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For progressives and the millions that voted for President Obama one early decision will tell us whether or not the President is really on our side ... or whether he is going to sell out over issues like Social Security reform.

Four years ago Obama picked Larry Summers and Tim Geithner for his top economic positions. That was the day I knew that for all Obama's good intentions he had sold his soul to the bankers. And so it turned out. Geithner and Summers have banker DNA. They were able to surround the President and present only their case for our the economy (and Wall Street) works.

The central theme of the bankers was that nothing illegal was done leading up to the financial crisis. It was just all bad decisions by well meaning people. Despite reams of information to the contrary almost no prosecutions were undertaken of those who caused much of the crisis (YES ... there was clear fraud in many cases by major financial institutions). Summers and Geithner sold the President on the need for stability and that any prosecutions would hurt or damage the economy (kind of the same idea as not prosecuting Bush officials for torture). Wall Street walked away pretty much scott free.

That brings us to now.

I like President Obama, but I fear that he is out of his depth when it comes to financial issues. He is far too logical and thoughtful to appreciate the lengths that the banksters will go to tilt the playing field in their direction, the rest of us be damned. Of late though he does seem to have started to question the perceived wisdom instilled in him by Summers and Geithner. The next appointments will tell if this is true.

The KEY decision that will set the tone for the next 4 years is the appointment of Geithner's replacement. This will be the person responsible for negotiating a way around the fiscal cliff and all that entails related to Social Security, defense spending, Medicare etc.

Already Wall Street friendly names are being thrown around ... like Erskine Bowles (of the Cat Food Commission). Just today on Bloomberg TV the announcers were pitching that he was Wall Street's pick.

If Bowles, or some other Wall Street friendly bankster is picked then you can start to seriously worry about Social Security and various entitlements.

(Let me be clear. By a Wall Street type I mean an individual that thinks that Wall Street in its current form actually adds value rather than being a ''taker'' from the economy. They believe that what is good for Wall Street is good for Main Street.)

Yesterday, also on Bloomberg TV, there was an interesting discussion which saw one commentator suggesting that the most important qualification for the new Treasury Secretary was that he/she was close to the President, someone who the President could trust implicitly. This is an opinion that makes sense - because if the President still has any progressive views left, then being able to get them on the table and then get them into the final deals, will still be possible.

So keep a close watch on how this plays out. This single appointment will likely say more about the direction of Obama's adminstration for the next 4 years than any other.

If you have any ideas for a ''good'' Treasury Secretary please add them in the comments.

For now other names being mentioned are:
Jacob Lew ... currently Chief of Staff.
Larry Fink, chairman chief executive of BlackRock
Roger Altman, chairman of Evercore Partners
A corporate CEO of CFO

My choice ... although he would never take the job. Ray Dalio.

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Comment Preferences

  •  Tip Jar (12+ / 0-)

    Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

    by taonow on Thu Nov 08, 2012 at 05:14:12 AM PST

  •  Paul Krugman (9+ / 0-)

    The obvious choice.

    "Thou shalt keep thy religion to thyself" -George Carlin

    by Easternshore Lib on Thu Nov 08, 2012 at 05:27:07 AM PST

    •  No, Stiglitz! (7+ / 0-)

      The free market is not the solution, the free market is the problem.

      by Azazello on Thu Nov 08, 2012 at 06:08:56 AM PST

      [ Parent ]

    •  No way (0+ / 0-)

      I'm sorry to say that Krugman would probably never get confirmed as Treasury Secretary.

      I happen to believe Krugman would be an invaluable addition to the administration at the highest levels.

      If the administration can find a way to appoint him so that it bypasses the Senate confirmation process then by all means the administration should do so.

      Since the start of the financial crisis Krugman has been right more often than the vast majority of economic experts especially Larry Summers. Summers: what a disaster of an appointment.

      Krugman as a replacement for  Ben Bernanke in 2014: now there's an interesting and postive idea.

    •  One practical suggestion, one ideal suggestion (0+ / 0-)

      A practical suggestion is Michael Bloomberg. Few if any people are considering him. He might make a great Treasury Secretary.

      There are three key economic issues facing our nation: people are talking about two of them and talking about the third one if the wrong way.

      The three issues with the most important issues first.

      + Regulation of the financial services industries
      + The fiscal cliff
      + Jobs (this is the wrong issue; see my comments below)

      + Regulation of the financial services issue is the most important issue we face. It will have the longest lasting consequences for our nation.

      The Treasury Secretary should be someone with intimate knowledge of those markets and the issues involved to regulate those industries. This person should also be highly regarded by those in those industries and by the very serious people in the political arena. Ideally the candidate would be someone who can not be co-opted by the players involved including politicians, bankers, insurers, hedge fund managers, financial exchanges and markets, and lobbyists.

      Michael Bloomberg seems like an ideal candidate. He's spent his entire career in the financial services industry. He's achieved incredible success. I think he personally is worth more than all members of Congress and Mitt Romney combined. And members of the financial services industry respect him; I think they fear him more than like him - and that's a good thing.

      + The fiscal cliff is an issue created by the political class. We don't need a Washington insider to solve this problem. Bloomberg is smart and experienced enough to address the policy side of this problem. I don't know how savvy he would be to address the political side of this issue.

      + Everyone keeps talking about jobs as a key issue facing our nation. I disagree: the underlying issue is reduced aggregate demand due to unprecedented middle-class debt as a result of the housing bubble.

      For every major recession since World War II someone was left "holding the bag". This is one of the few recessions over that time in which the middle class was left holding the bag.

      In other words politicians talk about this issue in terms of slow job growth as a result of weak demand because politicians believe they can solve this problem by changing fiscal policies, the tax system and other approaches. They can not solve this problem via these means.

      The reasons politicians don't talk about the underlying issue (middle-class debt leading to reduced demand by the middle class) is simple: so far there are no "easy" answers to this problem.

      During the presidential campaign Governor Romney did say he was opposed to political solutions to this issue. While I don't think that President Obama has made specific comments on this topic it seems clear that, by his inaction, the president basically agrees with the Governor on this.

      I say "basically" because I know that the administration has attempted to address this issue via the HAMP and other programs. These programs don't address the fundamental problem: the mortgage owed is 20%, 30%, or more than the value of the underlying asset on more than 10 millions single family homes. Lowering mortgage payments on these loans doesn't solve the problem. To reiterate: real problem is that the underlying mortgage principle is wildly out of line with underlying market values.

      Folks in this position, even if they are current on their mortgage payments, are more than likely to take a loss on their home if they want to sell. For younger families in their prime earning years who have job opportunities outside of their current residence these mortgages are like anchors around their economic lives.

      There have been proposals from reputable economists to address this issue. You probably didn't know that because this is not a priority for the current Treasury Secretary. I don't know if Michael Bloomberg would consider these proposals. However on this topic he couldn't be worse than Secretary Geithner.

      I will add one more thing in Bloomberg's favor. To paraphrase comments on FDR as president: Michael Bloomberg has both a first rate intellect and a first rate temperament. Starting from nothing he and his partners built an empire providing information services to the financial services markets. He didn't achieve this level of success by hiring second and third rate employees.

      Finally one ideal suggestion: Paul Volcker. He has specific ideas about too big to fail that are absolutely valid and realistic. His ideas run contrary to the current idea that individual institutions should be too big to fail.

  •  We have a good Treasury Secretary already. (1+ / 0-)
    Recommended by:
    hayden

    Stop showing contempt for the President by suggesting that he's captive to Geithner.  He wasn't captive to his generals in determining exit strategies for Iraq and Afghanistan, was he?

    You know, I sometimes think if I could see, I'd be kicking a lot of ass. -Stevie Wonder at the Glastonbury Festival, 2010

    by Rich in PA on Thu Nov 08, 2012 at 05:28:33 AM PST

    •  Geithner (9+ / 0-)

      1. Geithner has said he is going to quit. So a replacement is necessary.

      2. Obama definitely bought the Summers/Geithner line. Not surprising given all else he had on his plate at the time. It is not so much criticism as it is describing reality.

      Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

      by taonow on Thu Nov 08, 2012 at 05:33:03 AM PST

      [ Parent ]

      •  "Given all else he had on his plate" (2+ / 0-)
        Recommended by:
        fenway49, eztempo

        This was what on his plate. He "bought their line" because he agreed with it.  Why is that so hard for people to grasp?

        You know, I sometimes think if I could see, I'd be kicking a lot of ass. -Stevie Wonder at the Glastonbury Festival, 2010

        by Rich in PA on Thu Nov 08, 2012 at 05:36:21 AM PST

        [ Parent ]

        •  Because it's false. (1+ / 0-)
          Recommended by:
          Russgirl

          Geithner was a hero of the last four years.  In particular, two things set him apart:

          1.  His management of the auto bailout, and

          2.  His bank stress tests, which restored confidence in the banking system and stabilized the economy.

          •  Have you read Confidence Men by Ron Suskind? (0+ / 0-)

            This is a rhetorical question.

             It is highly unlikely that you've read this book based on your glowing comments about Geithner.

            The book makes it clear that in meetings with the President  the President showed a preference for harsh treatment of Citigroup, i.e. liquidating the company.

            After those meetings one of Geithner's first calls was to the CEO of Citigroup to keep him abreast of the unfolding situation.

            The book also makes clear that Geithner and the Treasury eventually "slow walked" the plans to liquidate Citigroup.

            Is this your idea of heroic behaviour on Geithner's part?

  •  Does this community have a preference? (1+ / 0-)
    Recommended by:
    Mambo

    I'd like to see brief profiles of Lew and the others put together with analysis by someone other than Bloomberg or News Corp employees.  And, it seems now's the time to make some suggestions for Treasury and top jobs at NEC, OMB if (shudder) they're not on taonow's list.

  •  the sell out language? Already? (8+ / 0-)

    Have we learned NOTHING about how to effect true, progressive change? Are we going to start with the setting personal benchmarks for 'sell out' and damning PBO and his entire administration and legacy if he doesn't obey?  Immediately?

    It will take at least a decade to substantively undo conservative damage IF we don't pull this b.s. and have 2014 be another 2010.  Republicans knew how to remake American political discourse and it took them 30 years.  And here we are again, not willing to wait 30 fucking hours before we start in again.

    God.  

  •  Intentional - not a mistake (2+ / 0-)
    Recommended by:
    Mambo, Deward Hastings

    You write:

    I like President Obama, but I fear that he is out of his depth when it comes to financial issues.
    I suggest that Obama knows exactly what he is doing.  And what he is doing is following the orders of the wealthy and corporate interests who funded his election, and who surround him with lobbyists, advisors, policy wonks, and "inside sources".  

    Having helped put him in office, these wealthy and corporate interests now want their due: control over the institutions of government such as the Federal Bank and the Treasury (as well as a myriad of other offices).

    There will be no prosecution of fraud by bankers and Wall St. barons.  There will be no teeth in any regulation of financial institutions.  There will be no re-institution of Glass-Steagall.  This is what the wealthy and corporate interests want, and this is what we the people will get.

    President Obama did not make a mistake of ignorance in choosing Summers and Geithner, he was paying off a debtt to those who own him.  His actions were intentional - not a mistake - dictated by forces larger than him..    

    "The fool doth think he is wise: the wise man knows himself to be a fool" - W. Shakespeare

    by Hugh Jim Bissell on Thu Nov 08, 2012 at 05:38:11 AM PST

    •  cynical (1+ / 0-)
      Recommended by:
      eztempo

      I am cynical but not quite that much.

      I have a financial background and have talked to lots of people who don't (like lawyers), and have been amazed to see how differently we can see the same world. I believe (though probably without enough evidence) that Obama has good intentions. I just think he has bought the Wall Street view (which can be explained in a very logical and seemingly reasonable way) without having being sufficiently exposed to the alternatives.

      Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

      by taonow on Thu Nov 08, 2012 at 05:48:20 AM PST

      [ Parent ]

      •  I agree about Obama intentions (0+ / 0-)

        I agree with you that Obama entered the presidency with the best of intentions for the American people.

        My thinking is that our system of elections that requires  office-seekers to raise large amounts of money from private sources in order to gain office is inherently corrupting.  Having asked those private wealthy and corporate interests for the large amounts of money he needs to win office, the president is forced to dance to their tune.  

        (The caveat here is that now Obama is in his second term, and will not be seeking public office again, so he is in a position to blow off those wealthy and corporate interests.  Of course, those wealthy and corporate interests may respond in kind by "blowing off" support for Obama's successors - and Obama will be pressured to prevent that by appeasing the wealthy and corporate interests.)

        Yes, of course Obama "bought" the Wall St. view, because he is surrounded constantly by the lobbyists, advisors, policy wonks, and "inside sources" bought and paid for by the wealthy and corporate interests who want to make sure the president sees things their way.  Those of us without the millions and billions of the wealthy and corporate interests will never get close enough to the president to expose him to any "alternative views".  This is exactly what the wealthy and corporate interests want.

        "The fool doth think he is wise: the wise man knows himself to be a fool" - W. Shakespeare

        by Hugh Jim Bissell on Thu Nov 08, 2012 at 07:27:00 AM PST

        [ Parent ]

    •  So Obama is a puppet? (0+ / 0-)

      Dancing to the tune of the monied masters who were behind the scenes the whole time, calling the shots, dictating the President's decisions. Obama is just following the orders of the wealthy and corporate interests.

      And this:

      he was paying off a debt to those who own him
      Obama is "following the orders" because he is "owned". Even I can hear that whistle, and my dog is cowering in the corner with his paws over his ears. Benefit of the doubt: maybe you were just expressing your anger at the lack of action (or even intent) at calling Wall Street and the Bankers to task for their criminal actions and intent. And I completely agree. But reread the lines please, there's a better way of saying this that takes the comment out of near-troll territory.
      •  Things are a little more complicated (0+ / 0-)

        It is my thinking is that our system of elections that requires  office-seekers to raise large amounts of money from private sources in order to gain office is inherently corrupting.  Having asked those private wealthy and corporate interests for the large amounts of money he needs to win office, the president is forced to dance to their tune.  

        Having gained office, the president is now surrounded constantly by the lobbyists, advisors, policy wonks, and "inside sources" bought and paid for by the wealthy and corporate interests who want to make sure the president sees things their way.

        The money put up by the wealthy and corporate interests gives them ready access to the president and his team.  This ensures that the only viewpoints the president receives are those favorable to the wealthy and corporate interests.

        You and your dog may cover your ears and your eyes, but this is the way our government works, whether you choose to acknowledge it or not.

        In my view, we the people should be insisting that our elections by totally funded by public (not private) money.  This ends a system that is inherently corrupting to even our most honest and dedicated public servants.

        "The fool doth think he is wise: the wise man knows himself to be a fool" - W. Shakespeare

        by Hugh Jim Bissell on Thu Nov 08, 2012 at 07:34:27 AM PST

        [ Parent ]

    •  And once again the left marginalizes itself. (1+ / 0-)
      Recommended by:
      CwV

      This kind of thinking and advocacy will cause the left to be ignored.  Make yourself the enemy of the sane, and no president is going to take your screaming into account.

      •  You and I are already marginalized (0+ / 0-)

        You and I are already marginalized by our relative poverty compared to those wealthy and corporate interests.

        The wealthy and corporate interests surround the president with lobbyists, "thought-leaders", positions statements, policy papers, advisors, etc. on a daily basis.

        You and I only get the (fleeting) attention of the president every four years.

        "The fool doth think he is wise: the wise man knows himself to be a fool" - W. Shakespeare

        by Hugh Jim Bissell on Thu Nov 08, 2012 at 07:39:07 AM PST

        [ Parent ]

  •  You are not going to like what I have to say, (2+ / 0-)
    Recommended by:
    taonow, Cedwyn

    but I had this conversation with someone just yesterday.

    What is important is that President Obama in order for him to carry out his agenda he is going to need an ally or two or three from the other side of the political spectrum to enable  bringing most of the Republicans in the house to work with Obama, as well as preserving our SS and Medicare/Medicaid.

    His replacement of Geithner should be a well respected on both sides Republican, calm down now because there are some....

    The two that came up are both allies to Obama and have worked closely with him and even one endorsed a Democrat. Either Dick Lugar or Chuck Hagel... They are well respected with other Republicans as well as Democrats. I am sure there may be others, but these two came to mind.

    I also think that the House Republicans are in a redemption mode and will try and make the Tea Party members irrelevant. Just my humble opinion.

  •  The deed may be done before a new cabinet is (2+ / 0-)
    Recommended by:
    tiredofcrap, eztempo

    constituted.  

    Behnoer stated yesterday that he would be willing to consider addressing the FC issue only if PBO was "willing to shore up the entitlement programs which are the driver of much of the nations debt".  

    That means sell out social security -- which is solvent and has never driven a penny of the nation's debt (see Gore / lock box or any Bernie Sanders speech).  PBO was careful to never adopt the language of the Dem congressional caucus during the campaign.  In other words, he never said he wouldn't agree to this sort of "Grand Bargain".  

    I believe based on his consistent choice of words.  PBO has every intention of trading an incremental increase in the SS retirement age in exchange for getting out of the FC issue which the R congress created.  The only changes to SS which ought to be on the table are a) means testing and b) raising the taxable income level.  Even those changes should be accompanied by a "lock box" change in the accounting methodology.  That would benefit both SS and the overall budgeting process.

    •  except (2+ / 0-)
      Recommended by:
      pistolSO, eztempo

      we have to remember and always clarify that SS is NOT an entitlement program.

      Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

      by taonow on Thu Nov 08, 2012 at 05:44:36 AM PST

      [ Parent ]

    •  I agree strongly on the raising of the cap on (3+ / 0-)
      Recommended by:
      divineorder, CwV, eztempo

      taxable income, but I do have some reservation on incremental retirement age and means testing on income levels.

      •  we can't raise the age (2+ / 0-)
        Recommended by:
        divineorder, pistolSO

        it would be a travesty - and a sell out of the people who need the program the most.  

      •  We already have incremental retirement age (0+ / 0-)

        It used to be 65. Now it is at 66+. As people are living longer, it makes sense to increase the retirement age (although the idea of retiring when you've still got a lot of life to go is great - my mother died at 95 and my father just turned 95 and I'm 65 - I've probably got another 30 years + and I retired at 62).

        Take off the taxable cap and incrementally increase the retirement age as the average length of life increases. If it stops increasing, change the increment until it is zero or regresses if necessary.

        I reject your reality and substitute my own - Adam Savage

        by woolibaar on Thu Nov 08, 2012 at 07:10:09 AM PST

        [ Parent ]

        •  "Makes sense" to raise the retirement age? (0+ / 0-)

          Tell that to the employers.  Hell, they don't want to hire anyone in their 50s. much less mid-60s!  Raising the age of full benefit availability merely shoves more of us caught in this jobless recovery into dire need longer.

      •  I'll second and expand (0+ / 0-)

        Raise the cap to $250K. That will keep SocSec solid as is.
        Increasing the age is a cruel trick on laborers. A couple more years of backbreaking work when you are already 65, sucks!
        And Means Testing rips away one of the basic pillars of the system, that is that it is fair. That it applies equally to everyone, regardless of their "station in life". If it's means tested, it becomes a program only for the poor, with all the stigma attached to the recipients, a social barrier for people on the cusp and an incentive for those above the Means breakpoint to dismember the program.

        If I ran this circus, things would be DIFFERENT!

        by CwV on Thu Nov 08, 2012 at 07:30:41 AM PST

        [ Parent ]

  •  Robert Reich. (5+ / 0-)

    He served on Obama's team in '08.

    Must point out that one ought not paint Summers with Geithner's brush. Summers wanted to break up the banks: too big to fail, too big to exist. Hardly a business as usual approach.

  •  Not out of depth at all (0+ / 0-)

    Look at the "hissy fit" the stock market took yesterday. They are spoiled primadonnas. But they control a lot of the pension funds of regular, working Americans. Geithner is way too "wall street" for me, but to have put someone who was iconoclastic into that position three years ago would have really upset the markets. (Yes, I know many who read this won't care, but it matters on a very basic level.)

    Now we move forward. I'd love to see a long range, really progressive economic policy enacted. But the key player here isn't really Obama, it's Reid! Eliminate the filibuster and things happen.

    •  That market drop yesterday (1+ / 0-)
      Recommended by:
      eztempo

      had more to do with events in Europe than with the US election. By the end of last week, Obama's re-election was already baked in, his victory was not a surprise, but Germany and Greece had some rough news and the markets swooned.

      If I ran this circus, things would be DIFFERENT!

      by CwV on Thu Nov 08, 2012 at 07:34:23 AM PST

      [ Parent ]

  •  Needs to be a banker (0+ / 0-)

    For the reason of all the technical stuff the SecTreas has to do, we need a banker.  

    We also need Diogenes to find us an honest banker.

  •  Let Sen. Elizabeth Warren (1+ / 0-)
    Recommended by:
    eztempo

    head up the nominating committee. After her time working on the Consumer Protection Bureau I`m sure she knows who is out there that can best balance the needs of banks and their victims.

    Politics is like driving.... (D) forward, (R) reverse.

    by Tribecastan on Thu Nov 08, 2012 at 08:02:04 AM PST

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