March 13, 2009

Record Shows Obama Was on Board With TARP in September, and Every Bit As Socialist As Bush

ObamaNYTpic0309On March 6, in response to New York Times reporters’ questions, President Barack Obama told the paper that he is not a socialist. He or his advisers were apparently so bothered by the questions that Obama later called the Times reporters involved in an attempt to …. well, I’m not sure, because he had already supposedly denied the charge.

The best guess is that Obama and his peeps felt he needed to get in some gratuitous digs at former president George W. Bush.

Part of Obama’s phone call back to the Times including the following relative to the Troubled Assets Relief Program (TARP) under then-Treasury Secretary Henry Paulson:

I did think it might be useful to point out that it wasn’t under me that we started buying a bunch of shares of banks.

….. I just think it’s clear by the time we got here, there already had been an enormous infusion of taxpayer money into the financial system.

That’s great, except for one “little” thing: John Kerry, clearly speaking for the Obama campaign, told Chris Wallace on Fox News on September 28 of last year (HT to BizzyBlog commenter Joe C) that at the time of the first TARP deal that the bailout followed his template:

….. the four principal components of this deal, Chris, represent the exact four principles that Senator Obama laid out two weeks ago. They represent the exact principles that we put forward and almost agreed on last Thursday before politics entered into this.

….. But those principles are number one. We wanted to protect the taxpayers.
We were not going to turn billions of dollars over to any institution connected with Wall Street, given the experience of what had happened without protecting taxpayers. We have done that in this.

Secondly, we were going to limit executive compensation. We weren’t going to turn money over and have millions of dollars paid out to executives. That’s been done.

Thirdly, there’s a very important concept here about helping homeowners. There had been no talk about the homeowners. We want to keep people in their homes. This specifically helps to keep them there.

And finally, oversight. The administration came and said, “Just give us $800 billion.” And we said, “No, not given this experience,” so we’re going to give first the 250. There’ll then be a letter from the president requesting another 100, and then there’s another 350, depending on how it goes.

So I think we have accountability. We have the principles that Senator Obama offered leadership on.

Perhaps this four-principled template matched that of George W. Bush, but that’s the point. If it’s true, Bush and Obama signed on to the same thing, and he can’t possibly claim to be less socialist than Bush on the TARP topic as he explicitly did to the Times.

Maybe someone in the establishment media might notice and report not only Obama’s frequent blame-shift to Bush, but also in this case its falsehood.

That’s probably hoping for a bit much.

Cross-posted at

Look at What Well-Known Investment Firm Contributed to the DNC and Democrats and NOT Republicans in 2006 and 2008

Filed under: Economy,Taxes & Government — Tom @ 3:14 pm

Here’s something I learned while putting together this morning’s post about the withdrawal of H. Rodgin Cohen as President Barack Obama’s No. 2 at Treasury.

I noted that Cohen’s law firm, Sullivan and Cromwell, gave over $240,000 to the Democratic National Committee in the 2008 election cycle. That means that the law/lobbying firm was the ninth-largest giver to the DNC in its category. behind five financial services firms, Time Warner, National Amusements, and two other law firms. Big-name law firm Latham & Watkins was Number 11.

You won’t believe who was Number 12:


President ‘Prompter’s Self-Evident Socialism

Filed under: Economy,Health Care,Taxes & Government — Tom @ 1:52 pm

Many have covered this already, but it needs to go on the record here.

Here’s the audio of President Teleprompter’s teleprompter-free call to the New York Times (scroll to the bottom at the link) further responding to the questions of Times reporters whether he’s a socialist:

Here’s the Times’s transcript (with at least three dozen teleprompter-free “uhs” or stutters removed):

President Obama: Just one thing I was thinking about as I was getting on the copter. It was hard for me to believe that you were entirely serious about that socialist question. I did think it might be useful to point out that it wasn’t under me that we started buying a bunch of shares of banks. It wasn’t on my watch. And it wasn’t on my watch that we passed a massive new entitlement – the prescription drug plan without a source of funding. And so I think it’s important just to note when you start hearing folks throw these words around that we’ve actually been operating in a way that has been entirely consistent with free-market principles and that some of the same folks who are throwing the word socialist around can’t say the same.

Q. So who’s watch are we talking about here?

A. Well, I just think it’s clear by the time we got here, there already had been an enormous infusion of taxpayer money into the financial system. And the thing I constantly try to emphasize to people if that coming in, the market was doing fine, nobody would be happier than me to stay out of it. I have more than enough to do without having to worry the financial system. The fact that we’ve had to take these extraordinary measures and intervene is not an indication of my ideological preference, but an indication of the degree to which lax regulation and extravagant risk taking has precipitated a crisis.

I think that covers it.

There are only a few “slight” problems:

  • President ‘Prompter voted for TARP as a Senator.
  • President ‘Prompter’s current Treasury Secretary in essence ran TARP behind the scenes after it was enacted.
  • President Bush expressed regret at doing what he believed he had to do (erroneously, in my opinion) with the auto bailout (“I’ve abandoned free-market principles to save the free-market system”). President ‘Prompter supported the bailout, and expressed no similar regret.
  • Wednesday, just days after he spoke to the Times, the Washington Post reported that President ‘Prompter wants to trump Bush’s prescription-drug socialism: “Obama wants to raise $8 billion by making wealthy seniors pay more for Medicare prescription-drug coverage, an idea lawmakers roundly rejected two years ago.”

In the real world, President ‘Prompter:

  • Is as socialist as Bush admitted to being on TARP — actually moreso, because we’ve seen what’s been done to the banks, the markets, and the economy since Tim Geithner has been dealing with them.
  • Is at least as socialist as Bush admitted to being on the auto bailout, and is on the verge of running laps around him if he approves any more bailout disbursements to two obviously failing companies.
  • Whether or not he ultimately gets his way with his proposed prescription-drug revisions, he clearly wants a program that is far more socialist than the current one.
  • Is violating free-market principles far more than George W. Bush ever did (and as noted, Bush often did so with accompanying regret borne of unfortunate fear and/or gullibility and/or blackmail).

President ‘Prompter can call himself whatever he wants (he’s good at that; consider how he has consistently, opportunistically, and falsely characterized the reality of his ethnic background), but his policies are socialist virtually through and through. We will mostly individually, and surely collectively, be poorer than we should be for his initiatives and the POR (Pelosi-Obama-Reid) Economy that has been in place for roughly nine months, regardless of how quickly the economy recovers.

That really does cover it.

Obama’s Crisis of Competence

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 11:08 am

Note: This column originally appeared at Pajamas Media on Wednesday morning
under the title “A Presidential Crisis of Competence.”


They seem not to know what they’re doing.


ObamaGlassNotes0309Less than two months into this administration, three things are clear.

First, its agenda is every bit as radical as many of us expected and feared. Based on President Barack Obama’s supposedly unimportant past, there was every reason to believe that this would happen. That some Obama supporters are surprised is a “tribute” to a media elite that treated decade-plus relationships with radicals Jeremiah Wright, Bill Ayers, and others as “distractions from the real issues,” and to a McCain campaign that refused to treat Obama’s candidacy as the threat that it was, and now is.

Second, despite strong signals that he is guiding the ship of state in the wrong direction, Obama and his administration have largely refused to bow to reality. Having triumphed in the presidential campaign with marketing and misdirection, they actually believe that voters gave them a mandate to spend hundreds of billions of dollars we don’t have, and to bail out banks, companies, and homeowners without apparent limit. While the markets continue to beg to differ, Obama has been essentially indifferent.

The third clear thing is the one that has apparently blindsided Obama fans the most, but should have been the least unexpected: He and his administration seem not to know what they’re doing. Pick almost any area, and you’ll find a trail of incompetence that goes well beyond benign rookie mistakes.

The administration’s nominee vetting record has become a national joke that could take up this entire column.

Then take the economy (please). We knew before the election that Obama doesn’t understand the difference between net worth and income. His statement about “profit to earnings ratios” comes from that same well of ignorance.

I seem to recall John McCain being bludgeoned for a self-professed relative lack of economic expertise. McCain was mature enough to admit to it, and would, as in previous GOP administrations, likely have surrounded himself with knowledgeable people. But Barack Obama has surrounded himself with the likes of Tax Cheat Tim Geithner, who scares the markets almost every time he opens his mouth. Meanwhile, the new Treasury Secretary has somehow managed not to hire 14 key people he needs. Could it be that there is a shortage of qualified people standing in line to be participants in what is shaping up to be the Mother of All Train Wrecks?

Obama, as president-elect, cheered as General Motors and Chrysler received taxpayer bailouts. Apparently neither the incoming or outgoing administration considered the obvious problem that fewer consumers would buy from the two bailed-out companies either for philosophical or practical reasons (or both). That turned out to be the case in both January and February. Now GM’s auditors have “raised substantial doubt about the company’s ability to continue operations,” while both companies beg for even more.

Meanwhile, in a laugh-so-you-won’t-cry story, Geithner is heading an administration delegation that will “visit GM’s technical center in Warren, Michigan, to see car and truck models and learn about the technology being developed ….” Uh, don’t lenders usually see what’s going on at the borrower’s place before they cut the loan check? Even staunch Democrat Jim Cramer has been forced to conclude that “It’s Amateur Hour at our darkest moment.”

The administration’s foreign policy crackups may not be as obvious just yet. But unless adult supervision arrives soon, they could prove to be even more hazardous than the dangerously declining economy.

Start with the Russia-Iran missile defense saga. Step 1 was the overture: “Obama ‘ready to drop shield plans for Russian help on Iran.’” Step 2, the backhanded dismissal, followed shortly: “Medvedev rejects Obama missile defence deal”; Step 3 was the blowback, as noted by Charles Krauthammer: “The Russians have dismissed it. We end up being humiliated. We look weak in front of the Iranians, and we have left the Poles and Czechs out to dry in return for nothing.”

While supposedly making a point that this administration will “reset” relationships throughout the world, the Secretary of State’s entourage botched a Russian translation (those who cite the alleged decline in good will towards the U.S. have yet to explain why France, Canada, Germany, and other countries moved significantly to the right under Bush’s watch).

Obama recently told the New York Times that the US is not winning the war in Afghanistan, and was considering (in the Times’s paraphrase) “reach(ing) out to moderate elements of the Taliban.” The Taliban are probably already training their version of Madame Binh.

Obama infuriated the UK last week in more ways than can be counted here. Now we’re supposed to believe that the UK snubs occurred because the poor guy was “too tired,” the same lame excuse that was used to explain away his 10,000-died-in-Kansas gaffe during the presidential campaign.

If our president is indeed overwhelmed, don’t blame the job. Obama, with no previous executive experience, appears to be falling into the same trap as Democrats Clinton and Carter before him: too obsessed with detail, and failing to sufficiently delegate.

Incompetents often try to cover up their failures by attacking others and denying the obvious. This explanation would be consistent with the White House’s thin-skinned blasts at CNBC’s Cramer and Rick Santelli, and the president’s stubborn refusal to characterize his “spread the wealth” policies as what they are: socialist.

What does such a person with real power do once their incompetence becomes self-evident to most? I’m afraid we’re not that far from finding out.

One thing we do know: Obama and his peeps want to be totally in charge of health care. Feeling better now?

So Why DID H. Rodgin Cohen Withdraw as Treasury’s No. 2? Press Is Curiously Not Curious

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 7:23 am

HRodginCohenTreasuryNominee0309There seems to be a wall of silence surrounding the sudden withdrawal of H. Rodgin Cohen (pictured at right) from consideration for the Number 2 job at the Treasury Department.

The party line, according to ABC’s This Week host and former Clinton administration adviser George Stephanopoulos, is that “an issue arose in the final stages of the vetting process.” David Cho at the Washington Post reports that “two sources familiar with the matter” confirmed this, but that they “declined to identify the reason.”

Perhaps the press is not really interested in finding out that reason, or reasons. Or worse, they’ve got a pretty good idea, and they’d rather not dig; because if they don’t dig, they won’t have to tell us. Stephanopoulos appears to be giving away that he knows more than he’s willing to reveal when he writes that “Cohen has been a counsel to just about every major player on Wall Street, which perhaps complicated his nomination.”

“Perhaps”? A review of some of Cohen’s known history makes it clear that he carries quite a bit of potentially heavy baggage.

All I had to do is a Googe Web search on “Rodgin Cohen” (in quotes) to find these two items at the sixth and seventh listings:


Together, these items, plus a Wall Street Journal report relied on by, point to the logic that may have been behind Cohen’s withdrawal: Over the years, the man appears to have accumulated quite a list of bruised feelings, grudge-holding enemies, and politically problematic involvements. Taken as a whole, I believe they would have called into question not only his ability to oversee the banking and financial sectors impartially and in the country’s best interests, but also the degree of support he would have had from his own party if he were to stumble even slightly. I believe it’s possible that his nomination would have been opposed by some Democrats as well as many Republicans at at time when the last thing the Obama administration needs is a protracted and embarrassing nomination fight.

The New York Times item goes all the way back to June 11, 1989. Reporter Michael Quint’s portrayal is of a man who was on the cutting edge of a historic wave of consolidation in the banking industry, something populist Democrats and perhaps even some Republicans would have found hard to swallow in Treasury’s second-in-command:

THE LAWYER OF CHOICE: H. Rodgin Cohen; He’s the Counselor Banks Call in a Crisis

Talk with a banker about hostile takeovers and more than likely the first lawyer to be mentioned will be H. Rodgin Cohen, partner at the New York law firm of Sullivan & Cromwell.

….. With more than 13,000 banks in the country, analysts have been predicting for years that thousands will eventually be eliminated by mergers. According to Mr. Cohen, that consolidation is likely to include combinations of many large banking companies, despite studies showing that efficiency does not increase when large banks become giants.

“There is room for substantial cost savings, even if there are no economies of scale to be gained,” he said. ”They will not need two accountants, two law firms, two advertising agencies and two corporate development staffs.”

The trend toward larger mergers is likely to continue, he said, “because the difficulty of putting together a series of small deals can exceed that of a single big deal.”

Quint also recalls that Cohen was heavily involved in the negotiations to release American hostages held in Iran for 444 days from 1979 to 1981:

The Iranian hostage crisis in 1980 was a different kind of banking story. Representing Marine Midland Bank and European American Bank, he was part of what he called the ”cash-for-people” negotiations. If the banks would unfreeze Iranian deposits, the Iranians agreed to use some money to pay outstanding loans, and the remainder was to be sent to their bank accounts outside America. ”When the phone call came saying the hostages had landed, it was the most exhilarating feeling I’ve experienced,” Mr. Cohen said.

Though Cohen was no doubt working with the outgoing Carter administration during these negotiations, the Iranian regime, in what was seen as a parting personal insult to Carter, did not actually release the hostages until minutes after new president Ronald Reagan was inaugurated in January 1981. It’s not unreasonable to believe that several Democrats with long memories are more than a little displeased with Cohen’s “most exhilarating feeling.”

Cohen’s more recent work might also have posed more than a few unwanted problems for the administration, as an October 9, 2008 article at describes (bold is mine):

Fed bailouts, mergers, stake sales and bankruptcies … as Wall Street has transformed, Sullivan & Cromwell LLP chairman H. Rodgin Cohen has been there.

Alongside Wachtell, Lipton, Rosen & Katz co-chair Edward Herlihy, Cohen is easily one of the top banking M&A attorneys and as a Wall Street Journal item Thursday put it, counts “virtually all of Wall Street as his client.” He’s had a busy few months and in particular, a busy few weeks.

The piece leans heavily on that Wall Street Journal report, which appeared that same day (link will probably go to article preview; Google the article’s title, “A Lawyer for All Wall Street Navigates Tempestuous Times,” to see the whole thing). Journal reporters Matthew Karnitschnig and David Enrich paint a picture of man who may, as much if not more than anyone else, be responsible for why the banking business is in its current condition (bolds are mine):

Mr. Cohen is also in demand because he helped mold the financial system that is now under assault. He helped draft the rules that led to the emergence of powerful national banks, waged the first hostile bank takeover in the U.S. and lobbied, in the early 1990s, to expand the Federal Reserve’s power to provide the emergency loans now being employed by the government.

But Mr. Cohen’s immersion in the banking system also has at times put him in a difficult position. As he jumps from one client to the next, it is sometimes hard to tell whom he may be representing at a given moment.

In mid-September, Mr. Cohen represented Wachovia in its preliminary merger talks with Morgan Stanley. Several days later, after those talks faltered, he advised Japanese bank Mitsubishi UFJ Financial Group as it negotiated a 21% stake in Morgan Stanley.

Mr. Cohen was counseling Lehman Brothers until it sought bankruptcy protection Sept. 15, and then pivoted to represent Barclays, which ended up buying the failed investment bank’s U.S. operations. Late last month, as banks and private-equity firms rushed to examine WaMu’s books, Mr. Cohen had to choose between four clients that wanted to hire him before settling on J.P. Morgan.

“Sometimes you just have to pass” on assignments, he says. Mr. Cohen says that most of his clients have “extraordinary understanding of the circumstances.”

….. The recent troubles — which Mr. Cohen describes as his “five weeks in hell” — started when his phone rang around 11 a.m. Sept. 5. Fannie Mae needed Mr. Cohen in Washington for emergency meetings about its future with government officials including Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson. Within days, Mr. Cohen had helped broker the deal that put Fannie and Freddie into conservatorship.

With all of these entanglements, Cohen’s nomination might not have received the same “extraordinary understanding” his clients purportedly had from senators who were in essence blackmailed by Paulson and Bernanke into passing the $700 billion Troubled Assets Relief Program (TARP) last fall, and from banks who less than two weeks later were forced, with “a (figurative) gun to their heads,” to acquiesce to partial government ownership funded with that same TARP money. In light of the browbeatings bankers have received recently over executive compensation and perks, Cohen’s and his firm’s take from their work might have, and in my opinion should have, been fair game in a Senate hearing.

Given all of this, it would not be all surprising if Cohen’s problems with those he would have been charged with regulating were in some cases very personal. The most obvious potential example is in the first sentence of that October 9 Journal story: “When Wachovia Corp. ditched its merger deal with Citigroup Inc. for a rival bid from Wells Fargo & Co. last week it stunned many Wall Streeters.”

Jilted Citigroup angrily sued for $60 billion (quixotically, at least according to Steven M. Davidoff’s Dealbook Blog at the New York Times). It seems pretty unlikely that Citi’s Richard Parsons, who last night said that his bank (paraphrased by Reuters) “does not need any more capital injections from the government,” would have stood by idly if Cohen’s nomination had gone forward to hearings.

Then there’s this: Cohen’s firm, Sullivan & Cromwell, gave $241,975 to the Democratic National Committee during the 2008 election cycle. Pay to play, perhaps?

Finally, add this wild card: Given current Treasury Secretary Tim Geithner’s continued underwhelming performance, the prospect that Cohen, given his history, might actually take charge of Treasury if Geithner proves he’s not up to the task may have been too much for his financial industry adversaries to bear.

So what really is the “issue (that) arose in the final stages of the vetting process”? What I’ve covered here points to the idea that the supposedly singular “issue” with Cohen was one of basic viability that really had to do with quite a few underlying “issues.”

The establishment press’s lack of curiosity in all of this is itself quite curious. I suspect that investigation and speculation would have run rampant if a Republican president had pulled the nomination of someone like Cohen; witness the feeding frenzy that followed Bush Homeland Security nominee Bernie Kerik for several days in 2004 even after his nomination was pulled. Instead, we’re supposed to just let this Cohen thing go and move on. I would hope in light of what’s I’ve noted here that someone closer to the situation and with more resources than yours truly says, “not so fast.”

Cross-posted at