A huge error that must be corrected, quickly

Lawrence H. Summers, one of President Obama's top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations....



Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.

People like Rubin, Summers and Gensler shuffle back and forth from the public to the private sector and back again, repeatedly switching places with their GOP counterparts in this endless public/private sector looting. When in government, they ensure that the laws and regulations are written to redound directly to the benefit of a handful of Wall St. firms, literally abolishing all safeguards and allowing them to pillage and steal. Then, when out of government, they return to those very firms and collect millions upon millions of dollars, profits made possible by the laws and regulations they implemented when in government. Then, when their party returns to power, they return back to government, where they continue to use their influence to ensure that the oligarchical circle that rewards them so massively is protected and advanced. This corruption is so tawdry and transparent-- and it has fueled and continues to fuel a fraud so enormous and destructive as to be unprecedented in both size and audacity-- that it is mystifying that it is not provoking more mass public rage.

Warren, a Harvard law professor and chair of the congressional oversight committee monitoring the government's Troubled Asset Relief Program (Tarp), is also set to call for shareholders in those institutions to be "wiped out". "It is crucial for these things to happen," she said. "Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade." She declined to give more detail but confirmed that she would refer to insurance group AIG, which has received $173bn in bailout money, and banking giant Citigroup, which has had $45bn in funds and more than $316bn of loan guarantees.



Warren also believes there are "dangers inherent" in the approach taken by treasury secretary Tim Geithner, who she says has offered "open-ended subsidies" to some of the world's biggest financial institutions without adequately weighing potential pitfalls. "We want to ensure that the treasury gives the public an alternative approach," she said, adding that she was worried that banks would not recover while they were being fed subsidies. "When are they going to say, enough?" she said.

Last week we wrote quite a bit about Alan Grayson's Pay for Performance Act of 2009, a law that means to end the Republican "no strings attached" bailouts of big corporations. Under Grayson's bill, the Treasure Department has oversight of compensation for companies taking taxpayer money so that there will be no more instance like $3.5 billion (of $10 billion in bailout money) going directly into the pockets of the banksters (in the form of unjustifiable "bonuses"), as happened under Bush's bailout "plan." Grayson's bill was supported by every single Democrat, including the Blue Dogs, in the House Financial Services Committee-- and two Republicans broke with the obstructionists and voted for it as well.With Republicans screaming bloody murder -- and calling for their smelling salts-- Grayson reminded the American people that "This bill will show which Republicans are so much on the take from the financial services industry that they're willing to actually bless compensation that has no bearing on performance and is excessive and unreasonable. We'll find out who are the people who understand that the public's money needs to be protected, and who are the people who simply want to suck up to their patrons on Wall Street." Grayson's bill passed by a wide margin, 247-171 , 10 Republicans abandoning their party's corporate maters to vote "yes" and, shamefully, 8 Democrats voting with the GOP, mostly reactionaries who habitually vote with Republicans on core issues-- the Walt Minnicks (Blue Dog-ID) and Harry Mitchells (Blue Dog-AZ).ButGrayson's vote came to the floor on April 1, another Blue Dog corporate whore, Melissa Bean (IL), offered an amendment meant to water down the bill for her Big Business campaign contributors. Her amendment, which was opposed by most Grayson and by the vast majority of Democrats (190)-- but, naturally enough, embraced by Republicans-- is meant "to allow institutions that enter into a payment schedule with Treasury on terms set by Treasury to no longer be subject to the bonus and compensation restrictions created by the Act." It passed 228-198 Even with the public so angry about the banksters blatantly ripping off the public and holding the economy for ransom until their self-entitled greed is sated, virtuallyRepublicans plus reactionary Democrats like Bean and her ilk, are still counting on everyone forgetting or just getting over it by the 2010 midterms. Bean doesn't represent, in the true sense of the word, the working families of Lake and McHenry counties. She represents the special interests who have lavished immense sums of money on her. The sector which would be most salubriously effected by her sneaky amendment-- finance/insurance.real estate-- has funneled $1,725,806 into her political career, far more that the average House member. And they know they can always count on her to sell out her constituents and lead like-minded Democrats across the aisle to vote with Republican shills serving the same corporate masters.Yesterday atGlenn Greenwald pointed out why we can't even turn to the executive branch for relief from Wall Street and their minions in Congress. Obama's two top economic advisors, Tim Geithner and Larry Summers are as in the pockets of Wall Street as you;d expect any Republican bucket of slime to be.Glenn accuses Summers of taking "advance bribes" from Goldman Sachs and Merrill Lynch and it would be impossible for anyone to look at the evidence and interpret it any other way. "And," Glenn reminds us, "it's paying off in spades."And it wasn't just Glenn writing about this yesterday. Thedidn't miss very clear signals from the Obama Administration that they plan to protect the banksters -- not just from angry mobs with pitchforks, but from any attempt by Congress to recoup the stolen money. They're giving in to demands from the banksters that they won't cooperate with Obama's rescue package, not even if it plunges the country into a decade of Depression, unless they get all the money they decide they are entitled to. And Openwheel in Michigan makes the point that the auto industry bondholders and investors won't budge an inch until they get theirs-- regardless of the fact that the government already funneled billions of taxpayer dollars their way-- the no strings attached kind. Apparently they believe that money is their due and not something meant to help rescue the nation.Nationalization should have been the answer months ago. It will save us a lot of money and misery if Obama makes the move tomorrow morning. The Sundayhas some shocking news -- and it makes more sense than most of what we've been hearing from Obama's economic team. Elizabeth Warren works for Congress, not for the Obama banksters, and as the TARP watchdog she's about to demand the removal of the nation's top failed banksters!

Labels: Alan Grayson, Auto Industry, Blue Dogs, bonuses for failed executives, Elizabeth Warren, executive compensation, Larry Summers, Melissa Bean, nationalization