Obama's Economic Dream Team?

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By Stephen Lendman (about the author) Page 3 of 5 page(s)

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With what, short of reckless amounts of currency debasing? The alternative apparently is off the table - the fiscal sanity of letting bankruptcy be the price for financial imprudence. In other words, take the pain upfront and not let this monster of a problem drag out for a decade or longer, leave much greater wreckage in its wake, and threaten world economies with it. Geithner will apparently risk it, and even by Las Vegas standards it's a very bad bet.

It affects the entire financial industry as well as companies with high-risk debt like the auto giants. Even Warren Buffett's Berkshire Hathaway who's warned repeatedly about the problem, and this is only one among others that would challenge the most dedicated and talented of policy makers. Based on what he'll likely do, Geithner isn't one of them, but try hearing that through the din of praise for him.

It remains to be seen but he'll likely continue the same failed bailout policies, pile more debt on the current unsustainable amount, and add lots of (real estate) infrastructure fiscal stimulus for the rich. As economist Michael Hudson explains:

"To a mortgage banker, a commercial developer or real estate company is a prime customer, the bulwark of bank balance sheets. It is hard to imagine a new American infrastructure program not turning into a new well of real estate gains for the FIRE (finance, insurance and real estate) sector. Real estate owners on favorably situated sites will sell out to buyers-on-credit, creating a vast new profitable loan market for banks. The debt spiral will continue upward" and make a monster of a problem even greater.

Given how strapped state and city budgets are, "privatiz(ation) from the outset" is planned and Geithner got the job to do it. He's not for "change you can believe in" or what people voted for from Obama.

Hudson again: "The change that Mr. Obama is talking about is largely marginal to (the top 1%'s) wealth, not touching its economic substance - or its direction." He may give wage earners some relief (to pay off their bank debts), but top earners "prefer not to earn income" and rely heavily on capital gains. They try to avoid losses and when can't get the government to bail them out. Obama supports it, so expect billions more for the rich, crumbs for the many, and torrents of high-sounding platitudes to soothe them.

Hudson compares Obama to Boris Yeltsin - a giver who kept on giving "for the kleptocrats to whom the public domain and decades of wealth were given with no quid pro quo." And he's assembled the same ("anti-labor, pro-financial team") that empowered Russia's kleptocrats, let them loot the country, and for the most part keep it.

His key economic advisor, Robert Rubin, was Clinton's Treasury Secretary. After leaving, he helped manage Citigroup close to collapse where it may end up anyway since it's problems are so huge perhaps no amount of billions may save it. Now he's manipulated his protege team into top posts (including Geithner) with the rest of them profiled below.

Even the Wall Street Journal criticizes Rubin for defending his role and taking no responsibility for Citi's problems. The Journal asks:

"Why are Robert Rubin and other directors still employed? Another Sunday night, another ad hoc bank rescue" with taxpayers footing the bill. "Such a record of persistent failure suggests a larger, (perhaps) systemic management problem. If taxpayers have to risk so much to save Citigroup, then regulators should at least exert the discipline to break up this behemoth so it is never again too big to succeed, much less fail."

What the Journal didn't say is that any bank or business too big to fail is too big to exist, and anti-trust laws should never let them get this big in the first place.

As for Rubin, are his choices right for high Obama administration posts? Might they not wreck the economy the way Rubin & company hurt Citi. Worse still, were picked to do it - to suck all possible trillions out of it, then leave behind an empty hulk and mass human wreckage when they're done. Under Bush, we're well along toward it, so maybe Wall Street chose Obama to finish the job.

Lawrence Summers

Seeing how Wall Street loves him is reason enough to worry as he's slated to be Obama's chief economic advisor as head of the National Economic Council (NEC). This writer's November 10 Obama Mania article said this about him:

"From 1982 - 1983, he served on the Reagan administration's Council of Economic Advisors. Then in 1993 in the Clinton administration as Under-Treasury secretary for International Affairs and as Treasury Secretary from 1999 - 2001. Earlier from 1991 - 1993, he was chief economist for the World Bank where he authored a controversial memo stating that "the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that."

"Summers was later president of Harvard University from 2001 - 2006 where controversy again dogged him. For his contentious relations with faculty members and for suggesting that the presence of few women in upper-level science and math positions was because of innate differences between men and women. The combination led to his 2006 resignation."

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I am a 72 year old, retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.

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