Channel surfing at the White House

I went to the White House Friday week for a full day listening and talking back to top White House officials with about 100 Democratic activists and organizers from California, organized by the Courage Campaign.
The White House folks seemed to listen hard. Gathered in an auditorium in the Eisenhower Executive Office Building, we heard from top staff including chief of staff Bill Daley, senior advisors David Plouffe and Valerie Jarrett, EPA chief Lisa Jackson, and Labor secretary Hilda Solis, along with other staff on specific issues. They asked us not to offer specific quotes from people, but they didn't offer up any juicy secrets or stray from the administration talking points we've all heard before.
They got an earful of what they have certainly heard before as well: like many others across the country, we wanted the president to fight harder for bolder programs to reduce unemployment and address the foreclosure crisis.
There were a series of breakout sessions on a variety of issues: immigration, lesbian and gay rights, labor and environment. But the concerns were the same. Would the president fight harder? When would he compromise and how much would he give away? I was disappointed that the White House didn't offer a breakout session on a especially critical issue for Californians: the foreclosure crisis.
According to the White House, President Obama doesn't get credit for how he hard he has fought against tough foes and and an economic crisis he didn't create. They cited his recent, trip to the bridge between Rep. John Boehner's and Sen. Mitch McConnell's districts where he channeled former president Ronald Reagan, exhorting the Republican leaders, "Help us repair this bridge."
I keep wishing President Obama would channel FDR, who thought that government could actually work with people to solve problems, instead of Reagan, who preached that government was itself the problem, and that it should be starved, shrunk and gotten out of the way.
Channeling one of Reagan's pithy phrases might be OK, but we'll never reduce unemployment right now using the Gipper's approach.
For that, we'll need the fearless, positive, can-do approach of FDR, who knew that government could help when the private sector wouldn't. He never achieved his goal, according to William Leuchtenberg, in Franklin D. Roosevelt and the New Deal. That was to put ALL unemployed Americans in the Depression to work. His programs only created jobs about a third of them, but not for lack of trying.
Not all of his program was so simple, but some of it was. For example, he gave unemployed white-collar workers jobs teaching people to read.
While he didn't face the monolithic, intransigent opposition President Obama faces in Congress, he offered a bold and pragmatic vision that included vilifying the bankers whose wild speculation threw the country into Depression, and acknowledging that the country was a in a deep crisis that would require dramatic, sustained government action.
Measuring Obama's Jobs Act by the standard of what FDR was able to accomplish, you can see how his proposal falls short. If Republicans passed it whole, which is unlikely, it would create at most 1.9 million jobs, providing work for nowhere near one-third of the nation's unemployed.
Obama's plan appears to be motivated by fear - fear of failure, fear of Republican rejection, fear of alienating independent voters, when what we need is audacity.
It does not seem to be motivate by an audacious vision of government action that would actually get the country back to work.

The jobs plan still might not pass, but what people are hungry for, more than bipartisanship, is that audacious vision that Obama promised and FDR delivered.
Has President Obama been so busy channeling Reagan that he forgot what FDR said about fear?
Mr. President, tune in to the right channel!

Martin Column / Outrage / Uncategorized - 09/26/2011

Bold Lite

Maybe President Obama's jobs plan will succeed in making congressional Republicans look bad before the 2012 election, especially if they reject it and demonize it as another socialist plot.

But even in the unlikely event that the congressional Republicans pass it whole, would the president's $440 billion grab bag offer significant solutions to Main Street’s most pressing problems – reducing the unemployment rate and halting the foreclosure crisis?

Probably not.

It’s true that the president and his administration did not dig the deep economic hole the country is in. And the president deserves some credit for stepping out of Washington’s deficit obsession bubble just long enough to recognize that nothing the government has done so far has been enough to lift those outside Wall Street out of that hole – the worst economic downturn since the Great Depression.

But throughout his administration, and again last night, he has not offered big enough shovels, to dig us out of it.

As Paul Krugman [who labels the plan “a lot better than nothing”] points out, the collapse of the housing bubble blew a  $1 trillion a year hole in the economy, a hole that last night’s jobs plan won’t come close to filling.

But a comparison of the jobs plan’s $440 billion price tag with the unsuccessful $16 trillion bank bailout suggests its relative timidity. Remember that the federal government handed over that money to the bankers with no strings attached and no questions asked.

While the administration likes to tout the bank bailout’s success by bragging that most of the money has been repaid, by its most important measure – ensuring that the banking system helped restore the Main Street economy - it remains a costly failure.

Still you have to at least acknowledge that the bank bailout was a bold scheme. The same can’t be said for the American Jobs Act, which as the president stressed, was a collection of non-controversial proposals that even corporate Republicans have endorsed in the past.

Call it Obama’s “bold lite.”

Yes, it was bolder than what the president has suggested since the original $700 billion stimulus. It includes $240 billion of tax cuts and about $200 billion in infrastructure spending and aid to local governments, along with regulatory review, a vague housing scheme, plus a significant new round of budget cuts to pay for it, including unspecified threats to Medicare.

According to an estimate by Economic Policy Institute, the new plan, if passed whole, would create 2.6 million new jobs over the next several years and prevent the loss of another 1.6 million jobs.

That’s not chopped liver – but the country is still staggering under the weight of persistent 9 percent unemployment, with 14 million Americans unemployed, another 8.8 million working part-time but seeking fulltime work, and another 2.6 million who don’t show up in unemployment numbers because they’ve given up looking for work. In addition, we face a continuing foreclosure crisis and the threat of future budget cuts.

While I hope that the congressional Republicans don’t just decide to block the proposal, experience suggests that they are stuck on that strategy as a way to undermine the president. Will “a lot better than nothing” be good enough to help millions of Americans for whom the recovery has only been a mirage? Or is the president setting himself up, and the rest of us, for another round of dashed hopes and failure?

Uncategorized - 09/10/2011

The Neanderthals and the Cave-Man

With 63% of Americans envisioning an apocalyptic future in which wages drop, homes devalue, costs soar and government becomes irrelevant, a new film considers what happens when the angry masses take to the streets. I’m talking about “Before the Planet of the Apes,” James Franco’s latest flick.

I found myself sympathizing with the beleaguered apes, genetically engineered to want more of the American dream but suppressed and betrayed by the corporate fat cats, until finally an outraged ape mob busts loose and seizes the streets of San Francisco. If the intent was to conjure a metaphor, it failed right there: so far, the middle class in this country remains a silent, if not somnolescent, majority.

On the other hand, the nation is deep into a depressing era of Paleolithic Politics.

Neanderthals still walk the earth, as proven by Texas Governor Rick Perry – so retrograde in his views, so far removed from the consensus view of what America stands for, that the comparison might actually be an insult to the Neanderthals. According to a review of his “thinking” in the New York Times, Perry believes that old people should work till they die or live in abject poverty: he considers Social Security a disease and a fraud. Global warming? Fiction…. (just like that crazy theory that a big asteroid killed off his buddies, the Dinosaurs, and led to the Ice Age). Gays? Don’t get the Texas tough guy started.  Presumably they’d be in for the same treatment Perry alluded to when, speaking of Fed Chairman Ben Bernanke, he said, “we would treat him pretty ugly down in Texas.”

Who will shine the fierce light of five thousand years of knowledge, humanity and grace upon such as he?

Not, unfortunately, the Cave Man. As Drew Westen explained in the single most perceptive assessment of our President I have read, Obama doesn’t grasp “bully dynamics — in which conciliation is always the wrong course of action, because bullies perceive it as weakness and just punch harder the next time.” There seems to be no line in the sand that Obama will not at once retreat from, whether it is being forced to wait an extra day to address Congress, or any of a dozen key campaign pledges that inspired so many millions to vote for him. Last week, he caved on protections against ozone pollution developed by his own administration that were meant to safeguard our kids’ health. Before that, he caved to  lobbyists and approved a $7 billion intercontinental tar sand pipeline – a bailout for the energy industry that is guaranteed to become a taxpayer boondoggle. Remember when Mr. Obama said he would only support a budget bill that eliminated gratuitous tax cuts for the super-wealthy? Or allow consumers to select a non-profit health care plan rather than force people to buy a private plan from insurance companies at an unregulated price? Law professor Elizabeth Warren, one of the few people in this country capable of protecting consumers against greed-driven banks and credit card companies, was the obvious choice to head the new Consumer Financial Protection Bureau – it was her idea to create it – until Wall Street vetoed her appointment by Obama.

Asked to respond to Perry’s intemperate comments, the President issued this gentle rejoinder: “You know, Mr. Perry just got in the presidential race and I think that everybody who runs for president probably takes them a little bit of time before they start realizing that this isn't like running for governor or running for senator or running for Congress, and you've got to be a little more careful about what you say. But I'll cut him some slack. He's only been at it a few days now.”

When he ran for President, Obama promised to bring a bipartisan spirit to D.C. This is one pledge he certainly kept. But the Republican opposition in Congress wanted none of it; their goal is to deny Obama any claim of success on any issue. They are after the Presidency in 2012.

This isn't some college debate. This is a fight over the future of our country. Obama is in it. He needs to fight back.

Congress / Harvey Column / Uncategorized - 09/07/2011

D.C. Disconnect: It's Just a JOBS Recession

According to one of the pontificators on NPR’s Marketplace, the economy is actually fine, we’re just in a “jobs recession.”

Now I feel better.

This is what passes for insightful commentary among the media elite on the day that unemployment shot back up to 9.2 percent.

“If you’re rich, it’s great,” says Felix Salmon, Reuters columnist. “But if you’re a working person it’s terrible.”
As for President Obama, he reacted to the terrible jobs report by saying: “We still have a long way to go.”

Except he shows no inclination to go there.

He’s wrapped up in the Republican austerity agenda so tight he can’t find his way to suggest anything to reduce unemployment.

He meekly suggested that reducing the deficit would help create jobs, though most economists acknowledge such cuts will hurt the economy – and the unemployed.

We all know that President Obama needs to raise $1 billion for his presidential campaign, and Republicans are falling over themselves to kill financial reform in their efforts to woo Wall Street. You have to admire the Republicans' focus: they don't give a damn about the economy, they only care about getting rid of Obama.

But both Obama and the Republicans they must be counting on only the rich voting.

The day before the jobs report, Obama’s top political adviser told Bloomberg News that the unemployment rate wouldn’t hurt Obama’s reelection chances. Obama adviser David Plouffe also asserted that people thought that the economy was getting better, based on anecdotal evidence.

Here’s what Plouffe had to say:

“You see, people’s — people’s attitude towards their own personal financial situation has actually improved over time. You know, they’re still concerned about the long-term economic future of the country, but it’s things like “My sister was unemployed for six months and was living in my basement and now she has a job.

There’s a — a “help wanted” sign. You know, the local diner was a little busier this week. Home Depot was a little busier. These are the ways people talk about the economy.”

Either Plouffe is drinking his own Kool-Aid or thinks he can play off the worst economic downturn since the Great Depression as a minor dip.

As emptywheel points out on Firedoglake, the measures of consumer confidence don’t agree with Plouffe’s blithe assessment. As emptywheel suggests, if they expect voters to keep them in their jobs, Plouffe, Obama and the rest of the administration need to get out of their bubble and start listening “to the pain of real people.”

Martin Berg

 

Around the Web / Martin Column / Uncategorized - 07/08/2011

“If We Build It, He Will Come”

Washington has become Wall Street’s “field of dreams.” There, the money conglomerates engage in their beloved sport of financial speculation, cheered on by a small but powerful group of public officials who have sold out the rest of the country.

Deregulation was a home run for the financial industry. Wall Street’s friends in Washington sacked the rules of the game, unleashing the hedge funds, banks, investment firms, insurance companies and other speculators who made billions before the crash, then got billions more from the taxpayers after the crash.

Meanwhile, as today’s New York Times points out, almost nothing has been done about “derivatives,” the virtual technology for the speculation that drove our economy into the dugout three years ago. Federal agencies that were supposed to issue new regulations to prevent another debacle have been tied up in knots by Wall Street lawyers.

Jobless and fearful for their kids’ future, people are furious about what happened.  But it was always going to be a daunting task to mobilize the public behind the necessary reforms when they are so complex, and anything drafted to appeal to directly to Americans’ wallets – say, by providing a cap on credit card interest rates, or low-rate mortgages, or other forms of financial relief – would have inspired the financial industry to retaliate with nuclear weapons. Neither the President nor anyone in Congress were willing to start that fight, principled as it would have been.

So it has all come down to Elizabeth Warren, the brainiac Harvard law professor who suggested, in a law review article in 2005, that Congress create a new federal agency with the mission of protecting consumers against false advertising, misleading contracts and the general thievery of the financial industry.  Democrats proposed the agency as part of the Wall Street reform legislation in 2009, and after the industry thought they had whittled it down to something they could easily live with – or simply get around – Congress created the Consumer Financial Protection Bureau and the President signed it.

Warren was the obvious person for the job, and almost immediately Americans began calling on President Obama to nominate her for the post.

What Wall Street didn’t realize at first is that it is way, way easier for Americans to get behind a human being than a thousand-page piece of legislation that has been lawyered and lobbied into mush. America has become a celebrity-driven culture, and while Elizabeth Warren is no Lady Gaga, she is one of a small number of outsiders that have occasionally busted up the D.C. establishment – just as Ralph Nader did in the 1970s, and Jimmy Stewart fictionally did in the Frank Capra movie “Mr. Smith Goes to Washington.”

Whether President Obama will nominate Warren to the position has become the defining question of his Presidency for millions of Americans, especially those who voted for "change we can believe in" in 2008.

When confronted with demands by civil rights leaders to take action against racial discrimination in the late 1930s, President Franklin Roosevelt’s legendary retort was “make me do it.” Whether he ever said that, the strategy he suggested is literally page one of the best manual for citizen empowerment and political organizing.

Let’s put it in more contemporary terms. President Obama has made it clear he doesn’t want to nominate Warren. It’s just another fight he’d rather not have. He embraces consensus, not controversy.

But the President has to know she’s the best person for the job. So the burden is on Americans to make it impossible for him not to nominate her. Part of that means punishing the people who are working against her – members of Congress, and those in the Administration – because they are doing Wall Street’s dirty work. These are the same people who let Wall Street plunder our nation and then bailed Wall Street out with our money.

My guess is, we can make Obama do it.

Consumer Financial Protection Agency / Harvey Column / Outrage / President Barack Obama / Uncategorized - 06/22/2011

Billion-Dollar Campaign Bus Leaves Unemployed Behind

Congress and the president threw the long-term unemployed under the bus last year in the deal to extend the Bush era tax cuts for the wealthiest Americans.

As the president and his fellow politicos revv up his re-election campaign bus, are they now poised to run over the 99ers, as the long-term unemployed are known?

The head of the Congressional Black Caucus, Rep. Emmanuel Cleaver, appears ready to concede without a fight that the cost of extending unemployment benefits to the 99ers is “prohibitive.”

Two members of Cleaver’s caucus, Reps. Barbara Lee and Bobby Scott have proposed H.R. 589 to fund some benefits for the long-term unemployed.

Once again, Congress appears to be unwilling to find the $14 billion to extend unemployment compensation for the more than 1 million Americans out of work for at least 99 weeks.

President Obama seems more preoccupied with fighting for the $1 billion he says he will need for his reelection campaign.

How much could one of those 99ers contribute to the president, or anybody’s political campaign, for that matter?

That’s what occurred to me when I read who Obama – the man who at one time was supposed to transform American politics – had chosen to run his campaign to keep his job.

That would be Jim Messina, one of the undisputed experts at raising massive corporate campaign cash, a former staffer for Sen. Max Baucus, one-time head of the one Senate’s Finance Committee and one of the top vacuums of special interest contributions ever, according to Public Citizen.

So much for the grass roots that got the president where he is today. He’s dancing with Wall Street, big pharm and the insurance industry now. Messina apparently takes a dim view of the grass roots activists and their issues, which tend to clog up his vacuum cleaner.

For the corporate titans Obama will be relying on, it’s been a very, very good recovery.

For a lot of the grass roots folks who walked precincts and made phone calls in 2008, not so much. They’ve lost jobs, health insurance, homes, savings, pensions, and security.

Minorities have been especially hard hit, USA Today reports, by a “dual system” of finance. More than 20 percent of African-Americans and Hispanics will lose their homes in the present housing crisis, the Center for Responsible Lending contends.

Meanwhile the long-term unemployed, many of them older workers, face high hurdles reentering the workforce. Younger people face their own challenges, often taking lower paying jobs when they can find employment.

The politicians may be giving up on those of us who are unemployed but we shouldn’t. Call your congressperson and demand that they find the money for H.R 589.

 

 

 

 

 

 

Martin Column / President Barack Obama / Uncategorized - 04/05/2011

Cuomo report on bonuses: No rhyme or reason

http://www.oag.state.ny.us/media_center/2009/july/pdfs/Bonus%20Report%20Final%207.30.09.pdf

NO RHYME OR REASON:

The Heads I Win, Tails You Lose I Bank Bonus Culture
Andrew M. Cuomo

Attorney General

State of New York

NO RHYME OR REASON:
The Heads I Win, Tails You Lose I Bank Bonus Culture
Through various inquiries, the New York State Attorney General's Office has been examining the causes of last year's economic downturn. We have reviewed the failures of the credit rating agencies, the role of government regulators, the flaws of the credit default swap market, and the effects of over-leverage and fraud in the housing and mortgage markets, among others.

As part of this review we have also been examining the compensation structures employed by various banks and firms. Accordingly, over the past nine months this Office has been conducting an investigation into compensation practices in the American banking system. We have reviewed historic and current data on numerous banks' compensation and bonus plans. We have taken testimony from participants in all aspects of,the process, including bank executives who set and administer the compensation process, members of boards of directors who review company salary and bonus structures, compensation consultants who advise the companies, and the recipients of bonuses.
As one would expect, in describing their compensation programs, most banks emphasize the importance of tying pay to performance. Indeed, one senior bank executive noted recently that individual compensation should hot be set without taking into strong consideration the performance of the business unit and the overall firm. As this executive put it, "employees should share in the upside when overall performance is strong and they should all share in the downside when overall performance is weak."
But despite such claims, one thing is clear from this investigation to date: there is no clear rhyme or reason to the way banks compensate and reward their employ~es. In many ways, the past three years have provided a virtual laboratory in which to test the hypothesis that compensation in the financial industry was performance-based. But even a cursory examination of the data suggests that in these challenging economic times, compensation for bank employees has become unmoored from the banks' financial performance.
Thus, when the banks did well, their employees were paid well. When the banks did poorly,
their employees were paid well. And when the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well. Bonuses and overall compensation did not vary significantly as profits diminished.
An analysis of the 2008 bonuses and earnings at the original nine TARP recipients illustrates the point. Two firms, Citigroup and Merrill Lynch suffered massive losses of more than $27 billion at each firm. Nevertheless, Citigroup paid out $5.33 billion in bonuses and Merrill paid $3.6 billion in bonuses. Together, they lost $54 billion, paid out nearly $9 billion in bonuses and then received TA~ bailouts totaling $55 billion.
For three other firms - Goldman 8achs, Morgan Stanley, and JP. Morgan Chase - 2008 bonus payments were substantially greater than the banks' net income. Goldman earned $2.3 biHion, paid out $4.8 billion in bonuses, and received $10 billion in TARP funding. Morgan Stanley earned $1.7 billion, paid $4.475 billion in bonuses, and received $10 billion in TARP funding. JP. Morgan Chase earned $5.6 billion, paid $8.69 bil1ion in bonuses, and received $25 billion in TARP funding. Combined, these three firms earned $9.6 billion, paid bonuses of nearly $18 billion, and received TARP taxpayer funds worth $45 bil1ion. Appendices A and B, attached hereto, provide further information on the 2008 earnings, bonus pools, and TARP funding for the nine original TARP recipients. We note that some ofthe nine recipients maintain that they did not request or desire TARP funding. Other banks, like State Street and Bank of New York Menon, paid bonuses that were more in
line with their net income, which is certainly what one would expect in a difficult year like 2008;
For example, State Street earned $1.8 billion, paid bonuses totaling approximately $470 million, and received $2 billion in TARP funding. Thus, the relationship between performance of the firms and bonuses varied immensely and the bonus incentive system does not appear to have been tethered to any consistent principles tying compensation to performance or risk metrics.
Historical financial filings support the same conclusions. At many banks, for example,
compensation and benefits steadily increased during the bull market years between 2003 and 2006. However, when the sub-prime crisis emerged in 2007, followed by the current recession, compensation and benefits stayed at bull-market levels even though bank performance plummeted. For instance, at Bank of America, compensation and benefit payments increased from more than $10 billion to more than $18 billion in between 2003 and 2006. Yet, in 2008, when Bank of America's net income fell from $14 billion to $4 billion, Bank of America's compensation payments remained at the $18 billion level. Bank of America paid $18 billion in compensation and benefit payments again in 2008, even though 2008 performance was dismal when compared to the 2003-2006 bull market. Similar patterns are clear at Citigroup, where bull-market compensation payments increased from $20 billion to $30 billion. When the recession hit in 2007, Citigroup's compensation payouts remained at bull-market levels - well­ over $30 billion, even though the firm faced a significant financial crisis. Appendix C, attached hereto, provides further historical data.
In some senses, large payouts became a cultural expectation at banks and a source of competition among the firms. For example, as Merrill Lynch's performance plummeted, Merrill severed the tie between paying based on performance and set its bonus pool based on what it expected its competitors would do. Accordingly, Merrill paid out close to $16 billion in 2007 while losing more than $7 billion and paid close to $15 billion in 2008 while facing near collapse. Moreover, Merrill's losses in 2007 and 2008 more than erased Merrill's earnings between 2003 and 2006.
Clearly, the compensation structures in the boom years did not account for long-term risk, andhuge paydays continued while the firm faced extinction.
Thus, rather than abiding by steady principles to guide compensation decisions year in and year out, bank executives did just the opposite by delivering high compensation every year. For example, testimony from the head of Merrill Lynch's compensation committee revealed that in 2007, Merrill changed its compensation rationale resulting in huge bonuses in it difficult year:
Q: In 2008 was Merrill Lynch looking at the bonuses as a percent of revenue?
A: No. In 2007 we diverted from that for reasons. We set out in a proxy that Merrill had
suffered substantial losses largely related to one unit of the corporation. Overall financial
performance is usually a key ingredient. We had to balance that with the need to pay our
employees in units that performed....
Q: Did there come a time in 2008 when you revisited that approach that you need to consider
having bonuses in some way reflect the economic performance of Merrill year to date?
A: I think we always looked at financial performance, but [beginning in 2007] I think we
thought it would jeopardize the long-term health of the firm - and certainly later jeopardize the franchise value of Bank of America - if we didn't pay people who performed and contributed for their performance in the face oflarge losses on legacy assets in some units....] . The information contained in the three appendices attached hereto set out, in stark terms, the failure of the compensation structures at many of our nation's largest financial institutions to follow any objective and consistent principles. To the contrary, what these statistics portray is an ad hoc system that does not come dose to meeting the goal of having employees share in the upside and the downside of their firm's performance. We emphasize that the problems we have found relate to problems with banking compensation system-wide and should not be taken as criticism of any particular individual's conduct.
We recognize, of course, that there can be situations where the distribution of profits to
employees who created real profits would be appropriate even though the overall firm may have lost money. This might be the case, for example, where one division of a firm earned large profits but another division lost profits. A principled and consistent approach would, however, balance the need to reward and retain those who created profits with the need for bonuses to reflect the overall performance of the firm. In any event, our investigations have shown numerous instances where large bonuses were paid to individuals in money-losing divisions at firms who saw either substantially reduced profits or losses in 2008.
In sum, as we seek to learn lessons from this economic crisis and repair the damage it has
wrought, it will be vital to develop and implement sound principles and rationales for executive compensation and bonuses that promote sustainable and rational economic growth. The repeated explanation from bank executives that bonuses are tied to performance in a manner designed to promote such growth does not appear to be accurate. Indeed, our investigation suggests a disconnect between compensation and bank performance that resulted in a "heads I win, tails you lose" bonus system. In other words, bank compensation structures lacked consistent principles and tended to result in a compensation system that was all "upside."

The private market place is, and should be responsible for setting compensation structures.

However, compensation packages should be designed to promote long-term, sustainable growth and actual increases in value. This would drive firms towards decision-making that promotes long-term actual growth and performance rather than the dangerous combination of short-term booked profits and blow-up deferral caused by the current bonus culture. Moreover, if market participants begin following sounder and more principled bonus systems, firms would be less susceptible to the "poaching" of their employees by other firms offering unreasonably large compensation packages. Such poaching has too often resulted in irrational bonus bidding wars that harm the entire industry by forcing firms to continually increase bonus levels and leading to a compensation system that is simply a one-way ratchet up.

This rationalization of the compensation and bonus system must be accomplished now. Hopefully, the private sector sees the problem and addresses it quickly. The private sector is the appropriate forum for such reform, and some firms have already taken steps in the right direction.

If the private sector does not act, such reform should be discussed as part of the federal regulatory reform effort, and, where appropriate, taken into account by the Obama Administration's pay czar.

APPENDIX A
-,
TARP RECIPIENTS' 2008 BONUS CHART
Below is a chart of the original nine TARP recipients for 2008 highlighting each banks earnings/losses, bonus pool, number of
employees, earnings per employee, bonus per employee, amount ofTARP funds received and the amount of bonus payments in excess
of $3 million, $2 million and $1 million.
:::$2
M__:::~lM·
Bank of America $4,000,000,000 $3,300,000,000 243)000 $16,461 $13,580 $45 B 28 65 172

.. Bank of New York Mellon $1,400,000,000 $945,000,000 42,900 $32,634 $22,028 $3 B 12 22 74

Citigroup, Inc. ($27,700,000,000) $5,330,000,000 322,800 ($85,812) $16,512 $45 B 124 176 738

Goldman Sachs Group $2,322,000,000 $4,823,358,763 30,067 $77,228 $160,420 $10 B 212 391 953

,J.P. Morgan Chase & Co.. $5,600,000,000 $8,693,000,000 224,961 $24,893 $38,642 $25 B >200 1,626

-
I,Merrill Lynch ($27,600,000,000) $3,600,000,000 59,000 ($467,797) $61,017 $10 B 1~9 696
Morgan Stanley $1,707,000,000 $4,475,000,000 46,964 $36,347 $95,286 $10 B 101 189 428
-
'State Street Corp. $1,811,000,900 $469,970,000 2~.475 $63,600 $16,505 $2 B 3 8 44
~Well§Fargo & Co:. _ $42,933,000,000) $977,500,000 281,000 ($152,786) $3,479 $25 B 7 22 62
* Wells Fargo & Company's 2008 losses include Wachovia's 2008 losses.
5
APPENDIX B
TARP RECIPIENTS' 2008 COMPENSATION SUMMARY
WITH BONUS BREAKDOWN
Below is a summary of the original nine TARP recipients highlighting the total amount of
TARP funds received by each bank, the total 2008 earnings, the total 2008 bonuses, the number of
employees receiving a bonus over a $1 mil1ion, the total number of employees and a breakdown of
the bonus' payments.
. 1. Bank of America
TARP: $45 billion ($15 billion on 10/28/08 under the Capital Purchasing
Program; $10 billion on 1/9/09 under the Capital Purchasing
Program [for Merrill Lynch]); $20 billion on 1/16/09 under the
Targeted Investment Program (1/16/09 Treasury and other
government organizations agrees to backstop $118 billion in
assets)
2008 Earnings: $4.0 billion, or $0.55 per diluted common share.
2008 Total Bonuses: $3.33 billion in cash and equity ($2.9 billion of the mixed cash and
equity bonuses were discretionary and $337 million of the mixed
cash and equity bonuses were guaranteed)
172 employees: at least $1 million
Total Workforcel: 243,000
BODUS Breakdown
.The top four recipients received a combined $64.01 million.
The next four bonus recipients received a combined $36.85 million.
The next six bonus recipients received a combined $31.39 million.
Four individuals received bonuses of $1 0 million or more and combined they received
$64.01 million.
8 individuals received bonuses of $8 million or more.
1 All Workforce numbers were taken from the companies' l(}K's for the year 2008.
6

10 individuals received bonuses of $5 million or more.
28 individuals received bonuses of $3 million or more.
65 individuals received bonuses of $2 million or more.
Overall, the top 28 bonus recipients received a combined $183.16 million.
2. Bank of New York Mellon
TARP: $3 billion
2008 Earnings: $1.4 billion, or $1.20 per diluted share.
2008 Total Bonuses: $945 million
74 employees: at least $1 million
Total Workforce: 42,900
Bonus Breakdown
The top five executives received no cash bonuses.
The remaining 12 members of the 17 member "Executive Committee" received a
combined $16 million, which is an average bonus of $1 ,333,750 a person.
Other employees, totaling 30,521 individuals, received a combined $928.57 million,
which is an average bonus of $30,424 a person.
12 individuals received bonuses of $3 million or more.
22 individuals received bonuses of $2 million or more.
3. Citigroup, Inc.
TARP:     $45 billion ($25 billion on 10/28/08 underthe Capital Purchasing
Program; $20 billion on 12/30/08 under the Targeted Investment
Program) (11/23/08 Treasury and other goverrunent organizations
agrees to backstop $306 billion in assets)
7

2008 Net Losses: $27.7 billion, or $5.59 per share.
2008 Total Bonuses:     $5.33 billion in cash and equity ($4.6 billion of the mixed cash and
equity bonuses were discretionary and $704 million of the mixed
cash and equity bonuses were formulaic)
738 employees: at least $1 million
Total Workforce: 322,800
Bonus Breakdown
11 executives received a combined $77.25 million in cash, def~rred cash, performance
vesting stock, and performance priced options.
The Senior Leadership Committee (excluding members who are also executives)
received a combined $126.26 million in cash, deferred cash, and equity.
The top four recipients received a combined $43.66 million.

The next four bonus recipients received a combined $37.47 million.

The next six bonus recipients received a combined $49.81 million.

Three individuals received bonuses of $1 0 million or more and combined they received
$33.88 million.
13 individuals received bonuses of $8 million or more.
44 individuals received bonuses of $5 million or more.
69 individuals received bonuses of $4 million or more.
124 individuals received bonuses of$3 million or more.
176 individuals received bonuses of $2 million or more.
Overall, the top 124 bonus recipients received a combined $609.10 million.
4. Goldman Sachs Group, Inc.
TARP:     $10 billion
8

2008 Earnings: $2.322 billion, or $4.47 in diluted earnings per common share
2008 Total Bonuses: $4.82 billion ($2.24 billion in cash)
oemployees received more than $884,193 in cash, but combined
cash and equity:
953 employees: at least $1 million
Total Workforce: 30,067
Bonus Breakdown
The top four recipients received a combined $45.90 million.

The next four bonus recipients received a combined $40.81 million.

The next six bonus recipients received a combined $56.40 million.

6 individuals received bonuses of $1 0 million or more and combined they received
$67.70 million.
21 individuals received bonuses of $8 million or more.
78 individuals received bonuses of $5 million or more.
95 individuals received bonuses of $4 million or more.
212 individuals received bonuses of $3 million or more.
391 individuals received bonuses of $2 million or more.
Overall, the top 200 bonus recipients received a combined $994.68 million.
5. J.P. Morgan Chase & Co.
TARP: $25 billion
2008 Earnings: $5.6 billion, or $1.37 per share
2008 Total Bonuses: $8.693 billion ($5.908 billion in cash)
9

1,626 employees: at least $1 million
Total Workforce: 224,961
Bonus Breakdown
The top four recipients received a combined $74.80 million.
The next four bonus recipients received a combined $49.18 million.
The next six bonus recipients received a combined $60.96 million.
Ten individuals received bonuses in cash and equity of $1 0 million or more and
combined they received $145.50 million.
29 individuals received bonuses of $8 million or more.
84 individuals received bonuses of $5 million or more.
130 individuals received bonuses of $4 million or more.
Over 200 individuals received bonuses of $3 million or more.
Overall, the top 200 bonus recipients received a combined $1.119 billion.
6. Merrill Lynch
TARP: $10 billion (was never drawn down by Merrill Lynch; instead, it
was given to Bank of America on 1/09/09)
2008 Net Losses: $27.6 billion, or $24.82 per diluted share
2008 Total Bonuses: $3.6 billion
696 employees: at least $1 million
Total Workforce: 59,000
Bonus Breakdown
The top four recipients received a combined $121 million.

The next four bonus recipients received a combined $62 million.

10

The next six bonus recipients received a combined $66 million.

Fourteen individuals received bonuses of $1 0 million or more and combined they

received $250 million.

20 individuals received bonuses of $8 million or more.

53 individuals received bonuses of $5 million or more.

149 individuals received bonuses of $3 million or more.

Overall, the top 149 bonus recipients received a combined $858 million..
7. Morgan Stanley
TARP: $10 billion
2008 Earnings: $1.707 billion, or $1.45 in diluted earnings per share
Total Bonuses: $4.475 billion
428 employees: at least $1 million
Total Workforce: 46,964
Bonus Breakdown
The top four recipients received a combined $73.04 million.

The next four bonus recipients received a combined $51.08 million.

The next six bonus recipients received a combined $59.62 million.

Ten individuals received bonuses of $1 0 million or more and combined they received

$146.80 million.

15 individuals received bonuses of $8 million or more.

40 individuals received bonuses of $5 million or more.

59 individuals received bonuses of $4 million or more.

11

10 1 individuals received bonuses of $3 million or more.
189 individuals received bonuses of $2 million or more.
Overall, the top 101 bonus recipients received a combined $577 million.
8. State Street Corp.
TARP: $2 billion
2008 Earnings: $1.811 billion, or $4.35 per diluted share
Total Bonuses: $469.97 million ($376.70 million in cash)
44 employees: at least $1 million
Total Workforce: 28,475
Bonus Breakdown
The top four recipients received a combined $17.88 million.

The next four bonus recipients received a combined $8.52 million.

The next six bonus recipients received a combined $10.30 million.

oindividuals received bonuses of $1 0 million or more.

oindividuals received bonuses of $8 million or more.

1 individual received bonuses of $5 million or more.

2 individuals received bonuses of $4 million or more.

3 individuals received bonuses of $3 million or more.

8 individuals received bonuses of $2 million or more.

Overall, the top 3 bonus recipients received a combined $15.15 million.
12

9. Wells Fargo & Co.
TARP: $25 billion
2008 Net Losses: $42.933 billion (includes losses from Wachovia)
Total Bonuses: $977.5 million
62 employees: at least $1 million
Total Workforce: 281,000
Bonus Breakdown
The Senior Executive Officers of Wells Fargo did not receive any bonuses

The top four recipients received a combined $17.29 million.

The next four bonus recipients received a combined $12.63 million.

The next six bonus recipients received a combined $16.14 million.

1 individual received a bonus of $5 million or more..

7 individuals received bonuses of $3 million or more.

22 individuals received bonuses of $2 million or more.

Overall, the top 7 bonus recipients received a combined $27.12 million.

Overall, the top 209 bonus recipients received a combined $197.75 million

13

APPENDIXC

TARP RECIPIENTS' HISTORICAL COMPENSATION & BENEFITS

AS A PERCENTAGE OF NET REVENUE & NET INCOME

Below are charts for the original nine TARP recipients from 2003 to the second quarter
2009 highlighting each bank's historical net revenue, compensation and benefits, compensation
as a percentage of revenue, net income, and compensation as a percentage of net income.
BANK OF AMERICA COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
(mil.) Net
Revenue
Compo &
Benefits
Compo %
of Revenue
Net Income Compo % of
Net Income
2003 $37,886.00 $10,446.00 27.57% $10,762.00 97.06%
2004 $49682.00 $13435.00 27.04% $13947.00 96.33%
2005 $56,923.00 $15,054.00 26.45% $16,465.00 91.43%
2006 $73 804.00 $18211.00 24.67% $21 133.00 86.17%
2007 $68,068.00 $18,753.00 27.55% $14,982.00 125.17%
2008 $73976.00 $18371.00 24.83% $4008.00 458.36%
200910 $35758.00 $8768.00 24.52% $4247.00 206.45%
200920* $32774.00 $7790.00 23.77% $3224.00 241.63%
* As reported by BAC. 10-Q not yet filed with SEC.
14

BANK OF NEW YORK COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
(mil.) Net
Revenue
Compo &
Benefits
Compo %of
Revenue
Net Income Compo %of
Net Income
2003 $4,880.00 $2,002.00 41% $1,157.00 173.03%
2004 $5 551.00 $2324.00 42% $1 440.00 161.39%
2005 $6,055.00 $2,310 or $2,549 38% or 42% $1,571.00 147.04% or
162.52%
2006 $6.838.00 $2640.00 39% $2.847.00 92.73%
2007 $11,331.00 $4,120.00 36% $2,039.00 202.06%
2008 $13 365.00 $5 115.00 38% . $1.386.00 369.05%
200910 $32060.00 $1 169.00 36% $370.00 315.95%
200920* $32 130.00 $1 153.00 36% $410.00 281.22%
Effective July 1,2007, The Bank of New York Company, Inc. and Mellon Financial Corporation
merged into The Bank of New York Mellon Corporation. Data for prior periods reflects only the
Bank of New York.
* As reported by BNY. 10-Q not yet filed with SEC.
2 2007 10-K versus 2005 10-K
15

CITIGROUP COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net
Revenue
(mil.)
Compo &
Benefits (mil.)
Compo %
of Revenue
Net Income Compo %of
Net Income
2003 $71,594.00 $20,719.00 28.94%* $17,853.00 116.05%
2004 $79635.00 $22934.00 28.80%* $17046.00 134.54%
2005 $83,642.00 $25,772.00 30.81% $24,589.00 104.81 %
2006 $89615.00 $30277.00 33.79% $21 538.00 140.57%
2007 $81,698.00 I $34,435.00 42.15% $3,617.00 952.03%
2008 $53,692.00 $32,440.00 60.42% $(27,684.00) N/A
20091Q $24,521.00 $6,419.00** 26.18% $1,593.00 403.95%
20092Q*** $29,969.00 $6,359.00 21.22% $4,279.00 149.61%
* Before adjustment to align with other numbers of income statements the percentages were
26.15%,26.75%, and 26.61%, respectively.
** $6,419 reported in 10-Q. $6,235 reported in Second Quarter financial release.
***As reported by Citi. 10-Q not yet filed with SEC.
.'
16

GOLDMAN SACHS COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net
Revenue
(mil.)
Camp. &
Benefits (mil.)
Camp. %
of Revenue
Net Income Camp. %of
Net Income
2002 $13,986.00 $7,037.00 50.31% $2,114.00 332.88%
2003 $16,012.00 $7,515.00 46.93% $3,005.00 250.08%
2004 $20550.00 $9652.00 I 46.97% $4553.00 211.99%
2005 $25,238.00 $11,758.00 46.59% $5,626.00 208.99%
2006 $37,665.00 $16,457.00 43.69% I $9,537.00 172.56%
2007 $45,987.00 $20,190.00 43.90% $11,599.00 174.07%
2008 $22222.00 $10934.00 49.00% $2322.00 470.89%
20091Q $9,425.00 $4,712.00 49.99% $1,814.00 259.76%
20092Q* $13,760.00 $6,650.00 48.32% $3,440.00 193.31%
* As reported by OS. 10-Q not yet filed with SEC.
17

JP MORGAN COMPENSATION & BENEFITS STATISTICS
Compensation as % o(Net Revenue & Net Income
Net
Revenue
(mil.)
Compo &
Benefits (mil.)
Compo %
of Revenue
Net Income Compo % of
Net Income
2002 $29,614.00 $10,693.00 36.11 % $2,114.00 505.82%
2003 $33,191.00 $11,387.00 34.31% $6,719.00* 169.47%
2004 $42736.00 $14506.00 33.94%. $4466.00 324.81%
2005 $54,248.00 $18,065.00 33.30% $8,483.00 212.96%
2006 $61,999.00 $21,191.00 34.18% $14,444.00 146.71%
2007 $71,372.00 $22,689.00 31.79% $15,365.00 147.67% .
2008 $67,252 22,746.00 33.82% $5,605.00 405.81%
20091Q $25,025.00 $7,588.00 30.32% $2,141.00 354.41%
20092Q** $25,623.00 $6,917.00 27.00% $2,721.00 254.21%
* Heritage JP Morgan Chase Only

** As reported by JPM. 10-Q not yet filed with SEC.

18

MERRILL LYNCH COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net Revenue
(mil.)
Compo &
Benefits
(mil.)
Compo % of
Revenue
Net Income Compo % of
Net Income
2003 . $19,548.00 $9,814.00 50.20% $3,836.00 255.84%
2004 $21 500.00 $10599.00 49.30% $4436.00 238.93%
2005 $25,277.00 $12,314.00 48.72% $5,116.00 240.70%
2006 $33,781.00 $16,867.00 49.93% $7,499.00 224.92%
2007 $11,250.00 $15,903.00 141.36% ($7,777.00) N/A
2008 ($12,593.00) $14,763.00 N/A ($27,612.00) N/A
MORGAN STANLEY COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net
Revenue
(mil.)
Compo &
Benefits
(mil.)
Compo % of
Revenue
Net Income Compo % of
Net Income
2002 $19,127.00 $7,933.00 41.48% $2,988.00 265.50%
2003 $17,621.00 $7,892.00 44.79% $3,787.00 208.40%
2004 $20,319.00 $9,320.00 45.87% $4,486.00 207.76%
2005 $23,525.00 $10,749.00 45.69% $4,939.00 217.64%
2006 $29,839.00 $13,986.00 46.87% $7,472.00 187.18%
2007 $28,026.00 $16,552.00 59.06% $3,209.00 515.80%
2008 $24,739.00 $12,306.00 49.74% $1,707.00 720.91%
20091Q $3,042.00 $2,082.00 68.44% ($190.00) N/A
20092Q* $5,400.00 $3,900.00 72.22% $149.00 2,617.45%
* As reported by MS. 10-Q not yet filed with SEC.
19
STATE STREET COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
(mil.) Net
Revenue
Compo &
Benefits
Compo % of
Revenue
Net Income Compo % of
Net Income
2003 $4,734.00 $1,731.00 36.57% $722.00 239.75%
2004 $4951.00 $1 957.00 39.53% $798.00 245.24%
2005 $5,473.00 $2,231.00 40.76% $838.00 266.23%
2006 $6311.00 $2652.00 42.02% $1 106.00 239.78%
2007 $8,336.00 $3,256.00 39.06% $1,261.00 258.21%
2008 $10693.0 $3 842.00 35.93% $1811.00 212.15%
200910 $2002.00 $731.00 36.5% $476.00 15-3.57%
200920* $2 122.00 $696.00 32.8% ($3 182.00)** N/A
* As reported by STT. 10-Q not yet filed with SEC.

** Extraordinary loss as a result of the previously reported consolidation of the ABCP conduits.

20

WELLS FARGO COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net
Revenue
(mil.)
Compo &
Benefits
(mil.)
Compo %
of Revenue
Net Income Compo % of
Net Income
2003 $28,389.00 $8,924.00 31.43% $6,202.00 143.89%
2004 $30059.00 $8446.00 28.10% $7014.00 120.42%
2005 $32,949.00 $10,455.00 31.73% $7,671.00 136.29%
2006 $35,691.00 $12,027.00 33.70% $8,420.00 142.84%
2007 $39,390.00 $13,368.00 33.94% $8,057.00 165.92%
2008 $41,897.00 $12,940.00 30.88% $2,655.00* 487.38%
20091Q $21,000.00 $6,494.00** 30.92% $3,050.00 212.92%
20092Q*** $22,500.00 $6,725.00** 29.89% $3,170.00 212.15%
* Does not include 2008 losses from Wachovia.

** Includes "salaries, commission and incentive compensation, and employee benefits," as

reported by the company.

*** As reported by Wells Fargo. 10-Q not yet filed with SEC.

21

Uncategorized - 03/14/2011

Don't Let the Bad Guys Get Away!

Hollywood loves a good chase. Last night at the Oscars, Tinsel Town sent a strong message to the rest of the country – the bad guys are getting away, and the cops aren’t even on their trail.

For a brief instant the Obama administration’s sorry efforts in holding bankers accountable for the financial collapse took center stage at, of all places, the Academy Awards.

Accepting his Oscar for “Inside Job,” his documentary about the financial collapse, Charles Ferguson used the opportunity to remind the audience of millions that not a single banker had gone to prison for fraud.

Ferguson was saying what the mainstream media has deemed a non-story, following President Obama’s lead in downplaying accountability while highlighting evidence of economic recovery.

But Ferguson joins a handful of prominent critics, including Bill Black, Simon Johnson, former Sen. Ted Kaufman, Dean Baker and Matt Stoller, who have been sending the same message in a variety of less prominent venues.

Meanwhile the president, far from insisting that his prosecutors develop fraud cases against top bankers, appoints them to top positions in his administration.

Typical is this recent column from the New York Times oped columnist Joe Nocera, who pooh-poohs the criminal aspects of the financial meltdown, blaming it on widespread “mania.”

Make no mistake; these are hard cases to make. In the 90s I covered the prosecution of savings and loan magnate Charles Keating, the poster child for bad behavior and political shenanigans for that earlier banking fiasco that also followed a rash of deregulation. Keating was convicted in both state and federal court. Though the convictions were overturned, Keating did serve four and a half years of his five-year state sentence.

Good prosecutors don't mind tough cases. They enjoy the challenge. But their bosses set their priorities and have to give them the support they need.

The Obama administration is barely even trying, afraid of alienating the bankers it’s trying to court. The cases that have been brought are either minor sideshows or they’ve been mishandled.

A local prosecutor told me that federal authorities have shown no interest in the painstaking work of building serious cases against bank executives, which would involve authorities going after minor players such as mortgage brokers, and working their way up the chain of responsibility.

In Inside Job, former New York state attorney general Eliot Spitzer has a suggestion for prosecutors – do unto the bankers what the prosecutors did unto him: go through their credit card receipts looking for evidence of illicit activity, like paying for high-priced hookers. Bust the bankers for their bad personal behavior and then obtain their cooperation in investigating financial abuse.

It may work; it may not. But at least prosecutors wouldn’t be sitting on their hands. They’d be doing their jobs – aggressively going after the bad guys.

 

 

Around the Web / Martin Column / Uncategorized - 02/28/2011

Obama Visits the Nasty Neighbor

President Obama paid a call on the U.S. Chamber of Commerce a few days ago. No organization has done more to obstruct and derail the president's policy agenda: on behalf of the massive industries that fund its $200 million budget, the Chamber fiercely opposed health care reform, financial reform, the Consumer Financial Protection Bureau, environmental protection, and consumer access to the courts, often at the expense of small businesses.  Last year, it killed a bill in the Senate that would have stripped big business of tax breaks when they outsource American jobs to other countries. Its litigation shop, lavishly supported by a who's who of corporate defendants in civil and criminal matters, has been remarkably successful in protecting big business in cases before the U.S. Supreme Court.  The U.S. Chamber is a highly partisan operation that will never cede an inch of ground to the President or his party.

Still, it wasn’t so much that Obama went to Chamber, or what he said when he got there, that bothered me. It was that he walked there from the White House.

The Chamber's headquarters is only three tenths of a mile from 1600 Pennsylvania Avenue, a five minute stroll across Lafayette Park. Most Americans would never consider taking the car (except maybe Angelenos).

But when the President rolls, dozens of vehicles, from ambulances and TV trucks to communications and heavily armed Secret Service vans, go with him. It's spectacle, but, as President Reagan understood, the motorcade is a potent symbol of the power and majesty of the presidency.

Going on foot to the headquarters of corporate America, Obama surrendered not merely the trappings of power but, inescapably, a measure of the dignity of his office.

A year ago, Obama hoofed it back to the White House from a speech at the Chamber. That was right after his annual physical, and Obama joked that he needed to walk off some of his cholesterol. More importantly, that was before the mid-term elections, when the President’s party got walloped, thanks in no small part to the $31.7 million the Chamber spent around the nation, 93% of which went to elect Republicans.

His latest visit wasn't exactly "hat in hand," but by the President's own reckoning it was pretty close: “I'm here in the interest of being more neighborly," Obama told his hosts. "Maybe if we had brought over a fruitcake when I first moved in, we would have gotten off to a better start.”

"I'm going to make up for it," the President promised. Some of us think he's already done plenty for big business, and not quite so much for average Americans, most of whom are struggling to survive the aftermath of the debacle on Wall Street.

Mr. Obama was careful not to completely prostrate himself before the Chamber's bigwigs. But every remark that could be considered a point of disagreement was tempered with a nod to the Chamber’s ideology. The President defended health care reform, but instead of discussing the human toll of the private insurance mess, explained that it “made our entire economy less competitive.” He warned that “the perils of too much regulation are matched by the dangers of too little,” referring to the financial crisis, but did not discuss lost jobs or homes. Instead he said, “the absence of sound rules of the road was hardly good for business.” Invoking one of John F. Kennedy’s most memorable speeches, Obama said, “as we work with you to make America a better place to do business, ask yourselves what you can do for America.” But the man who appeared before the Chamber conceived of his job far differently than he did when he asked Americans for it in 2008:  “the final responsibility of government,” President Obama told the Chamber audience, is “breaking down barriers that stand in the way of your success.”

This week’s stroll was part of the President’s Chamber charm campaign, which began in earnest with the State of the Union speech in January, when the President seemed to declare the recession over because  “the stock market has come roaring back” and “corporate profits are up.”

For one in five Americans still out of work, for the one in four homeowners whose homes are worth less than the amount they owe on their mortgages, that was a painful moment reminiscent of George Bush’s “mission accomplished” speech back in 2003 about the Iraq War. Obama spent the rest of the State of the Union on a combination of platitudes and pandering to his opponents, pledging among other things to get rid of unnecessary government regulations - one of the Chamber's perennial priorities.

There are plenty of other places the president could have gone if he was in the mood for an outing. The national headquarters of the AFL-CIO is only a few steps away from the Chamber, but he has never made that trip, as the California Nurses Association pointed out. Sadly, that would not be as controversial a venue as the President might fear: the AFL issued a joint press release with the Chamber praising the president’s State of the Union speech. Still, a visit from the president would have made a statement to the nation about the role working women and men play in what is known as the "real" economy (as opposed to Wall Street and the Money Industry). A fairly straightforward jog down Pennsylvania Avenue would have taken Mr. Obama to Consumer Watchdog's office on Capitol Hill.

We'll be watching where the President wanders to next. If you know what you are doing, and are clear about where you want to go, navigating the nation's capital isn't hard. But for newcomers who don't, it's very easy to get lost in D.C.

Harvey Column / Outrage / Uncategorized - 02/11/2011

Quotable – FCIC report

“The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire,” the report states. “The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble.”

The Financial Crisis Inquiry Commission, January,  2011

Uncategorized - 01/26/2011