutions late Wednesday and the House Financial Services Committee, chaired by Rep. Barney Frank, has indicated it could move on the measure as early as next week.

However, it was unclear how fast the rest of the financial reform agenda might move through Congress. Geithner was providing only a broad outline of the other proposals, with many thorny details remaining to be worked out.

Administration officials promised that the remaining issues would be hammered out in consultation with Congress with the goal of getting legislation approved as quickly as possible.

The administration is proposing that hedge funds and other private pools of capital, including private equity funds and venture capital funds, be required to register with the SEC if their assets exceeded a certain size. The threshold amount has yet to be determined, officials said.

The proposal on credit default swaps and other derivatives would require the markets on which they are traded to be regulated for the first time and for the buying and selling of these instruments to be conducted in a way that will foster greater oversight.
snip
The Bush administration resisted calls for tighter regulations in these areas but the Obama administration has signaled its willingness to do more and is hoping that the flaws in current regulations that were exposed by the financial crisis will spur Congress to act.
http://finance.yahoo.com/news/Sources-Extensive-regulatory-apf-14748976.html

[EmilyAnne]

11. THANK YOU! nt

[dionysus]

12. .