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It's been an exciting past couple of decades for us Gen Yers to grow up in. I mean exciting in the full sense of the word, both positive and negative. One of the components that really fascinates me is the tension between being 'reality-based' or 'evidence-based' and being partisan. We like to claim Democrats take the high road, that we're better than Republicans. And often times that is the case; the GOP of the past generation is its own unique brand of hypocrisy and corporatism. That's why Millennials are more likely to identify as Socialists than Republicans. The alternative to the Democratic Party for most Gen Yers isn't the GOP. Rather, it's apathy, a resignation that all politics is theater, that it doesn't matter who gets elected, and despair, that while it might matter who gets elected, there's nothing anyone can do about it, anyway.

But here's the thing. We Democrats are better except when we're not, in which case, we say that it's 'politically expedient' not to investigate possible shortcomings of (wealthy and powerful) Democrats. We can't pressure Person X on Issue Y because it's an election year/we need more seats/the idea isn't popular/blah blah blah.

Maybe there are people out there that approach appeals to, I don't know. Maybe those who grew up in the post-war period have some experiential connection to a time when that worked. I just don't know or understand, and that intrigues me. From my generation's experience, Republican-Lite is precisely how you lose elections. Americans don't like wussy leaders; we like strong leaders. We don't want to be sheltered from mistakes; we want people to acknowledge them and ask forgiveness.

And I think that's why Hamsher has been able to stir up so much passion among leftistism types. Whether you agree with her or not on a particular topic or tactic, she's getting heard. In other words, she's being successful. She's playing the game that's supposed to be monopolized by the corporate voices of the Democratic Party. Reporters are supposed to stenograph whatever the White House says. We're supposed to accept that Presidential appointments are good by royal decree. We're supposed to accept that large Democratic Congressional majorities are weaker than tiny GOP majorities. We're supposed to express sympathy for certain Dems who experience a little hardball when those same Dems are precisely the ones who play the hardest hardball. Like Rahm Emanuel has never used the fuck word in a derogatory manner. Please.

I go into some meta background here because there's a whole generation of us trying to figure out how we plug in, how best to realize change. You see, we don't just 'believe' in change, that's actually too weak and limited a word. We expect the world to change. We're not going to do stuff just because we're told to do stuff (in fact, that's a good way to make many of us not do what is desired). The status quo is not acceptable; business as usual is not acceptable. And we're not afraid to point out ideas that are different; that's what change is. It's different. Deal with it. That's not a threat or a belief or a feeling. It's a statement, an observation, a reflection of reality. Unsustainable things have a way of stopping, eventually.

Of course, we're not unique in this insight; we didn't invent anything here. Personally, I'd argue we're simply another group of Americans in a long line of Americans who refuse to be divided by the divisions of the past. We don't live in a left/right country. It's not that Fox News isn't Fair and Balanced; there's no such thing as fair and balanced. That's an invention of movement conservatism and corporatism that has infected much of our institutional society. We are a diverse society, with a plurality of opinions, and what binds us together are concepts like the rule of law (equality) and majority tyranny (democracy), not a tribal identity of us and them, the self and the other, Democrat and Republican.

Corporate governance has been a huge problem in our country. It basically boils down to two words, transparency and accountability. Rahm Emanuel was a Member of the Board of Directors of FHLMC (Freddie Mac) during a time period where Freddie Mac engaged in a massive accounting fraud, purposefully misstating earnings smack dab in the middle of the housing bubble (talk about unsustainable things ending). In the past year and a half, enormous taxpayer credit lines (which are basically loan guarantees) have been extended, the Office of Federal Housing Enterprise Oversight has been moved, and transparency and accountability have been pretty much non-existent across the whole financial realm of the big players, from the GSEs (government sponsored enterprises, bailed out by the taxpayers) to the TBTFs(too big to fails, bailed out by the taxpayers).

I'm not naive, and I'm not stupid. Everybody makes mistakes. Some people fuck people other than their spouse. Some people steal stuff. Some people kill people. Some people procrastinate or are irresponsible. Some people have an addiction, from substance abuse to gambling to name-something-that-can-consume-you. And we're all embarrassed when something goes wrong and would prefer that no one else ever know.

The GOP has chosen their path quite clearly. Their strategy is to prevent transparency and accountability, and it's worked pretty well for them, as even the most hardened GOP criminals and sex deviants largely roam free. So the question for us, is, do we take the same approach? When it's 'one of our guys', do we sweep the issue under the rug? Do we not make a scene? Do we try to kill it quietly?

Or, do we seek transparency and accountability? In short, in the words of the OFHEO report (PDF warning), do we ask Emanuel which of these describes his tenure as a Director?

The Board of Freddie Mac was aware of control weaknesses and other management issues that were root causes of many of the problems that led to the ongoing restatement of the financial reports of the Enterprise. The non-executive Directors either 1) did not recognize those “red flags” and make reasonable inquiries of management or 2) failed to take appropriate actions to address the issues raised by the “red flags”.

Assuming Emanuel wasn't a key instigator of the questionable practices, was he incompetent or negligent?

And more importantly for our political purposes, is that question worth investigating? You see, if Eliot Spitzer can be removed for seeing a prostitute, if John Edwards has his career ended for banging a staffer, if William Jefferson can be sentenced for 13 years for bribery from $90,000 in his freezer, if Don Siegelman can sit in jail when he's the victim, what do we do about questionable practices that

  1. are actually related to one's capacity to competently manage large numbers of people and resources, and
  1. involve huge sums of money, many more zeros than a few hundred thousand dollars in bribes

?

For me, this is where the reality-based community is really put to the test. For the record, I disagree with Hamsher's signing onto a letter that is basically Grover Norquist causing trouble. Norquist is one of the few people I believe we should never compromise with. He's out to get us, to overturn the American experiment and our concept of democracy, in a way that few corporatists on the right are out to accomplish. Lewison captured much of my thoughts along those lines on his front-page post.

But it and other efforts along the same line weren't complete. I wanted to add a 'but' (actually, several buts). They picked the low-hanging fruit, working with Norquist, without really addressing the thornier question, which is, at what point do we sacrifice our principles because 'our guy' was the one doing the misgoverning? And a separate question, specific to Rahm Emanuel, is he 'our guy'?

Nate Silver can talk about conspiracy theories until the cows come home. Conspiracy is an odd word, loved by fringe radicals and boring suits; conspiracy is a common charge in the courtroom. It's so common that it's really pretty comical when people try to blow off or discredit an idea by calling it a conspiracy. Conspiracies are at the heart of many criminal affairs. Telling a prosecutor he can't use conspiracy is like telling a soldier he can't fire his weapon. It doesn't make sense and severely alters whole other methods of conduct.

Also, some people have been concerned about feeding into the right-wing campaign to make the whole economy of the past couple decades the fault of over-lending to poor black people. It's an interesting political argument. When our own leadership pushes hard to avoid transparency and accountability, that certainly creates a vacuum for those kinds of conspiracies (there's that word again). But I would turn that on its head. What allows the narrative to develop is the kernel of truth that Fannie and Freddie are one part of the history of the problem, but we haven't offered a forensic investigation of what went wrong, whose fault it was, and how things will be different next time. It is the absence of truth that allows right-wing memes to germinate, not cooperating with right-wingers on specific forays. Over-lending, over-indebtedness, the replacement of wages with credit, is at the heart of the problem. The part that's not true is only the last bit, blaming that on poor minorities. And most Americans are completely unfooled. Everybody on Main Street knows the problems lie in corporate Board rooms on Wall Street and their enablers in Washington.

We have a very simple way to refute the right-wing talking point that the GSEs are a key part of the problem. Stop bailing them out. Stop taking the side of the financial oligarchs on Wall Street and start taking the side of average citizens on Main Street. Act like we don't believe in supply side economics, in trickle down theory. Act like what we really believe is that wealth trickles up. That is, uh, what we believe, right? We've been ridiculing supply side economics for the whole Reagan-Bush era, right?

One other main critique along the political line that's been made is that it's a distraction for the White House; the last thing they need is another witch hunt (ie, another Starr Report). This assumes a very important fact, namely, that Attorney General Holder would actually take this request seriously. While we've got our realist hats on, while we're playing crass politics, let me share something.

We haven't investigated war criminals from the Bush Administration. I'm talking people who ordered the most illegal, most inhumane, most unconstitutional treatment of other people you can imagine, from extended psychological torture to being raped in the ass. These criminals are still walking around.

Do you think there's the slightest chance that the Attorney General is going to go appoint some special prosecutor to look into corporate criminals? Hamsher isn't going to cause another Starr investigation. In fact, if this movement at FDL was able to force the Attorney General's hand, I would change my mind and support her cooperation with Norquist. That would be the biggest victory of populists over the Establishment since the House of Representatives voted down EESA (TARP) last fall. I would suggest that'd be a sacrifice worth making, in pure, crass, political terms. That would do more for corporate governance everywhere than anything else that's happened since the 'crisis' began two and a half years ago. In short, you can't blame Hamsher for causing a scene unless you're ascribing to her the power to really make a scene. If that's the case, then you get people like me jumping on the bandwagon at the margins saying hey, I don't know what change looks like, the future may be uncertain, but let's take a risk. Every once in a while, it's worth rocking the boat.

I hope this is a useful exercise to go through. I see the politics of giving powerful Democrats a free pass, and I'm not entirely opposed to it; in that sense, I am immensely pragmatic. I'm willing to compromise pretty much any ideal in the furtherance of some other ideal. What I urge is for that to be a conscious decision that can be applied as a universal principle, not a knee-jerk reaction that is applied haphazardly, that considers the important factoid in this particular instance that corporate (mis)governance is one of the foundational challenges we have to address if we ever want to reclaim a healthy and wealthy democracy.

In short, does it matter whether the President's Chief of Staff was a good Director or a bad one?

Crossposted at The Seminal at FDL.

Originally posted to washunate on Tue Dec 29, 2009 at 03:12 PM PST.

Poll

Emanuel's conduct as a Member of the Board of Directors

67%59 votes
14%13 votes
17%15 votes

| 87 votes | Vote | Results

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Comment Preferences

  •  corporate governance is a tricky thing (11+ / 0-)

    Transparency and accountability sound all nice and warm and fuzzy and everything.

    Until it comes time to actually be forthright. And then all of a sudden it becomes remarkably difficult.

  •  her alliance is a poor choice but her underlying (6+ / 0-)

    motives are the right ones ... that this president allows himself to require defense from people like FDL or the ACLU is more the issue

    •  What? (0+ / 0-)

      that this president allows himself to require defense from people like FDL or the ACLU is more the issue

      I dont understand that... at all. Can you explain?

      Should a "progressive" Dem blog dwell in the safe zones of a tame party, or should it drive a tame party to break out?

      by NYCee on Tue Dec 29, 2009 at 06:29:44 PM PST

      [ Parent ]

  •  Rahm was a non-executive member (12+ / 0-)

    which means he wasn't even an employee of the company and he wouldn't have benefited in any way from what went on.  His duties were limited to oversight and strategy planning for the company.  At worst he was negligent in his duties.  But when it comes to Rahm's role in this affair, it is not that big of a deal.  Hamsher is just looking for anything (no matter how stupid) to make Rahm and by extension Obama look bad, and it is getting really tiring.

    •  Actually he did stand to benefit (10+ / 0-)

      He had a chunk of stock in the company.

      Apart from that, you're accurate.

      His role was already investigated. They already found that board oversight was practically non-existent, and that a major part of the reason for that was that none of the political appointees to the board ever did anything. So, Rahm was one of a long line of gravytrainers putting wads of cash in his pocket and doing nothing to earn it. That's far from admirable behavior, but it's not what Hamsher wants people to believe.

      It's possible Hamsher believes there was actionable wrongdoing, but if so, it's only because of her own prejudices, and it's not relevant to her course of action. This is a witch-hunt, plain and simple. It has nothing to do with ethics. It has everything to do with destroying Obama, and along with him any Democrat who doesn't think exactly like she does. She's a destructive force.

      In America, 60% of bankruptcies are because of medical bills, and 80% of those people had health insurance

      by sullivanst on Tue Dec 29, 2009 at 03:35:09 PM PST

      [ Parent ]

      •  Here's your answer, diarist. (1+ / 0-)
        Recommended by:
        Blogvirgin

        FWIW, you should be giving props to Bush for ending the executive pick gravy train.

        Maybe you can sign a joint letter with him, too.

        Revolutionary Road was an awful, awful film.

        by burrow owl on Tue Dec 29, 2009 at 04:03:50 PM PST

        [ Parent ]

        •  Weird isn't it? (0+ / 0-)

          Totally out of character. Just about the only opportunity for rampant cronyism he ever passed up. Maybe he'd simply run out of cronies.

          In America, 60% of bankruptcies are because of medical bills, and 80% of those people had health insurance

          by sullivanst on Wed Dec 30, 2009 at 08:10:04 AM PST

          [ Parent ]

      •  Freddie stock is worthless (0+ / 0-)

        the shareholders of Fannie and Freddie got wiped out.

        They already found that board oversight was practically non-existent, and that a major part of the reason for that was that none of the political appointees to the board ever did anything.

        That's called hyperbole.  The SEC investigation never said that board supervision was practically non-existent or even implied that.  You are making this up.

         

        •  WTF? (0+ / 0-)

          You're using today's Freddie stock price to discuss actions which took place in 2000/1?

          Do you have any idea how imbecilic that is?

          It doesn't even matter what the price is, anyway. He got a fixed value of stock, and his profit was determined by the relative rise or fall of the price, not the absolute value. Nevertheless, the value of Freddie shares peaked at $69 in late December 2000 - when Rahm was on the board.

          As to the OFHEO report from 2003, here's what it actually said:

          The preoccupation of management with adhering to the expense limits resulted in an insufficient allocation of resources—both dollars and staffing—to divisions responsible for accounting, financial reporting, and internal controls. The lack of attention by senior management and the Board of Directors to those functions resulted in transactions not being recorded in financial statements in accordance with GAAP. Finally, senior management and the Board failed to establish and maintain adequate internal control systems.

          Management and the Board failed to meet their responsibilities for adopting sound accounting policies and establishing and maintaining a strong internal control system to assure that financial statements were prepared in accordance with GAAP.

          Freddie Mac executives, without objection from the non-executive members of the Board or its Audit Committee, accepted a convenient and mechanical but inadequate definition of materiality accepted by the external auditor in order to exempt from scrutiny and specific disclosure as "immaterial" accounting errors of up to five percent of profits, or $100 million to $285 million.

          For the most part, the same long-tenured shareholder-elected Directors oversaw the same CEO, COO, and General Counsel of Freddie Mac from 1990 to 2003. The non-executive Directors allowed the past performance of those officers to color their oversight. Directors should have asked more questions, pressed harder for resolution of issues, and not automatically accepted the rationale of management for the length of time needed to address identified weaknesses and problems. The oversight exercised by the Board might have been more vigorous if there had been a regular turnover of shareholder-elected Directors or if Directors had not expected to continue to serve on the Board until the mandatory retirement age. Conversely, the terms of the presidentially appointed Directors are far too short, averaging just over 14 months, for them to play a meaningful role on the Board. The position is an anachronism that should be repealed so shareholders can elect all Directors.

          The Board of Directors was apprised of control weaknesses, the efforts of management to shift income into future periods and other issues that led to the restatement, but *did not recognize red flags, failed to make reasonable inquiries of
          management, or otherwise failed in its duty* to follow up on matters brought to its attention.

          I'm not making anything up. It's impossible to read that report without reaching the conclusion that board oversight was severely deficient. And they specifically single out the Presidential appointments as part of the problem.

          In America, 60% of bankruptcies are because of medical bills, and 80% of those people had health insurance

          by sullivanst on Wed Dec 30, 2009 at 08:06:07 AM PST

          [ Parent ]

    •  non-executive is what I quoted (3+ / 0-)
      Recommended by:
      slinkerwink, nextstep, thethinveil

      Rahm was a non-executive member

      right, that's why I quoted one section talking specifically about non-executive board members

      which means he wasn't even an employee of the company

      In the hierarchy of things, Directors are responsible for employees, not the other way around. I really have no idea what you're talking about. Are you purposefully distorting the supreme role of the Board, or are you honestly ignorant of what a Board is supposed to do? It's the governing body of the whole organization.

      he wouldn't have benefited in any way from what went on

      You mean, other than the general laxness of a financial system based on fraud?

      His duties were limited to oversight and strategy planning for the company.

      Limited? Oversight and strategy?

      At worst he was negligent in his duties.

      Um, do you realize what you just said?

      But when it comes to Rahm's role in this affair, it is not that big of a deal.  Hamsher is just looking for anything (no matter how stupid) to make Rahm and by extension Obama look bad, and it is getting really tiring.

      Right, this is where it becomes a political question. Does it matter?

      •  You are trying to imply intent to take advantage (0+ / 0-)

        of the system; I don't see that here at all.  Negligence means there is no intent.

        •  I'm sorry, I don't follow (6+ / 0-)

          Negligence is the inaction of a responsible party. I don't think Emanuel's intent was to ruin our financial system. Rather, I think that's an unintended consequence of a whole generation of corporate Board members each going along to get along, letting things slide, ignoring warnings, avoiding asking questions, and so forth.

          This is the opposite of, say, Lay and Skilling at Enron. Roles like Emanuel served at Freddie Mac are supposed to be the people in our system who catch the schemes cooked up by the Lays and Skillings of the world. The failure of a wide swath of corporate boards to actually realize oversight and strategic planning is a big part of the story of where we're at today.

          •  You seem to have the answer (and it's the right (4+ / 0-)
            Recommended by:
            VClib, sullivanst, washunate, littlebird33

            one), so what the hell else do you want to know?  If Hamsher had said that rather than claiming that he may be the 20th hijacker but we won't know unless he proves otherwise, then she would've acted reasonably.

            Instead, she did her predictably moronic step too far.

            Revolutionary Road was an awful, awful film.

            by burrow owl on Tue Dec 29, 2009 at 04:08:56 PM PST

            [ Parent ]

          •  What? (3+ / 0-)
            Recommended by:
            Christin, burrow owl, littlebird33

            You think Fannie and Freddie ruined our financial system?  By law they cannot engage in subprime lending, and they accounted for only 25% of the sub prime securities market.  That is just a GOP talking point.

            Rahm did not take his role on the board seriously, that is unfortunate and certainly not something to brag about, but he is not this devious little troll you and Hamsher make him out to be.

            •  one agreement, one disagreement (1+ / 0-)
              Recommended by:
              denise b

              First, where we agree.

              Rahm did not take his role on the board seriously

              Second, where I would dissent a little.

              You think Fannie and Freddie ruined our financial system?  By law they cannot engage in subprime lending, and they accounted for only 25% of the sub prime securities market.  That is just a GOP talking point.

              For a long time, Freddie/Fannie/Ginnie/FHFA were exemplars of responsible lending, an example of how government could kick-start a win-win situation between lenders and borrowers. However, more recently, they are absolutely part of the problem. There is no such thing as a private mortgage market any more. The housing industry in our country would literally collapse if taxpayers didn't plug the holes at the margins, if loans weren't backed by the FHA, if FHA required 20% down payment (or even 10%), if FHA was lowering rather than raising the maximum size of a loan they would guarantee, and so forth. That's why a company owned by shareholders became backed by a few billion taxpayer dollars and then a few more and a few more to where now we have massive liability. This is a backdoor bailout of the whole financial system, too. All Fannie and Freddie have to do is buy up mortgages from the big financial firms at inflated prices.

              Voila, private losses socialized via transfer to a Treasury-backed entity. At the heart of this are men like Rahm Emanuel. Not just Emanuel. And he didn't invent the problem, or the solutions we've tried so far. No, it's larger than any one man. Emanuel is just one of the players.

              And it's precisely because of his role as Chief of Staff to the President of the United States that he is a player whose conduct should be analyzed.

              Now, the alternative is to say the Freddie et al don't bear any responsibility for our situation, and that the conduct of its leaders isn't relevant. That could be true. But it sure begs the question, if they were responsible organizations, why do they need taxpayer handouts on the order of hundreds of billions of dollars?

              •  I don't think they're buying loans (0+ / 0-)
                from big banks at inflated prices.  

                Can you evidence that claim?

                (FWIW, I went through their most recent SEC filings pretty carefully last night, so you can get pretty technical and I'll follow)

                Revolutionary Road was an awful, awful film.

                by burrow owl on Tue Dec 29, 2009 at 04:55:25 PM PST

                [ Parent ]

                •  that's a worst-case scenario (0+ / 0-)

                  from big banks at inflated prices

                  As is, they have what, about half of all the mortgages in the country? I have decidedly not read through their SEC filings. Rather, I'm working backwards from why they need such a large slush fund from the Treasury. Even if they have massive defaults and lose a significant percentage on each default, there's no way Freddie and Fannie should get close to $400 billion in losses, let alone more, unless there was something else that was happening.

                  Incompetence and negligence can lose money, but it takes purposeful planning to lose enormous sums of money.

                  •  Your assumptions about Freddie Mac (1+ / 0-)
                    Recommended by:
                    Romo2Austin

                    are really off base.

                    I have decidedly not read through their SEC filings. Rather, I'm working backwards from why they need such a large slush fund from the Treasury.

                    Referring to the government support for Freddie Mac as a slush fund is part of the Hamsher narrative which has little to do with reality.

                    Of the $400B commitment by the Treasury (for both Fannie and Freddie) approximately $125B is outstanding.  The Treasury does not anticipate that it will need $400B to support these two GSEs.  The cap was lifted so that private sector investors are more likely to buy Fannie and Freddie debt.  If you understand the bond market, you know that Fannie and Freddie debt does not have the 'full faith and credit' clause.  By lifting the cap more investors are likely to buy Fannie and Freddie debt thereby lowering the ultimate cost to the Treasury.

                    Allowing either Fannie or Freddie to default was never really an option.  These are GSEs.  A default by either Fannie or Freddie would have been viewed in the financial markets as the functional equivalent of a default of a US Treasury bond.  The dollar would have instantly been devalued overnight if either had defaulted and the chaos in the market would have been far worse than what it was.  If you think Fannie and Freddie should have been allowed to default and go into bankruptcy ... then you also are implicitly in favor of much higher unemployment because that is exactly what would have happened.  The government had no choice but to support Fannie and Freddie.  What do you think Government Sponsored Entities means?

                    As for why Freddie needs cash to support its operation ... there are three main cash drains:

                    1. They have about a trillion dollars in investments and mortgages.  Obviously a materially significant amount of these assets have defaulted and have quit paying.  The cash inflow has stopped but the debt to purchase these assets remains as does the debt service (or cash outflow).
                    1. In addition to holding a large amount of mortgages, Freddie also guarantees a large amount of mortgages.  When these mortgages default, Freddie has to buy back the mortgage.  That takes cash.
                    1. Freddie is still in business and continues to purchase qualifying mortgages (hopefully with more stringent underwriting standards).  Without Fannie and Freddie in business the shaky mortgage market would collapse.

                    If you want to parrot the disgusting Hamsher-Norquist narrative and call this a slush fund ... have at it.

                    One other thing.  Fannie and Freddie are funding the HAMP mortgage modification programs.  Is that a good thing or a bad thing?  I know Grover Norquist would call the government mortgage modification program a bad thing so I suppose Jane Hamsher would as well.  And if Jane Hamsher thinks so, I suspect you think so as well.  Or would you like to go against your patron and go on record as supporting the HAMP program?

                    The last place I would to go for information about Fannie and Freddie is FDL or anyone associated with FDL.

                    •  what? slush fund is my language (0+ / 0-)

                      Referring to the government support for Freddie Mac as a slush fund is part of the Hamsher narrative which has little to do with reality.

                      I've been pissed off about corporate bailouts since before I ever heard of FDL. I would argue slush fund is a pretty accurate layman's description. In fact, I'm a little suspicious about why you have a problem with that kind of language. Did I hit a nerve? Explain something a little too clearly?

                      Anyway, on to the details...

                      Of the $400B commitment by the Treasury (for both Fannie and Freddie) approximately $125B is outstanding.  The Treasury does not anticipate that it will need $400B to support these two GSEs.  The cap was lifted so that private sector investors are more likely to buy Fannie and Freddie debt.  If you understand the bond market, you know that Fannie and Freddie debt does not have the 'full faith and credit' clause.  By lifting the cap more investors are likely to buy Fannie and Freddie debt thereby lowering the ultimate cost to the Treasury.

                      I'm sorry, I don't know what this paragraph means. The GSEs don't need taxpayer money so we're allowing them access to taxpayer money? They are privately held corporations not backed by the government so we're going to back them by the government so private investors feel comfortable buying their debt and equity? I don't need to worry because they've 'only' tapped $125 billion? The slush fund is limitless not because they're going to use it, just to make private investors comfortable that they could use it, but they won't, but they could, but they won't, but they could...

                      Allowing either Fannie or Freddie to default was never really an option.  These are GSEs.  A default by either Fannie or Freddie would have been viewed in the financial markets as the functional equivalent of a default of a US Treasury bond.  The dollar would have instantly been devalued overnight if either had defaulted and the chaos in the market would have been far worse than what it was.  If you think Fannie and Freddie should have been allowed to default and go into bankruptcy ... then you also are implicitly in favor of much higher unemployment because that is exactly what would have happened.  The government had no choice but to support Fannie and Freddie.  What do you think Government Sponsored Entities means?

                      Again, I don't understand what this means. How can a shareholder-owned entity never even have the option of bankruptcy? You just stated they don't have the backing of the government. So now, you claim financial markets find their debt equivalent to the debt of the government. Which is it? This is the inherent contradiction of implicit guarantees. It's either backed by the government, or not. If it's backed by the government, it should be nationalized, run by the government. If it's not backed by the government, that's what bankruptcy codes are for.

                      As for the claim that massive unemployment would result if we didn't open the spiggots for a failed management crew, I'm sorry, but I just laugh. I've heard these talking points for so long that I just don't know what they mean. Do people really believe this stuff? We have to net out the debts in our financial system, we have to deal with the massive liabilities. There aren't enough assets to offset the losses. They have to be written off. Eventually, it will happen. Let's control how it happens, rather than letting its eventuality control us.

                      Or to say it differently, for $125 billion, we could pay 1 million workers $60,000 a year for two years to do something. Or we could provide $20,000 a year for two years in unemployment compensation to 3 million people out of work.

                      They have about a trillion dollars in investments and mortgages.  Obviously a materially significant amount of these assets have defaulted and have quit paying.  The cash inflow has stopped but the debt to purchase these assets remains as does the debt service (or cash outflow).

                      Um, explain to me why an entity would continue paying cash out when its cash coming in stops? You renegotiate debt. Then after that, if you're still insolvent, you default on debt. Then, you either work things through in bankruptcy, or you wind down operations entirely. This isn't rocket science. And for large bankruptcies, it takes years to wind things down. Enron is still working through things.

                      Basically, what you're saying is that taxpayers have to bail out the investors in the financial industry to whom Fannie/Freddie/et al owe money. Well, gee, that's nice. Who's going to bail out the taxpayers? Why are they the ones stuck with the losses? I thought we're the party that opposes privatized gains and socialized losses?

                      In addition to holding a large amount of mortgages, Freddie also guarantees a large amount of mortgages.  When these mortgages default, Freddie has to buy back the mortgage.  That takes cash.

                      And golly, I thought Freddie's guarantees weren't backed by the full faith and credit of the United States government.

                      Freddie is still in business and continues to purchase qualifying mortgages (hopefully with more stringent underwriting standards).  Without Fannie and Freddie in business the shaky mortgage market would collapse.

                      This is the downright scary part. We haven't learned from the past decade. Things are worse today than ever. I agree with you to the extent that there's no such thing as a private mortgage market. The government is wholly responsible for house prices and volume not falling even further.

                      Where we disagree is that you think that's a good thing. I think it's a bad thing. Prices need to reach an equilibrium point. That means house prices need to go down and interest rates need to go up. Spending taxpayer dollars to replace this process is perfectly doable; it's what we're doing. Let's just not kid ourselves that there's a free lunch here.

                      If you want to parrot the disgusting Hamsher-Norquist narrative and call this a slush fund ... have at it.

                      lol...I'm actually parroting the disgusting concept that a market-based capitalist system involves failure as well as success, that it requires a clear delineation between the government and private actors, that the proper response to trouble are two important mechanisms: nationalization or bankruptcy.

                      One other thing.  Fannie and Freddie are funding the HAMP mortgage modification programs.  Is that a good thing or a bad thing?  I know Grover Norquist would call the government mortgage modification program a bad thing so I suppose Jane Hamsher would as well.  And if Jane Hamsher thinks so, I suspect you think so as well.  Or would you like to go against your patron and go on record as supporting the HAMP program?

                      I'm pretty sure I'm on record opposing HAMP. If not, let me get on record calling it an oversold distraction that won't fix any of our problems.

                      The last place I would to go for information about Fannie and Freddie is FDL or anyone associated with FDL.

                      Actually, here I kind of agree with you. I don't go to them for commentary on the financial/economic catastrophe/crisis/whatever. People like Simon Johnson, Dean Baker, Robert Kuttner, Yves Smith, and so forth are more up my alley in terms of people who seem to generally write about the world the way I see it.

          •  So if a 'generation of board members' were (1+ / 0-)
            Recommended by:
            Norm DePlume

            negligent, why is it that you and Jane of the Black-faced Lieberman, single out the one who happens to be Chief of Staff to the President of the United States of America?

            God has no religion. - Gandhi

            by OIL GUY on Tue Dec 29, 2009 at 05:08:19 PM PST

            [ Parent ]

            •  well, if we take this question seriously (3+ / 0-)
              Recommended by:
              raatz, ganymeade, denise b

              I'd answer in three ways.

              Uh, first, you apparently missed the fact that I disagree with this particular effort Hamsher has done.

              Second, many of us have been talking about corporate governance since before the Age of Obama. For me, it's somewhat personal. Governance is pretty much why I went to business school instead of, say, getting my teaching certificate.

              Third, Rahm Emanuel has a history with which some of us disagree. Some of us believe his strategy and tactics have hurt the Democratic Party, rather than helping. And specifically now, as Chief of Staff, Emanuel has enormous influence on how we proceed, on what the Administration does, insofar as shining a light on past conduct and altering future conduct.

              •  Rahm is not my favorite Democrat either. (1+ / 0-)
                Recommended by:
                Norm DePlume

                I am about to reread your diary because I did think that you were supportive of Jane's attempt to aid the Republicans by calling for an investigation of Rahm.

                I'm sorry you chose business school - no one seems to come out better for the experience - not that I am stating this is true in your case. Maybe you learned wonderful things, but I know too many people who spent two years there and learned nothing (not even how to read a balance sheet), except that as a result they were entitled to at least a 6 figure salary and enormous bonuses.

                God has no religion. - Gandhi

                by OIL GUY on Tue Dec 29, 2009 at 06:47:51 PM PST

                [ Parent ]

          •  You need to make your case with evidence and you (0+ / 0-)

            have not done it. It is not enough to suggest that the Chicago Tribune wrote an article with nonspecific allegations. YOU here need to be specific.

            Here is the quite long 2003 Official report on the alleged misconduct at Freddie Mac.

            Looking at the section dealing with non executive Board members appointed by the President, starting at p.154, the report makes clear that Presidential appointees, including Emmanuel, were not in a good position to exercise a check or balance on the other non exectiveBoard members because of the short terms, averaging fourteen months, of their appointments, the necessity of coming up to speed or at least the speed of other directors about Freddie and the like. The report indicates a certain urgency on the part of long term board members that the appointees were treated equally, which urgency raises questions given the way the report is written as to whether the report writers believed them.

            The section on Non Executive Directors, beginning on p. 143, also makes clear that management of Freddie reduced the meetings to five a year, and then buried intentionally  the Board members in full agendas and great piles of paperwork, and carefully managed any presentations to the Board so as to control information which those non executive Board members could obtain, even by personal inquiry. Dry runs of meetings and presentations were held before meetings to make sure the executives could in an agreed fashion meet any inquiries on various subjects.

            It also makes clear that a substantial majority of the  non executive Board members were not only not Presidentially appointed, but had served for periods of ten years or more and expected to continue to do so until retirement.

            The cumulative principal charge against the Non Executive Directors in the 2003 report was that they were too willing to accept the representations of the executives and did not make more aggressive inquiries into what the actual accounting practices were and the degree to which they did or did not comply with legal and regulatory requirements. There was an accounting committee, but apparently Mr. Emmanuel did not sit on it, where there should have been much more careful review of accounting policies.

            The red flags cited in the Non Executive Board part of the report referred principally to personnel decisions as to Controller and other key accounting personnel, how they were to meet their accounting duties when substantial other tasks such as business generation were assigned to them, and how they were to be replaced and their duties performed, after the incumbents resigned.

            According to the SEC press release in 2007, for which there is a link in the Chicago Trib report itself linked above in a prior post (this entire comment vanishes and has to be begun anew whenever I try to link it directly), those charged as to Freddie were all executives, and the charges made against them principally included the use of various accounting policies intended to smooth the earnings curve of Freddie, to make that curve even and reliable, and these included taking excessive reserves beyond what the provable losses were, and using techniquies to nullify transitional provisions of accounting rules. According to the SEC, these practices began in 1998,  before Mr. Emmanuel joined the Board, and continued at least until 2002, apparently after he left. The 2003 report suggests fudging on how to report certain derivatives and that part of the problem was that the unnullified adjustments would have shown that more money was made in 1999 than in 2000. No directors were included in the SEC final resolution process, which generated a fund from which investors were to be made whole.

            Those who deal with Corporate boards frequently see charges that board members should have been more aggressive than they were under whatever circumstances have arisen where Board member's conduct is challenged. Any place. Any board. And also frequently see executive management manipulating the questions they permit to arise on such Boards. The most customary exception to this is where a control fight is in progress, and the party seeking to wrest control from the current management has one or more seats on the Board and is using that seat  and the right to inquire to challenge management. Not an issue here present.

            The urgent diary here suggests that in some manner Mr. Emmanuel specifically, not the other four political appointees or the long term elected non Executive Directors, was 'negligent' in handling his Board seat, without specifying in what that negligence constituted. Business organizations, and members of Boards are generally protected by the 'business judgement rule' which says that if they make a decision in good faith and act with the objectively reasonable competence of directors in doing so, they are protected in those judgements even if the judgements turn out to be wrong, ignorant, and foolish.

            Negligence is a standard which requires the Board member to have acted materially and provably below the  objectively reasonable standards of directors, in a matter not within the business judgement rule, but not wilfully or intentionally or recklessly. In order to claim Mr. Emmanuel was 'negligent,' you have to show that he did that, that he was in position to know what even the 2003 report says that the more experienced directors did not know, and to have known it despite the affirmative efforts of management to keep from the Board information or questions they did not want the Board to know about or do anything about, and then did not act on it. With him not sitting on the Audit or any other committee. Not any other director, presidentially appointed or not, him.

            That you have not done, diarist.

            Another factor to be taken into account is what was going on with Fannie and Freddie at this time. Prior to about 2000, they had been processing, packaging, guaranteeing and sending out mortgages called 'conforming' mortgages, which they purchased from Lenders who made those mortgages if the mortgages conformed to a group of rules about the manner of making those mortgages, such as down payments, verified income, appraised value and the like, a fairly conservative practice. They had about forty percent of the mortgage market in that year, the vast majority of their portfolio in conservative items. But they had a few of the Countrywide style mortgages and were under pressure to acquire more of them, by politicians and the market because politically there was pressure to make home mortgages more available at the beginning of the bubble, and because Wall Streeters were entering the market to compete for customers who would buy mortgage packages and were seeking to compete more directly with Fannie and Freddie, not least in the mortgages which did not qualify as 'conforming.' During this period at a specific date I do not have, that pressure resulted in a decision to purchase a certain dollar amount of the lower quality mortgages over a ten year period, and thereafter the purchases continued and increased in volume each year, in at least some part due to the unwllingness of lenders such as Countrywide to sell conforming mortgages to them unless they also bought the nonconforming mortgages. I have seen no suggestions anywhere that Mr. Emmaneul was part of the 'political' pressure to do any of this either.

            What this absence of documentation of the factual basis of the charge of 'negligence' against Mr. Emmanuel, despite the drumbeat for another investigation,  in effect a demand for an investigation because Mr. Emmanuel was somehow in the general neighborhood of nefarious doings begun before he got to Freddie, suggests is that some other factor led to the selection of this matter with which to challenge Mr. Emmanuel in particular, something more specific and particular than accepting a patronage appointment from what I believe was Mr. Clinton at the end of Clinton's term.

            •  I appreciate the detailed comment (0+ / 0-)

              I'm aware that negligence is a legal term with very specific meanings. In response to Romo2Austin, I'm not using that as a legal term. I'm using it colloquially, ie, the way we talk in our general discourse on things like internet message boards. Lord help us if we applied legal standards to all of our discourse.

              I'm not suggesting I have a criminal indictment. I thought I said this, but perhaps I should say this more clearly, that I think even the letter Norquist and Hamsher wrote isn't itself a criminal indictment; it's a request that our legal system effectively re-open an investigation. Here's where my personal opinion jumps in: I don't think this is a legal letter; I think it's a political letter. Based on your last paragraph, I think we agree on this matter. Were Rahm Emanuel just another retired multimillionaire finance guy on the beach in the Bahamas, this wouldn't really be that much of an issue. But he's not; he's an integral part in ongoing, contemporary Administration policies to protect the sins of the past and bail out future ones.

              Here's how I would describe the situation. We have documentary factual evidence that serious, material fraud on the order of billions of dollars of misstated earnings occurred. As I said, I assume Emanuel did not instigate any of the questionable practices. No, I don't have proof of that. It's a guess, which I would argue is reasonable, based on what we do know.

              Rather, here's a guy who made compensation of  something between $300,000 and $400,000 to do...what? That's why I phrase my question the way I do in the diary. My question is not, is Emanuel a criminal mastermind? Rather, my question is, was he a responsible Board Member? Is his conduct as a Director relevant? Not criminally speaking, but politically speaking? Many Americans spend years making that kind of money. What was he supposed to do? Is he a slacker? Is he incompetent? Is he negligent? Is he irresponsible? Is he so unfamiliar with finance, accounting, strategy, oversight, governance, etc, that he was trying to understand what was going on, but was honestly fooled? Not all of these explanations can be true.

              Do we care that he was 'asleep at the wheel'? Does it matter that he took a patronage job, pocketed the money, used his Freddie connections to help in his Congressional bid, and otherwise moved on with life? It's his indifference that intrigues me, not his Lex Lutherism. The systemic problem we have with corporate governance is that even Board members paid a hefty compensation package largely fail to exert meaningful oversight and rarely engage in meaningful strategic planning. Emanuel didn't create that problem. He's part of that problem.

              I think it's valuable to point that out. He hasn't apologized for being part of the problem. In fact, he seems to be on the side of those trying to continue the very system which has failed us so spectacularly. That, I would argue, makes it a relevant political issue.

              That's what I wish our efforts were focused on, the systemic issue of warm bodies pretending to be doing something, rather than the sensationalizing of the Norquist/Hamsher piece. However, as someone who's aware that corporate governance isn't as sexy as, say, Tiger Woods' girlfriends, you have to seize the opportunities that are presented. Clearly, people are interested in this topic at the moment.

              •  I have serious problems with that analysis. (1+ / 0-)
                Recommended by:
                Norm DePlume

                I do come at this as a lawyer, and care about the meaning of words which are plainly legal, such as 'negligence', one thrown around much too glibly in this matter.

                If one values the Rule of Law, that is, laws neutrally and consistently applied, not with a bias for or against a particular group, say, politicians with whom the writer disagrees for other reasons, very Bushly that is, it matters a great deal that this has been presented as an issue of legal negligence personal to Emmanuel, and not a political one, when the goal is admitted to be entirely political. If it is improper to do it to Don Siegelman, it is equally improper to do it to Emmanuel, no matter how much you don't have a separate political opinion of Siegelman other than the D after his name, and how much you loathe Emmanuel for things unrelated to this.

                To me, starting a political jihad on this issue and demanding that the already overburdened AG drop terror investigations, the AIG investigation, the Goldman Sachs betting against their customers investigation and other genuinely more urgent matters to devote resources to this plainly political witchhunt with a suspiciously thin or absent factual justification, is a misuse of the AG and the DoJ. Whose principal purpose is to facilitate an accusation that they are giving political shelter if they don't, without a showing that there is any merit to the claim or any justification for the diversion of resources that complying with your demand would produce.

                Even your demand for an apology from him for his being 'part of the problem' is a part of that. You have to know the answer or at least have a good, factually supported theory of an answer to your fourth paragraph issue which applies to him in particular, in order to make that demand. It's not enough to have the unsupported notion moved by politics that all board members are laxer than they should be, rely too much on the professional accountants as the 2003 report suggested these Board members did (and it was Arthur Andersen, before the Enron disaster destroyed it who was being relied upon) - one of the purposes of outside auditors is to ride herd on and disclose their concerns about bad internal practices, which didn't happen here. What shows the misplaced basis of your complaint is that you have not made the demand of any of the other politically appointed non executive Board members, or even named them, because its his ass you want for something or other, not theirs. If it were a systemic complaint as you suggest, that would not be the case.

                Your analysis trying to connect this board service in 2001 also fails to take into account intervening business decisions made by Freddie after that service which materially changed the way it did its business and the contribution of those decisions to the resulting disaster. What was the impetus at the beginning of the bubble for Freddie to expand the categories of loans it bought and packaged and was that legitimate or stupid or actionable, three different categories. What was the effect of the decision when the bubble got wobbly of politicians making Fannie and Freddie in fact buy the bad stuff to get it off private balance sheets, a much more nearly proximate cause of why they went down? Before you can connect a fourteen month board service in 2001 to that, you have to take that into account in the first place. Which you have not done either. Preferring to charge into the notion that something Emmanuel in particular did or did not do in 2001 as one member of a Board which you cannot or will not identify and the 2003 report didn't either, led directly to the meltdown in Freddie four years after the report.

                Finally, you make clear that now your problem is not with what Emmanuel did personally at all, but a larger systemic problem that Boards are not and were not before the bubble burst, and virtually never have been, the engines of strategic or even tactical policy at corporations. or the policemen of dubious tactics or strategies which executives choose for their own reasons to adopt. And should be, particularly for companies to which 20-20 hindsight is applied.

                At the same time that the statute of limitations is waved as a justification for this, I have not seen in any account from you or anyone else an assertion of what the relevant statute of limitation even is, to determine if this is a claim literally too old to act on, if there was anything you had presented to justify acting.In contrast to the terror issues, where one of the first things that popped out was that critical date as applied to the known facts.  

                You  and those making this charge seek to use Emmanuel and an attempt to destroy his career in politics and possibly the administration along with him, to make this rather abstract and general point. While lawyers are interested in such abstractions, the problem here is that you virtually concede that you are making it without evidence that there is any connection at all between whatever Emmanuel did or did not do in 2001, and what therafter occurred, no blood in the water whatever with his name on it. It would be a better point with that connection by specific act or omission to something in particular, as there was with the executives who were fried in the report and subsequently named and collected from by the SEC, if there were some grave or even identifiable error with his name written on it rather than what the 2003 report shows. This is Kos, and Kos has a bias for actual evidence which is not misplaced, although it has been misplaced and lost for the purposes of this particular campaign.

                It does look to me like your ideology of anti-corporatism driving that one. Your comments come close to saying that you thought that if there was a look, there might well be no 'there' there, but you want it done anyway, for other purposes. Perhaps your faction's need to demonstrate that they can destroy someone important to the administration if they don't get what they want.  That definitely is a wrongful abuse of any governmental power of investigation. Or for using this forum to insist on one.

                •  a couple comments in return (0+ / 0-)

                  I do come at this as a lawyer, and care about the meaning of words

                  Clever wording. I don't have a JD, therefore, I must not care about the meaning of words.

                  which are plainly legal

                  How am I throwing about legal words if I don't know legal words?

                  ...Okay, so, I could be very sarcastic in this response. No doubt you could, as well. The trick is figuring out if there's any common ground, or perhaps, assuming we generally agree, identifying where the source of our disagreement lies, why we disagree almost entirely on this particular point.

                  To me, starting a political jihad on this issue

                  I would suggest that the definition of 'this' might be the source of our disagreement. I think you are meaning this in the specific reference to whether or not Rahm Emanuel has legal liability for breaching a fiduciary duty (or some similar material failing) during his tenure on Freddie Mac's Board. My understanding is that you are presenting this as a unique, isolated event that can be analyzed without the need of much additional context.

                  I would define 'this issue' as being much larger. The issue isn't just Rahm Emanuel, and it's not just about what happened in 2000 and 2001.

                  The issue is about failures in corporate governance leading to the greatest catastrophe most Americans alive today have ever known. The issue is about a whole crop of political appointees who have been exacerbating the problems rather than solving them, about failing upward rather than replacing the status quo with fresh blood.

                  And smack dab in the middle of it, one of the key players, the guy explaining to Freddie how to leverage political contacts, is Rahm Emanuel.

                  because its his ass you want for something

                  Because he's standing between what many Americans want. I mean, rarely is the connection so direct as to have an actual former Board Member now being the Chief of Staff in an Administration that has extended unprecedented taxpayer support to the very organization in question, not to mention much broader support to the industry in which the organization operates. Rarely is the phrase revolving door so clearly personified as in the networks and wealth  of the former Clinton advisor, former private financial industry millionaire, former Representative, and current Obama Advisor.

                  already overburdened AG

                  This comment actually scares me tremendously. There has been massive criminal activity over the past decade. Absolutely massive. If the DOJ doesn't have the manpower to look into an organization as central as Freddie Mac, that is a national emergency. The President's Chief of Staff should be coordinating the Executive Branch and the Congress to figure out how to immediately make more investigative personnel available to go after fraud and related crimes. The President should be making speeches about this. We are paying hundreds of thousands of workers to carry weapons around Afghanistan and Iraq. We know the Chief of Staff values this because he's spent the first year of the Administration twisting Congressional arms to approve the biggest defense budget ever and emergency funding on top of that for GWOT/GSAVE/Long War/whatever-the-heck-it-is-now. It is negligence, or whatever word not copyrighted by the legal profession which has a similar meaning to the rest of us, to not push (at least) equally hard for equally (at least) as many workers to investigate and then deal with the problems in our major financial industry firms and practices.

                  Oh, and, um, we should probably not go around not-so-subtly trying to cut down inspector general capacities within, say, an area as critical as those dealing with housing entities (PDF Warning 1 and PDF Warning 2). Heck, there's a whole line of questioning just along the lines of how OFHEO was magically transferred to FHFA, but somehow, the powers of it weren't. But no one was bothering to do anything like, say, discuss with Senators who would be confirming an IG appointment what IG they might be willing to confirm. In fact, no one seems to have told the Senate that there is no IG. And gee, that sure helps the oversight team trying to be responsible for other areas, like EESA/TARP. Was Emanuel distraught when he learned a bill he co-sponsored as a Representative accidentally eliminated the Inspector General for Freddie, Fannie, et al? Or was that the point? Of course, Senator Dodd could be lying, too. Maybe the White House has been trying to get an IG, and it's Dodd and Schumer who are holding things up? All we can do is speculate, theorize, engage in conspiratorial thought exercises in the absence of investigating what actually is going on. That's how right-wing memes spread. It's the absence of transparency that causes people to fit facts together in patterns that are not accurate.

                  and possibly the administration along with him

                  It's really pretty funny that you think everybody who has this opinion is out to get the Administration. I know issues related to Freddie are huge right-wing CT. Five minutes with the Google and Free Republic will tell you more than you ever want to know. So, I can understand why your default position would be to suspect anything thrown at Emanuel must definitionally be, at least possibly, out to get the Administration.

                  But what if Emanuel is what is undermining the Administration? What if fighting FOIA requests, from torture to Freddie, is what is undermining the Administration? What if giving massive blank checks and executive compensation to Freddie in particular and the financial industry in general is what is undermining the Administration? What if the failure to investigate past abuses, the need to not look back, lest we see Emanuel and the hundreds of other ambitious, rich, mostly men like him is what is undermining the Administration?

                  The President has invoked Just War Theory to justify occupying foreign countries. I just ask for a little latitude to hold our corporate 'leaders' at least partially responsible for the millions of people losing their homes and jobs and the trillions of dollars in liabilities that taxpayers have been put on the hook for.

                  I really just have one question I want to ask of Administration officials, under oath, on this topic, anyway. Why do Fannie and Freddie have access to a massive credit line backed by the Treasury Department?

                  Obviously, neither of us have the time to go this detailed on everything. That's one of the problems. We don't have a detailed forensic accounting of the conduct of every major actor in the financial industry over the past decade plus, and average citizens simply don't have the tools or capacity to have anything resembling a sufficiently detailed narrative for anything. In short, no one is accountable, particularly when the Chief of Staff to the President of the United States is one of the figures pushing the Administration to be cozy with the status quo. A little sunshine will go a long way. In a country with a legal system that's trigger happy to investigate every poor black person who might have sold 10 grams of crack, to arrest every protestor who might yell so loud that powerful people might hear them three blocks away inside a concrete and steel building, it's remarkable that there's so much pushback against calls to investigate rich folks who happen to have taken actions which make it more difficult for folks investigating questionable activities to do their jobs.

          •  This is fundamentally untrue (0+ / 0-)

            Roles like Emanuel served at Freddie Mac are supposed to be the people in our system who catch the schemes cooked up by the Lays and Skillings of the world.

            Board of Directors are not the ones who catch accounting misstatements.  That is ridiculous.  The outside auditors are charged with that function.  In this case it was PWC (Price Waters Cooper).  Why didn't the Hamsher-Norquist letter say anything about PWC?

            And btw ... the problem at Freddie was not accounting fraud in the true sense of the word.  They were not found to be fabricating revenue or earnings.  They were found to be managing earnings; in one instance they actually understated earnings in order to carry it forward to have a predictable earnings.

            What Freddie was doing in 2000-2001 when Rahm was one of eighteen board members (for all of thirteen months) had nothing to do with funding non-creditworthy mortgages.  That didn't get underway until 2003.

            •  Sure, what Emanuel is doing now is (0+ / 0-)

              funding non-creditworthy mortgages

              ;)

              Board of Directors are not the ones who catch accounting misstatements.

              That's an interesting perspective. It's one of the reasons for significantly altering Boards as we know them. If a Board member can't even speak to the rough accuracy of the financial statements, why have Directors?

              What you are saying is that there is no check in our system on an effort between  executives and third parties to defraud shareholders, misstate earnings, etc. Freddie is a good case study, because its misstatements were for the explicit purpose of smoothing earnings so as to ensure bonuses for the executives doing the earnings smoothing. That touches upon not only a Board's involvement in the finances, but also a Board's involvement in executive compensation.

              In short, Emanuel has proven that the job he served is completely unnecessary. He added nothing of value, yet extracted hundreds of thousands of dollars in compensation.

              Now that's leadership.

    •  Board members have a fiduciary responsibilty (6+ / 0-)

      that does not depend on being employees.  Board members are typically not employees.  

      Here is a place to start reading if you want to know more.

  •  Rahm was less than a minor player (5+ / 0-)

    this scalp hunt is a last gasp diversion of a once proud website.

    Deoliver47 was right and deserves some apologies.

    by citizenx on Tue Dec 29, 2009 at 03:23:24 PM PST

    •  so Board Members are irrelevant? (6+ / 0-)

      That's certainly one approach to corporate governance. Get rid of the non-executive board members entirely. Eliminate the facade of oversight and strategic planning and just make the CEO formally responsible for everything.

      •  Have you ever been on a board? (4+ / 0-)
        Recommended by:
        Geekesque, Norm DePlume, Bonsai66, ETF

        Sat in on a board meeting?

        This is a political scalp hunt that is a pale imitation of Ken Starr and you know it and should be ashamed.

        You throw innuendo around as fact and have not offered one shred of evidence of wrong doing.

        Deoliver47 was right and deserves some apologies.

        by citizenx on Tue Dec 29, 2009 at 03:44:01 PM PST

        [ Parent ]

        •  yes to both of your questions, (2+ / 0-)
          Recommended by:
          raatz, washunate

          ...speaking for myself.

          This is a legitimate inquiry and attacking him doesn't lessen the well thought out way he wrote about it.

          •  It is not legitimate (6+ / 0-)

            show me one piece of evidence or show how you are going after any other board member besides Rahm.

            This is a witch hunt.

            Deoliver47 was right and deserves some apologies.

            by citizenx on Tue Dec 29, 2009 at 03:50:23 PM PST

            [ Parent ]

            •  Why are we witch hunting Rahm, and whats wrong (1+ / 0-)
              Recommended by:
              washunate

              with a witch hunt.

              People are doing that to Jane Hamsher right now.

              Jane never threatened Democrats, she never empowered or encouraged Joe Lieberman.
              There is a hunt out for Rahm because we are scared to death of losing in 2010, and he is standing square in the way.
              Im sure that Hillary supporters would in retrospect wish they had witchhunted Mark Penn out of the businesses before he sank her campaign.

              Will you except that Rahm has and always will be a divisive and destructive figure in the Democratic party.

              All I can say is if Rahm does care about our party and president and controlling majorities, he better be whipping up a Budget reconciliation that includes a robust public option that is available quickly.

              Smile, the decade of Bush and Rahm's last year in politics is almost over.

              by George Pirpiris on Tue Dec 29, 2009 at 03:59:10 PM PST

              [ Parent ]

            •  If you have to join up with... (4+ / 0-)
              Recommended by:
              citizenx, Geekesque, beltane, ETF

              Grover "White Supremacist" Norquist in order to stage a witch hunt, then you can be sure that it is truly a 'witch hunt,' and nothing more.

              This is merely Jane's way of throwing a fit.

              "See if you can guess what I am now?" -John "Bluto" Blutarsky

              by Bonsai66 on Tue Dec 29, 2009 at 04:00:23 PM PST

              [ Parent ]

              •  Throwing a fit? (0+ / 0-)

                God save me for saying the M word, so I wont say it.

                Second, what fit, Rahm Emanuel is WIDELY hated accross the Democratic party.

                He is all of a sudden the hero of FDL lovers everywhere, which as a hater of all things netroots, Rahm is delighted to see the people he hates, turn around and defend him.

                Trust me Bonsai, Rahm hates you as much as he hates Jane, Dean and Kos.

                Smile, the decade of Bush and Rahm's last year in politics is almost over.

                by George Pirpiris on Tue Dec 29, 2009 at 04:33:50 PM PST

                [ Parent ]

                •  Trust you? (0+ / 0-)

                  To know that Rahm hates me, personally?

                  You know their minds so well, that we don't even need to be communicating in writing. You should just be able to beam your thoughts directly into my head via telepathy, right?

                  Sorry.  You don't really know shit about what goes on in their heads.  Jane's, Rahm's...anyone's except your own, really.

                  This certitude that the FDLers express is quite cultish, honestly.

                  Y'all seem to know everyone's minds and motives.  God bless you all for carrying the burden of omnipotence.

                  "See if you can guess what I am now?" -John "Bluto" Blutarsky

                  by Bonsai66 on Tue Dec 29, 2009 at 04:59:23 PM PST

                  [ Parent ]

                  •  If you don't know how Rahm feels about any (0+ / 0-)

                    Democrat that dares to use the internet for politics, then you are naive.
                    Really naive.

                    And I am not an Fdl'er,  I support them as I support all progressive activists.

                    Honestly I draw the line at activists who are all talk and show.  You got to do something.

                    Rahm Emanuel has done nothing in his career to expand or strengthen the base.

                    How do you feel about his smearing of Greg Craig, or working as hard as he could to kill the public option?

                    Smile, the decade of Bush and Rahm's last year in politics is almost over.

                    by George Pirpiris on Tue Dec 29, 2009 at 05:08:30 PM PST

                    [ Parent ]

                    •  Well, Jane accomplished nothing during (0+ / 0-)

                      the HCR debate, except to precipitate an internecine war here.

                      She talked and showed, but ended up giving us exactly nothing.

                      Next time, my money is going to advocacy groups that can show some kind of track record.

                      So far, in the HCR debate, Jane is batting 0.000

                      We can back better horses next time, and maybe we'll get a better result from the legislation.

                      "See if you can guess what I am now?" -John "Bluto" Blutarsky

                      by Bonsai66 on Tue Dec 29, 2009 at 05:13:24 PM PST

                      [ Parent ]

                      •  Ok list some groups you would support (0+ / 0-)

                        And if you beleive what you wrote, then you are so terribly naive it hurts.

                        You think the world revolves around this site?

                        You obviously know nothing about health care.

                        And if Jane did so bad, who did better?

                        Why do you guys hate her so much, is it something about being a strong female progressive?

                        Because as far as I see, HCAN did nothing except run ads when it was way too late.

                        And their is PCCC which is also a lovely group but if you think Jane had a 0.000 then they do to.

                        Which if you beleive that, I would move on from progressive politics and do something usefull with your life.

                        Smile, the decade of Bush and Rahm's last year in politics is almost over.

                        by George Pirpiris on Tue Dec 29, 2009 at 05:20:12 PM PST

                        [ Parent ]

                        •  I base my assessments on results. (0+ / 0-)

                          Care to share any of Jane's with us?

                          I just don't know why y'all idolize her.  She accomplished exactly nothing.

                          I do know this, however: the Janebots will keep marching along to the beat of their nihilistic drummer.  That probably won't change.

                          Good luck with that approach in the real world.

                          "See if you can guess what I am now?" -John "Bluto" Blutarsky

                          by Bonsai66 on Tue Dec 29, 2009 at 05:57:43 PM PST

                          [ Parent ]

            •  Using the trusty Google (1+ / 0-)
              Recommended by:
              washunate

              will take you to this lengthy piece in the Chicago Tribune.  Go read and then tell me there is nothing there.  The other board members are not Obama's CoS, btw.

        •  why is that relevant? (1+ / 0-)
          Recommended by:
          flubber

          You know I'm young, so you're hoping I can be bluffed out of this position?

          The answer to your question, by the way, is of course I've been on Boards. I serve as a non-exective member right now, in fact. And part of my day job is supporting the Board of my employer. But that's not relevant. This isn't an area that requires personal experience to speak authoritatively.

          I'm kind of curious why you think that's important? Is there language in the OFHEO report, for example, that I can't understand if I haven't been a Director?

          •  I have no idea of you age and do not care (0+ / 0-)

            Since you have served on a board you must realize what a crock this baseless charge is.

            I'll ask one more time, where is your ev idence?

            Deoliver47 was right and deserves some apologies.

            by citizenx on Tue Dec 29, 2009 at 03:52:02 PM PST

            [ Parent ]

            •  I'm sorry, but I'm cracking up (1+ / 0-)
              Recommended by:
              NYCee

              A company has to massively restate earnings. It's baseless to ask the Directors of that company what happened?

              I have to have evidence of detailed specificity before I can pose the question what happened to one of the Directors who is now the Chief of Staff to the President of the United States who has extended massive taxpayer backing to cover up the failures of management not just at the one organization but to a whole industry?

              I mean, this isn't a criminal indictment from Hamsher. It's a request of our legal system to investigate what happened, what continues to happen, in the financial sector as it applies in particular to one Freddie Mac Board Member who just happens to occupy one of the most powerful political positions in the country in an Administration that just happens to hold the entire fate of the financial industry in its hands.

              The question as I see it is whether Emanuel's conduct is relevant. This isn't a diary describing in excruciating detail what that conduct was. It's only worth investigating even further if the nature of the conduct is relevant. If all of our opinions of Emanuel would be unchanged regardless of what he did as a Board member, then it doesn't matter what happened.

              I'm just not sure how to constructively deal with your question. Are you saying the OFHEO report is accurate, but it doesn't apply to Emanuel? Are you saying the OFHEO report is inaccurate? Are you saying it's accurate but irrelevant? Are you saying serving 13 months on a corporate Board in between stints with the White House and running for Congress is too short, his heart wasn't in it, it doesn't matter?

              Let's go back to a time Before FDL Made This an Issue and quote from an ABC News story. Read the whole thing, or here's a snippet.

              President-elect Barack Obama's newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot "red flags," according to government reports reviewed by ABCNews.com.

              •  We know what happened, though. (2+ / 0-)
                Recommended by:
                citizenx, ETF

                There's even a detailed report of what happened.

                Maybe you should try reading it.

                Revolutionary Road was an awful, awful film.

                by burrow owl on Tue Dec 29, 2009 at 04:19:22 PM PST

                [ Parent ]

                •  so you acknowledge Emanuel was negligent (0+ / 0-)

                  you just don't care?

                  That's a different statement than saying Emanuel was a good Director. This is where Democrats can't have it both ways.

                  Either Emanuel doesn't care about responsible governance, or he doesn't know how to govern responsibly. For a guy running an even bigger show now, I'd say knowing which case applies is valuable.

                  In fact, I'm personally inclined toward the 'his heart wasn't in it' approach. I think that describes Emanuel's approach to a whole range of issues, from ending dumb wars to getting universal health care to preventing corporate fraud.

                  His heart just ain't in it. He's more worried about campaign contributions from Wall Street and making sure that Democrats who will be loyal to him rather than independent of him win primaries.

                  •  Strawman much? (0+ / 0-)

                    The GSEs have systemic issues that this episode highlights, and those should be remediated immediately.

                    That doesn't mean Emmanuel is satan, nor does it mean he's unfit to serve as CoS.  It means that the structure of the GSEs needs to be fixed immediately.

                    Revolutionary Road was an awful, awful film.

                    by burrow owl on Tue Dec 29, 2009 at 05:00:42 PM PST

                    [ Parent ]

                    •  yeah, Satan would be a strawman (0+ / 0-)

                      The GSEs have systemic issues that this episode highlights, and those should be remediated immediately.

                      That doesn't mean Emmanuel is satan, nor does it mean he's unfit to serve as CoS.  It means that the structure of the GSEs needs to be fixed immediately.

                      And who better to fix the system than a millionaire investor who got his own patronage stint at a GSE...

                  •  Before anyone can 'acknowledge' Emmanuel (0+ / 0-)

                    was 'negligent', somebody here has to show that he in particular in fact WAS negligent. Nobody has done that yet.All we hear is calls for investigations under circustances in which the unstated premise that the opening of an investigation will destroy him, even if he personally is exonerated completely. The damage from the opening is what is so recklessly sought here.

    •  Here's a thought exercise. (6+ / 0-)

      Forget that you ever heard of Jane Hamsher.  Transport yourself back in time about four years.  Now imagine that you just picked up the morning paper and read that Karl Rove was a director of a corporation that got a huge bailout after totally mismanaging itself, and he may have known what was going on and ignored it or facilitated it.  Are you outraged yet?  Are you even interested?

      Just checking.

      •  I tried bringing the same logic the other day (1+ / 0-)
        Recommended by:
        washunate

        with the norquist thing.

        Literaly had to scream to be heard, ONE, count em ONE user was able to answer my same framing, and shockingly he was a Fannie expert.

        Just shocking how much a liberal like Jane is hated, and how much Rahm is coddled by the same crowd.

        I want Rahm out for POLITICAL reasons.

        I hope the Jane haters want Jane out for political reasons too (which would make them DLC/RNC) and not for personal reasons (her gender, jealousy etc)

        Smile, the decade of Bush and Rahm's last year in politics is almost over.

        by George Pirpiris on Tue Dec 29, 2009 at 04:01:30 PM PST

        [ Parent ]

        •  I don't necessarily want him in or out. (4+ / 0-)
          Recommended by:
          raatz, NYCee, trevzb, Catesby

          Rahm is not the reason Obama is the way he is, i.e., throwing his own progressives under the bus.  Obama picked him because Rahm suits him, which I did not regard as good news when he did it.

          I just don't want Rahm to get a free pass because the AG is a Democrat.  I had quite enough of that in the last administration.

          •  So you are telling me things would be the same (0+ / 0-)

            if Plouffe, or Dean, or Markos were COS.

            You really think Obama would say "throw all the progressives under the bus"
            or
            "go and address the DLC, but ignore the AFL-CIO conference the same week in teh same city, and send Valerie Jarret to NN09"

            Look I hate corruption, and thats fine, but that other guy was right
            This IS a witch hunt,  progressives are desperate to get rid of Rahm.

            Ever notice since Rahm took over the DNC we havent' heard a peep from them on health care, fundraising, or winning 2010.

            I fear that Rahm and crew want us to lose the house in 2010.
            Which is why I hope we lose the 60 vote stranglehold, and keep the house.

            Smile, the decade of Bush and Rahm's last year in politics is almost over.

            by George Pirpiris on Tue Dec 29, 2009 at 04:24:21 PM PST

            [ Parent ]

            •  Tim Kaine has the DNC, not Rahm (2+ / 0-)
              Recommended by:
              trevzb, George Pirpiris

              and Tim Kaine is no Howard Dean.  

              I am not telling you anything other than Obama picked Rahm.  If Rahm wasn't doing his job the way Obama wanted him to, he'd be gone.  See:  Greg Craig.  If Rahm evaporates, Obama will continue to govern from the right of center.  Unless we make it uncomfortable for him and move him left to where he told us he was when he was in Iowa.  

              So far, no luck with that. For every Alan Grayson, we have five or ten progressives who will fold like a lawn chair at the first sign of confrontation.  

              We have to make Obama a little afraid of us or we will continue to get rolled by our own side.  I am looking forward to when his organization starts calling precinct captains in Iowa.  I have a few things on my mind.

              •  Oh common man, you think OBAMA fired Greg Craig? (0+ / 0-)

                Everyone knows that was a personal beef for Rahm.

                Rahm intentionally leaked not to get Craig to resign, but to kill his career.

                I agree with you on pressure, but put someone in the COS spot whose sole mission in life is to kill that pressure, it makes no sense.

                Sorry, but I think if you put Dean in as COS, and as you imply Obama would still push the right of center and back off real HCR, Dean would resign.

                I also don't think Dean would have been leaking like crazy to shape the HCR bills, smear Greg Craig, or to pre-empt the DC bubble's press reports.

                I agree with you 150%, but I am not so cynical about Obama.

                What I wont agree with you is that Rahm is anything but a total roadblock to any kind of change.
                And I also disagree that Obama would fire him over sheer incompetance or disloyalty.  Only one person can fire Rahm, and Obama hasn't fired anyone yet.

                The best we can do is force a resignation.

                And BTW, Kaine aint no Dean, but Kaine aint no Kaine.
                I am really curious what those 150 million the DNC has are being used for.
                I have heard NOTHING about voter registration, especially in Virginia and other purple states.

                Smile, the decade of Bush and Rahm's last year in politics is almost over.

                by George Pirpiris on Tue Dec 29, 2009 at 04:55:07 PM PST

                [ Parent ]

          •  The entire situation was investigated when the (0+ / 0-)

            Other party was in office, and given their tendency to political prosecutions, do you not think it more likely that they would push it if they thought they could have. Discounting for incompetence arising from politicization of appointments, they still would have loved to investigate a busy Democratic representative, but ....it didn't happen. Why not?

      •  Outraged, sure. (1+ / 0-)
        Recommended by:
        Bonsai66

        Inferring criminal conduct from that?  Nope.

        Revolutionary Road was an awful, awful film.

        by burrow owl on Tue Dec 29, 2009 at 04:07:13 PM PST

        [ Parent ]

      •  Honestly, most outside directors are stooges (2+ / 0-)
        Recommended by:
        theran, washunate

        for the executive management in corporate America.

        "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

        by Geekesque on Tue Dec 29, 2009 at 05:56:57 PM PST

        [ Parent ]

        •  I completely agree (0+ / 0-)

          I would reframe that observation a bit to ask, does it matter that our current Chief of Staff is perfectly happy being  a stooge and cavorting with stooges and bailout out stooges? Is that relevant? Does it speak to his leadership style, his vision for America, his abilities to get things done?

          Or is it irrelevant?

      •  Check your premises: (1+ / 0-)
        Recommended by:
        theran

        and he may have known what was going on and ignored it or facilitated it.

        I would say that such a director is grossly negligent regardless of bailouts.

        But the fact is, directors don't audit corporations.  KMPG was its auditor. If the accounts are accurate on their face, they simply have no way of knowing any falsity.  

        So you should consider the premise unproven.

        Subsidies without cost controls, regulatory reform means that citizens get a little more awful insurance at a huge cost to taxpayers. Like Part D but worse.

        by Inland on Tue Dec 29, 2009 at 06:20:08 PM PST

        [ Parent ]

      •  If the SEC was making the charge, I would be (0+ / 0-)

        interested. If somebody without investigative power and without specifics was making it, particularly a partisan against Rove, not so much. Particularly if the charge related to dates seven or eight years before the bailout, which had not resulted in charges against Rove when the SEC looked at it and looked around for those people who had to be made to make restitution to investors without picking him. Actually, make that if Clinton's SEC, the chronology is off but you take the point, had looked, charged, collected and not named him.

  •  Do you happen to know (6+ / 0-)

    how much he was compensated as a director, and whether/how much stock he owned, and whether stock was part of compensation?  Did he attend board meetings?  Was he paid for doing so?  Was he at the board meetings when these issues were discussed?  Do the minutes reflect the discussions?  What has his involvement been, if any, in policy decisions that affect Freddie since the administration took office?

    I think these are relevant questions.  I think that it is relevant to the governance we have now whether the President's CoS was incompetent, negligent, corrupt, or just indifferent. I have never thought of him as "my guy."  Beginning in 2006, I saw him as opportunistic, amoral, and a DLC type.  

    He will be the Karl Rove of the left if he isn't already:  hated by the other side for his victories and his Machiavellian ways, and hated by his own side for his treachery and his screw-ups.  

    •  The One Difference (3+ / 0-)
      Recommended by:
      NYCee, 2laneIA, washunate
      He will be the Karl Rove of the left if he isn't already:  hated by the other side for his victories and his Machiavellian ways, and hated by his own side for his treachery and his screw-ups.

      But Karl Rove was actually for the right.

      Rahm is for Rahm.

    •  I'm not intimately familiar with Freddie Mac (0+ / 0-)

      Personally, I come from a perspective that's more than a little hesitant of the concept of a quasi-government, quasi-private entity. If an organization is so central that it can't be allowed to go bankrupt, then it should be run directly by the government. If an organization can be allowed to be held by the investing public, then it doesn't threaten national security for it to collapse; that's why we have bankruptcy codes in the first place, to manage such a failure. Even Enron, the largest corporate bankruptcy of its time, wasn't backstopped by the Treasury.

      My basic understanding is that Emanuel did what a lot of people do. He got a cushy appointment because of who he knew, he made some money, and went on with life. For him, it was a brief stop between the White House and the House of Representatives, a chance to make and strengthen contacts along the way.

      There are a few articles that have looked more in depth into his tenure. I've seen 13 months reported and 14 months reported, with something like $300,000 to $400,000 in compensation. I haven't looked through minutes or anything.

      Honestly, of the list you highlight, in this particular case, I'd probably suggest indifferent. And to me, that's the real red flag, people who are willing to go along with other people's schemes indifferent to what is happening. The people perpetrating the scam, you know what to expect. And the people being bought off to ignore it, you know what to expect, as well. But the people who don't care that a scam is going on are wildcards; you never know what's going to happen. They're not strong enough to either demand their share or speak up about the problem. Someone who looks like he's on top of something but isn't is often more of a problem than having a void of leadership be noticeable.

      I think that flows right in to a whole range of issues within our financial/economic system, and more broadly to other policy areas. I'm not sure the Administration really has a Plan B. At every step of the way, the projections for how bad things can get have been underestimated. You never want to generalize too much, but I think Emanuel's tenure at Freddie is pretty revealing for how he goes about life. He's not an instigator, but an opportunist, taking what's there for the taking without thinking about the bigger picture. He'll be off on the next project anyway before the fallout hits. Why worry? Taxpayers can always pick up the pieces.

  •  Jane gets to be Lieberman. (3+ / 0-)
    Recommended by:
    Geekesque, beltane, Bonsai66

    Just like Joe she'll have the media saying "even librul Jane Hamsher wants President Obama to fail."

    Still a man hears what he wants to hear And disregards the rest

    by Mike S on Tue Dec 29, 2009 at 03:36:20 PM PST

  •  In the circles Rahm runs in (1+ / 0-)
    Recommended by:
    washunate

    being a board member is kinda like a person of college age wearing a pin-back button on his backpack or jean jacket.  

    "In our century, we've learned not to fear words" - Lt. Uhura

    by ShempLugosi on Tue Dec 29, 2009 at 03:42:24 PM PST

    •  this is a great observation (5+ / 0-)

      This complacency is at the heart of the paralysis of our system. Like I said in the diary, I assume Emanuel had no involvement in instigating any questionable behavior.

      Rather, he went along. A whole generation of rich, ambitious men like Emanuel went along for the ride.

      That's precisely where internal controls and management weaknesses happen, where the potential for fraud and abuse are most ripe. It's why our situation isn't the fault of any one or two people, but a whole culture of governance that has failed.

      •  That's a reasonable response. (1+ / 0-)
        Recommended by:
        washunate

        Going along w/ Hamsher's pyschotic CT, however, is not.  

        Revolutionary Road was an awful, awful film.

        by burrow owl on Tue Dec 29, 2009 at 04:06:19 PM PST

        [ Parent ]

        •  Psychotic? Really? (1+ / 0-)
          Recommended by:
          washunate

          Please Burrow,  explain further.

          What seperates his response from Jane's CT?

          Funny how you call it a CT, when as a I supporter call it a legitimate smear campaign.

          Rahm and the Republicans know all about it and thats fine, its a game in politics that each side cries foul over.

          They tried to smear Howard Dean big time last week, but I didnt hear you cry about it then.

          Smile, the decade of Bush and Rahm's last year in politics is almost over.

          by George Pirpiris on Tue Dec 29, 2009 at 04:37:06 PM PST

          [ Parent ]

        •  Why is it psychotic? (1+ / 0-)
          Recommended by:
          washunate

          Even if she had her way (fat chance) and got the investigation up and running and it was independent and it turned out Rahm was squeaky clean, why do you judge her so harshly? Why cant you see it as at least an attempt to show the nasty corporate hacks that Obama has surrounded himself with that progressives dont give them a pass, no matter what they do?

          You assume you know her motives. You assume. You dont know.

          As for her coalescing w/Norquist making her a big bad boogeywoman, it strikes me as much more than just a tad hypocritical that those who pounce on her for this have no problem going out of their way to support and try to reelect, even, those Dems who coalesced with far worse than Norquist, ie, the man who held the power even since he was Supreme Courted into the WH, the dishonorable GWB... like the Dems who coalesced with him to help pass his tax cuts for the wealthy, the bankruptcy bill, and that gargantuan stinker, that is stinking up the world to this day - the Iraq War. More than half the Senate colluded with the GOP on that one.

          But that massively immoral and illegal signing on with Bush was within the box, wasnt it? So they get a pass from the Hamsher haters, while she, jumping out of the box, gets hammered.

          Well, she didnt coalesce for the tax cuts, the bankruptcy bill or the Iraq War.

          Where is the rage for those dirty fuckup scoundrels in the Dem tent, as we speak?

          This rage against Hamsher is the rage of the conventional... rage against those who rage against the machine.

          It is as progressive as Rahm himself.

           

          Should a "progressive" Dem blog dwell in the safe zones of a tame party, or should it drive a tame party to break out?

          by NYCee on Tue Dec 29, 2009 at 04:40:15 PM PST

          [ Parent ]

          •  She's claiming - w/o any evidence - that (2+ / 0-)
            Recommended by:
            theran, littlebird33

            Rahm engaged in criminal conduct and then somehow put together a bill to cover his tracks.  That's ridiculous, and in line w/ her previous forays into addled, absurd CT (see also: Spitzer)

            Revolutionary Road was an awful, awful film.

            by burrow owl on Tue Dec 29, 2009 at 04:58:17 PM PST

            [ Parent ]

            •  Claiming? Are you sure? (0+ / 0-)

              You say she is claiming Rahm engaged in criminal conduct... isnt she saying she suspects he may have, and that is why she wants an investigation?

              And what did she do re Spitzer?

              Should a "progressive" Dem blog dwell in the safe zones of a tame party, or should it drive a tame party to break out?

              by NYCee on Tue Dec 29, 2009 at 05:30:41 PM PST

              [ Parent ]

              •  She's calling for a investigation into his (1+ / 0-)
                Recommended by:
                theran

                "public corruption."  Sounds like a claim to me.

                Revolutionary Road was an awful, awful film.

                by burrow owl on Tue Dec 29, 2009 at 05:53:38 PM PST

                [ Parent ]

                •  Careful! You are misrepresenting. (0+ / 0-)

                  She uses the word potential. I just read the letter again.

                  Here:

                  We believe there is an abundant public record which establishes that the actions of the White House have blocked any investigation into his  activities while on the board of Freddie Mac from 2000-2001, and facilitated the coverup of potentially criminal actions until the 10 year statute of limitations has run out."

                  Jane Hamsher and Grover Norquist wrote to Attorney General Eric Holder requesting an investigation Rahm Emanuel’s role on Freddie Mac’s board during years when executives laid out a plan to defraud investors, and the White House's subsequent role in preventing an investigation.

                  To make matters worse, the administration is pushing for an $800 billion bailout of Fannie and Freddie while the organizations lack an Inspector General and basic oversight.

                  Before the White House commits any more money to Fannie and Freddie, the Justice Department should begin an investigation into the cause Fannie and Freddie's conservatorship, into Rahm Emanuel's activities on the board of Freddie Mac (including any violations of his fiduciary duties to shareholders), into the decision making behind the vacancy of Fannie and Freddie's Inspector General, and into potential public corruption by Rahm Emanuel in connection with his time in Congress, in the White House and on the board of Freddie Mac.  We also call for the immediate appointment of an Inspector General with a complete remit to go after this information.

                  Should a "progressive" Dem blog dwell in the safe zones of a tame party, or should it drive a tame party to break out?

                  by NYCee on Tue Dec 29, 2009 at 06:23:04 PM PST

                  [ Parent ]

                •  You still havent explained Spitzer... (0+ / 0-)

                  Should a "progressive" Dem blog dwell in the safe zones of a tame party, or should it drive a tame party to break out?

                  by NYCee on Tue Dec 29, 2009 at 06:23:57 PM PST

                  [ Parent ]

          •  You mean what's a little smear campaign between (0+ / 0-)

            Progressives for whom moral rules are for others?

  •  Isn't Rahm a witch? (5+ / 0-)

    I've been led to believe he is the high priest of some sort of satanic cult who hates babies, puppies and rainbows.

  •   (6+ / 0-)

    Photobucket

    Some of y'all owe Deoliver47 a big ol' apology.

    by turnover on Tue Dec 29, 2009 at 03:58:22 PM PST

  •  We know, per the report, that the executive (1+ / 0-)
    Recommended by:
    ETF

    picks didn't exercise any oversight.  So what else do you want, exactly?

    Lambast the system, lambast Rahm, but unless you know something that the investigators don't, the inquiry pretty much ends there.

    Revolutionary Road was an awful, awful film.

    by burrow owl on Tue Dec 29, 2009 at 04:05:14 PM PST

  •  excellently written diary (4+ / 0-)
    Recommended by:
    burrow owl, denise b, Catesby, washunate

    lots of good points, almost none of which are acknowledged in the comments, thanks to this whole rahm v hamsher debacle. everything not talking specifically about rahm is spot on from my viewpoint, and i hope other folks who read this see that as well.

    i could go on about the whole rahm thing, but frankly, plenty of people who know way more and way less about it than me will no doubt take care of all that. i just wanted to thank you for putting forth such a detailed explanation of the way you see this situation.

    •  I certainly think the diarist (0+ / 0-)
      is correct to take a step back and ask about what wrong.  Hamsher has been a dipshit during this whole thing, which is a shame because the governance of Freddie and Fannie really has been a mess.  
      So the diarist is spot-on correct to refocus us on the real issue.  The call for additional investigation is misplaced given that we know what went wrong, but the gesture is commendable.

      Revolutionary Road was an awful, awful film.

      by burrow owl on Tue Dec 29, 2009 at 04:30:59 PM PST

      [ Parent ]

      •  The whole thing would be respectable if it was (1+ / 0-)
        Recommended by:
        Christy1947

        about governance at the GSE's.

        But, everyone with two brain cells to rub together knows that this kind of thing is about drawing blood on one's political enemies.  No coincidence that the target of this 'good governance' outcry just happens to be the Chief of Staff to a President that both Hamsher and Norquist openly despise.

        "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

        by Geekesque on Tue Dec 29, 2009 at 05:55:06 PM PST

        [ Parent ]

        •  that's an interesting perspective (1+ / 0-)
          Recommended by:
          Geekesque

          It's a fair point. I opposed Emanuel being chosen as Chief of Staff. Certainly, he hasn't accomplished anything in the last year to change my mind.

          What I would counter is that that ignores the elephant in the room. How do we talk about governance without mentioning the governors? The fact that Emanuel is Chief of Staff is precisely why this is relevant. The Administration to this day is at the heart of bailing out a financial system mismanaged into the ground.

          I mean, rarely is the linkage so close as to have someone who was appointed to a Board term at one of the specific organizations in question. It's like Chevron having to rename the Condoleeza Rice after people figured out highlighting her Board experience might not be the wisest course of action. It's like Robert Rubin rewriting the rules, then becoming ultra rich at Citi, and coming back full circle to have people who served under him in the Clinton Administration now doing things in the Obama Administration.

          If Emanuel were just another retired finance guy on the beach in the Bahamas, this wouldn't be as relevant.

          •  Realistically, someone who's on a board for less (1+ / 0-)
            Recommended by:
            washunate

            than two years is going to collect a paycheck and make connections.  They won't have any real clout--that requires developing working ties and relationships with both executives and other board members.  

            I would view Emmanuel's stint at Freddie Mac not as an actual exercise in governance, but part of the larger generally icky revolving door of favors and influence.  Closest analog to me would actually be John Edwards at Fortress.  Show up, lend your name to the enterprise in order to confer legitimacy, keep your mouth shut, collect a check.

            "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

            by Geekesque on Tue Dec 29, 2009 at 06:10:20 PM PST

            [ Parent ]

    •  I was hoping that by waiting until after (0+ / 0-)

      Christmas, we might be able to talk more about the governance at the heart of the story...

      wishful thinking, I know!

      But I appreciate the comment. I think a lot of the discussion is people trying to think through how to square two incompatible ideas. Can we hold people in leadership positions responsible, while not holding them responsible? Can we say people are eminently qualified for leadership while explaining away their past as being not really that important?

      Is singling out individuals unfair when it's a systemic problem, or is that the only way to put the systemic failure at a level we can deal with?

      One of my favorite thought exercises for corporate governance is to imagine what scenario would be required to make an individual Board member say no. You know, if a Freddie executive reported to the Board that they did a study and denying home loans to people with puppies would make them money, would anybody say, hey, come again?

  •  I'd care less about Rahm's past... (3+ / 0-)
    Recommended by:
    trevzb, George Pirpiris, washunate

    if Obama and Holder had shown some respect for the law by investigating and prosecuting bush and co.  But, since they are willing to risk obstruction of justice (and show a remarkable contempt for the constitution) by ignoring those gross and horrific felonies, I find myself much less eager to defend them or Rahm.

    Corporate PACS, its not just bribery, its a lifestyle!

    by rubine on Tue Dec 29, 2009 at 04:23:58 PM PST

    •  Let alone risking our military by not ending DADT (1+ / 0-)
      Recommended by:
      rubine

      for political reasons.

      I have hope that the next military budget will repeal it, I just hope compensantory measures are in place for those soldiers that want to serve their country.

      I also think they looked weak when they came into power, and said the Fed would not interfere in California Med Marijuna, and the paramilitary force known as the DEA flexed their muscles and raided anyways, without retribution.

      Smile, the decade of Bush and Rahm's last year in politics is almost over.

      by George Pirpiris on Tue Dec 29, 2009 at 04:40:08 PM PST

      [ Parent ]

  •  Lets dunk him (0+ / 0-)

    and see if he floats.  If he floats he's a witch.

    Laughter is a force for democracy - John Cleese

    by GlowNZ on Tue Dec 29, 2009 at 05:47:41 PM PST

  •  How did Hillary make all that money on cattle (0+ / 0-)

    futures?  I DEMAND a full investigation.

    Freaking traitorous Firebagging morons.

    "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

    by Geekesque on Tue Dec 29, 2009 at 05:53:05 PM PST

  •  Whether something is true or not... (0+ / 0-)

    what a concept!

    Let's Adopt the James Cameron school of politics: let the sheer quality of the product sell the ideas.

    by Paul Goodman on Tue Dec 29, 2009 at 07:16:04 PM PST

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