by Karl Denninger
11/13/2008
http://market-ticker.denninger.net/archives/657-Ok-Mr.-Obama,-Time-To-Choose.html
Are you really "Change We Can Believe In"?
Are you really "Yes We Can"?
If so, here are the acts you must undertake as soon as you are sworn in, and you should announce them tomorrow so the market will stop tanking due to the lies of Mr. Paulson and Bernanke:
If you want to stabilize our markets and financial system, you must undertake all six of the above acts, and you should announce your intention to do so now, so that the markets can anticipate that the "dark ages" of obfuscation, lying and theft will stop on January 20th.
...
I agree with this Bloomberg article, so far Obama is bringing on board many of the exact same people who either created the financial crisis or have been involved some kind of corporate fraud or another. This is NOT the change we want. There are plenty of good, innovative candidates for Treasury and other financial posts - Luis Zingales at Chicago GSB, Nassim Taleb, Nouriel Roubini, Janet Tavakoli, for example. Why are the people who foresaw and understand the financial crisis being ignored in favor of those who either created it, or failed to foresee it and still don't understand it??? C'mon Obama, we didn't work so hard the past 2yrs to get you elected for this, we expect better.
http://www.bloomberg.com/apps/news?pid=20601039&sid=aNCFKvAMUQ6w&refer=home
Commentary by Jonathan Weil
Nov. 11 (Bloomberg) -- It's hard to believe Barack Obama would even think of calling this change.
Take a good look at some of the 17 people our nation's president-elect chose last week for his Transition Economic Advisory Board. And then try saying with a straight face that these are the leaders who should be advising him on how to navigate through the worst financial crisis in modern history.
First, there's former Treasury Secretary Robert Rubin. Not only was he chairman of Citigroup Inc.'s executive committee when the bank pushedbogus analyst research, helped Enron Corp. cook its books, and got caught baking its own. He was a director from 2000 to 2006 at Ford Motor Co., which also committed accounting fouls and now is begging Uncle Sam for Citigroup- style bailout cash.
Two other Citigroup directors received spots on the Obama board: Xerox Corp. Chief Executive Officer Anne Mulcahy and Time Warner Inc. ChairmanRichard Parsons. Xerox and Time Warner got pinched years ago by the Securities and Exchange Commission for accounting frauds that occurred while Mulcahy and Parsons held lesser executive posts at their respective companies.
Mulcahy and Parsons also once were directors at Fannie Mae when that company was breaking accounting rules. So was another member of Obama's new economic board, former Commerce Secretary William Daley. He's now a member of the executive committee at JPMorgan Chase & Co., which, like Citigroup, is among the nine large banks that just got $125 billion of Treasury's bailout budget.
There's More
Obama's economic crew might as well be called the Bailout Bunch. Another slot went to former White House economic adviser Laura Tyson. She's been a director for about a decade at Morgan Stanley, which in 2004 got slapped for accounting violations by the SEC and a month ago got $10 billion from Treasury.
That's not all. There's Penny Pritzker, the Obama campaign's national finance chairwoman. She was on the board of the holding company for subprime lender Superior Bank FSB. The Chicago-area thrift, in which her family held a 50 percent stake, was seized by the Federal Deposit Insurance Corp. in 2001. The thrift's owners agreed to pay the government $460 million over 15 years to help cover the FDIC's losses.
Even some of the brighter lights on Obama's board, like Warren Buffettand former SEC Chairman William Donaldson, come with asterisks. Buffett was on the audit committee of Coca-Cola Co.'s board when the SEC found the soft-drink maker had misled investors about its earnings. Donaldson was on the audit committee from 1998 to 2001 at a provider of free e-mail services called Mail.com Inc. Just before he left the SEC, in 2005, the agency disciplined the company over accounting violations that had occurred on his watch.
Telling Stories
So, by my tally, almost half the people on Obama's economic advisory board have held fiduciary positions at companies that, to one degree or another, either fried their financial statements, helped send the world into an economic tailspin, or both. Do you think any of that came up in the vetting?
Let's say we give Buffett a pass -- smart move he made, skipping the group photo-op last week in Chicago. What about the rest of them? Donaldson, for one, was chairman when the SEC voted in 2004 to let the big Wall Street banks, including Lehman Brothers Holdings Inc. and Bear Stearns Cos., lever up their balance sheets like drunks. Talk about blowing it.
And whom did Obama tap for White House chief of staff? Rahm Emanuel, the Illinois congressman who was a director at Freddie Mac in 2000 and 2001 while it was committing accounting fraud.
Ideally, this job would go to someone who can't be easily fooled. Think about it: Of all the people Obama could have chosen as his chief of staff, couldn't he have found someone who wasn't once on the board of Freddie Mac?
Renewed Confidence
The president-elect needs some new advisers -- fast. We are in a crisis of confidence in American capitalism. These aren't the right people to re-instill its sense of honor.
Many of them should be getting subpoenas as material witnesses right about now, not places in Obama's inner circle. Did Obama learn nothing from the ill-fated choice of James Johnson, the former Fannie Mae boss, to lead his vice- presidential search committee?
Does he think people like Robert Rubin or Richard Parsons will offer any helpful advice on how to stop crooked bankers or sleep-walking directors from sinking our economy? Or that they won't mistake the nation's needs for their own corporate interests? Or that the people who helped get us into our long financial nightmare have any clue how to get us out?
Obama has created hope that our nation can stand for all that is good in the world again. It's not too late to change course.
Start by scrapping this board.
Team Obama is now deciding what to do with My.BarackObama.com. I urge the team to continue growing and developing the site, and to use it to support and advocate Obama's initiatives with Congress and America.
Though Congress is Democratically controlled, I can almost guarantee there will be disagreements b/t Obama and the House or Senate on some things. Frankly, I trust Obama's erudition, due dilligence, open mindedness, integrity, and judgement much more than that of Congress. When disagreements arise and push comes to shove, I am pretty sure I'll want Obama to win them.
Directed support and advocacy from his 10 million strong My.BarackObama.com users will in many cases be enough to swing Congress Obama's way. One extremely useful addition to the site would be automatic email/fax capability, where users can upload documents to fax to a list of Congressional office fax numbers, or send emails to congressional office email addresses. I've been using Metrofax.com for this regarding financial crisis issues. It works ok, but is limited to sending 50 faxes at a time, and it's contact list entry and import features are rudimentary at best.
In a nutshell, My.BarackObama.com team should focus on providing the tools Obama's supporters need to effectively, efficiently advocate Congress in support of his initiatives.
Obama's Iraq speech is exactly the type of considered statesmanship the American executive desperately needs to return to. He's good. I'm back on the donor wagon.
I wasn't concerned about Obama changing his mind on some things, like opting out of Federal Campaign funds, or reconsidering his Iraq strategy in light of apparently improving conditions there. Both were, in my mind, justifiable, and much better than 'staying the course' despite a changing reality.
However, Obama's reversal on a Constitutional issue like FISA I just don't understand. Senator Russ Feingold and Glenn Greenwald of Salon.com clarify the implications of this bill:
I have decided to cancel my recurring monthly donation and all adhoc donations to the Obama campaign, and redirect them to the Strangebedfellows Accountability Now PAC, EFF, and ACLU:
Why I support Barack Obama:
1. He unequivocally supports Net Neutrality - keep both the government's and industry's hands off the Internet, the greatest communication medium and repository of knowledge ever constructed. Keep the Internet's playing field level, barriers to entry as low as possible, unmanipulated by any kind of power, be it government or industry.
2. Obama's background in Constitutional and Civil Rights law make him the most likely candidate to repeal the unconstitutional laws and 'signing statements' of the previous administration.
3. Obama had the judgement and foresight to realize the military, political, and financial disaster Iraq would turn out to be, and the courage to oppose it at a time when such a stance was politically difficult.
4. He is accomplished, educated, articulate, and has life experiences and family background that enable him to not only speak to all Americans, but all the world as well. America has forgotten that as the leader of the free world, and of those parts of the unfree world that want to be free, we need to lead through communication, diplomacy, example, and ethics, and NOT ignore, the rest of the world. Washington has completely forgotten what leadership is.
5. His positive, hopeful campaign (and presidency), is (would be) a much needed counter to the previous 8 years of politics-by-fear.
