Is Obama Fixing to Own Some Banks?

The other day, I suggested that Obama’s principles of government ownership sounded like they were designed for more than just GM.

There’s evidence to support that suggestion in this reasonably good David Sanger article on the GM bankruptcy.

In interviews in recent days, Mr. Obama’s economic team said it anticipated [political pressues regarding business decisions related to companies the government owns], and had moved to cut them off early.

It started right around the time of the bank stress tests,” said Rahm Emanuel, Mr. Obama’s chief of staff, in an interview on Monday. During one of the president’s daily economic briefings, Mr. Emanuel added, “he said that taking over companies like this is a big deal, and that no president has ever faced anything like this before. And he said he wanted to see some rules of the road about how the government should act” when it suddenly becomes the biggest shareholder in the market.

Mr. Obama clearly wanted protection: a set of principles he could hand to angry members of Congress, campaign contributors or executives to explain why he would not call Fritz Henderson, G.M.’s chief executive, to discuss whether an engine should be made in Saginaw or Shanghai.

The result was an interagency task force informally called “The Government as Shareholder,” headed by Diana Farrell, the deputy director of the National Economic Council and formerly the head of the McKinsey Global Institute, the research arm of McKinsey & Company.

It was Ms. Farrell’s report, delivered to the Oval Office fewer than 10 days ago, that laid out the principles that Mr. Obama described on Monday.

The White House insists the principles will apply equally to the government’s investment in the American International Group, the fallen insurer, or in Citigroup and other banks that the government has rescued. [my emphasis]

Sanger doesn’t seem to get the implication of Rahm’s comment. Rahm tells us these principles–principles the government will use with companies it owns–came up not during auto task force discussions, but during the bank stress tests.  That means the conversation about socialism how big a deal it is for the government to own companies came up in the context of owning banks, not owning car companies.

Sure, we already own an insurance company and Freddie and Fannie. Sure, maybe the reference to Citi is a very pointed reference. 

But it sure seems like these principles suggest we’re going to be owning a bank in the near future, to go along with GM and AIG.  Looks like we’re all going to get a chance to be banksters soon!!

Marcy has been blogging full time since 2007. She’s known for her live-blogging of the Scooter Libby trial, her discovery of the number of times Khalid Sheikh Mohammed was waterboarded, and generally for her weedy analysis of document dumps.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including the Guardian, Salon, and the Progressive, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse and dog in Grand Rapids, MI.

70 replies
  1. perris says:

    I think the big mistake in the first place was to simply believe banks would lend if we gave them money

    as far as I am concerned, the way to get money liquid is to make funds available for loans, period.

    a bank can either broker the loan for a pre-set profit or give the loan to another organization

    I have absolutely no idea why anyone thinks banks need to be bargained into making middle class and small business loans

  2. readerOfTeaLeaves says:

    Some months ago, Leen linked to a Frontline episode called ‘Inside the Meltdown’ on PBS. I ended up watching it several times, and one of the intriguing bits of info was that Geithner had (1) seen the books at Lehman and, (2) instantly phoned Bernanke. It didn’t seem like a stretch to assume that they must have stumbled on a lot of ‘toxic’ assets: debt to people you can’t afford to pay. Ever.

    And recall that visit to Lehman occurred within a week or so of that morning in Sept 2008 that something like $500 b-b-billion was siphoned out of the US before the Fed — or someone! — shut it down. (That piece of info came from a CSPAN interview with Rep Karpinski(?), but I have never seen a major media interview ask him about that key fact.) All we saw at the time was Pelosi speaking very carefully and keeping her cool — Bush and Cheney were **nowhwere** in sight.

    Then you see Congressional Hearings where the Insurance Commissioner of NY State testify that he couldn’t even regulate ‘derivatives’, nor could the Commodities and Exchange Commission. (A thousand curses on Larry Summers and Robert Rubin).

    All the bits and pieces add up to: it’s so scary that we can’t even figure out how bad it is, let alone talk about it to the public. Sorry, but it seems like this news – or something very much like it – has been coming for months, and months, slowly under the radar.

    But I think that every taxpayer who gives a damn ought to be on the phone with their electeds insisting on an end to ‘derivatives’ — unless they are STRICTLY regulated, and not one dime to any bank until the tax havens are shut down.

    Yeah, I’m a dreamer…

    • readerOfTeaLeaves says:

      and one of the intriguing bits of info was that Geithner had (1) seen the books at Lehman and, (2) instantly phoned Bernanke.

      My point being that whatever it was must have been either so shocking, or so scary (or both) that Geithner called Bernanke instantly.

      It’s my recollection — although, it may not be accurate — that whatever Geithner saw was soooooo bad that he phoned Bernanke at something like 2 am. Now, why would you do such a thing unless your mind was blown? Who wants to phone the boss at 2 am, unless it is a really, really big problem.

      This has surely been percolating under the radar for months.

      I don’t understand why we can’t have a bank that’s like a utility.
      I’d prefer that option at this point.

    • bobschacht says:

      Yeah, the Frontline piece is important, for all the reasons you mention.
      My fear is that the Geithner-Summers approach is shielding massive fraud, and that Government-as-shareholder amounts to buying into the fraud rather than exposing it and rooting it out. I believe a lot more in Sheila Bair, the head of FDIC, and Elizabeth Warren, head of the Congressional Oversight Panel, than I do in Geithner & Summers. (Hey, is this a trend? The women are getting it right, and the men don’t get it?)

      I wish that CSPAN and the MSM would offer more coverage of Bair and Warren.

      Bob in HI

      • fatster says:

        I second everything you said. Er, wrote. Scratch that: typed. Now, if only they’d listen!

      • readerOfTeaLeaves says:

        Totally with you on all points — beautifully stated.

        I think it’s fraud beyond what we can even conceive; hence, the crickets.

        The other factor is confusion over how to ‘account’ for much of the ‘value’; accountant friends who’ve explained ‘Mark to Market’ accounting to me — almost screaming over the wine glasses in sheer exasperated disgust — have underscored that not only have people behaved in predatory, reckless fashion but that there’s also a huge layer of ‘accounting practices’ that really need to be completely re-vised. Warren would probably be able to explain that very clearly.

        So how do we lobby for ‘More Warren, Please?’
        Maybe what we really need are a few little ‘Warrenisms” on our Starbuck’s cups to get one bit of the story, after another, after another… a sort of ‘weekly drip of Warrenisms’ might help us absorb the horror in a way that would allow us to grasp the key concepts without losing our emotional balance.

        Random, mid-afternoon brainstorm…

  3. PeorgieTirebiter says:

    Well I would hope so, since we overpaid for GM we’ll need a bank to make up the loss on the back side with the financing. And since it’s GM, and not say, Toyota, we should probably be looking at acquiring Auto Zone and AAA. Does AIG offer auto insurance?

  4. radiofreewill says:

    And then, suddenly, Regulatory Bulldozers appeared on the outskirts of the Wall Street Settlements, loudly growling with black smoke bellowing madly from their stacks…

  5. maryo2 says:

    OT – TPM is reporting that U.S. Attorney Mary Beth Buchanan
    has dropped the charges against Dr. Cyril Wecht.

    Dots through Buchanan had been connected recently here at EW, but I can’t find that thread now.

    • bmaz says:

      And at what window does Dr. Wecht go to to reclaim his reputation and the fortune he spent defending himself from this twit and her minions?

      There really is none in light of the sovereign immunity rules.

      • fatster says:

        Two stories are up at talkingpointsmemo.com, but neither has been updated about why she’s still occupying that job.

  6. freepatriot says:

    does this mean I gotta work banker’s hours, an wear suit, or sumtin ???

    cuz if it does, I’m agin it

    I don wanna be wearin no fancy big city neckties an clean white shirts

    an gittin outta bed fore noon isn’t an option

    what’s next, shoes ???

    I’ll be in teh outhouse if anybody wants me …

    • fatster says:

      Not only that, but you have to have your picture taken so you can be issued an electronic Id card that will allow you to bank.

  7. freepatriot says:

    I’d like to thank goofball rick sanchez for wetting his pants over Nancy Reagan

    I was so disgusted by rick’s ass kissing that I changed the channel

    and Jane was on MSNBC

    somebody shoulda warned me …

    (smiles)

    then msnbc cut to Obama an Nancy

    (sigh)

  8. Loo Hoo. says:

    OT- Yemini dies in GTMO.

    The Yemeni prisoner, known as Al-Hanashi, has been held without charge at Guantanamo since February 2002. Military records show he was about 31. His is the fourth apparent suicide at Guantanamo.

  9. fatster says:

    Who let Timmy out?

    Geithner backs strong dlr, says China’s assets safe

    Sun May 31, 2009 11:57pm EDT

    BEIJING, June 1 (Reuters) – “U.S. Treasury Secretary Timothy Geithner on Monday reaffirmed his faith in a strong dollar and reassured the Chinese government that its huge holdings of dollar-denominated assets are safe.

    . . .

    ‘”Chinese financial assets are very safe,” Geithner said. His response drew laughter from the audience. (Reporting by Glenn Somerville; Editing by Alan Wheatley)”

    http://www.reuters.com/article…..601?rpc=44

  10. Leen says:

    Ralph Nader and Labor Professor Harley Shaiken Discuss the Bankruptcy and Future of General Motors

    Auto giant General Motors filed for Chapter 11 yesterday in one of the largest bankruptcy cases in US history. Shortly after the filing, GM said it would close fourteen more plants, including seven in Michigan, and cut up to 21,000 more jobs. More than 2,000 car dealerships will be shut down, as well. After the factory closings, GM will have fewer than 40,000 workers buildings cars in the United States, one-tenth of a workforce that numbered nearly 400,000 in the 1970s. [includes rush transcript]

    http://www.democracynow.org/

    Looking for Professor Harley’s “MoTown Blues”
    MoTown Blues or Detroit Green
    http://therealnews.com/t/index…..mival=3582

  11. Loo Hoo. says:

    Is this something I missed?

    A leading Bush administration official, retired Col. Lawrence Wilkerson, former chief of staff to Secretary of State Colin Powell, says that the numbers associated with CIA waterboarding sessions—such as 183 times for 9/11 mastermind Khalid Sheikh Mohammed and 83 times for al Qaeda training camp commander Abu Zubaydah—may even reflect the number of water bottles expended.

    “Water bottle…they were counting the water bottles,” Wilkerson told me. “Four or five bottles were used each time. That’s the agency. They had to keep a record.”

    Wilkerson says he learned of the use of water bottles from agency officials and from the report on detainee abuse by the International Red Cross Committee.

        • MadDog says:

          This has to be where PapaDick came up with his official OVP Theme Song:

          “183 bottles of water on the wall, 183 bottles of water, if 1 of those bottles…”

        • bobschacht says:

          Using bottled water actually adds to the torture. Straight water feels very harsh to the nasal passages. Unfortunately, using bottled water makes it sound like water-boarding is some kind of yuppie enterprise– it somehow sounds *less* nasty, even though it is *more* nasty.

          Bob in HI

          • readerOfTeaLeaves says:

            Definitely — was the Perrier water regarded as a little too ‘french’…?
            You know, like John Kerry ‘french’…? Not quite ‘red-blooded’ enough?

            Does Coors sell bottled water…?

            • bobschacht says:

              Did you read what I wrote? Did you understand it? Seemingly not.
              To help you understand,

              Nastiness #1: You feel like you’re drowning and are about to DIE.

              Nastiness #2: using normal water instead of saline solution irritates the nasal membranes.

              Now admittedly, Nasty #1 subjects the victim from 0 to 99 on the scale of nastiness, and
              Nasty #2 merely adds another .1, so the “more” nasty is only marginal.

              Bob in HI

        • readerOfTeaLeaves says:

          Oh!!!

          The. Irony!!!!
          It’s killin’ me!!!!

          Where have I heard: ‘CIA’ + ‘bottled water’?

          Let’s just google: ‘foggo’ + ‘bottled water’. Among the hits, here’s the TPM summary:

          Foggo has been accused of helping Wilkes to secure agency contracts for his contracting firm; specifically, he has been accused of ensuring Wilkes a no-bid contract to provide water to agents in Iraq at inflated prices. Foggo also allegedly leaked classified information to Wilkes in order to help him prepare a bid to provide undercover flights for CIA operatives.In exchange, Foggo received from Wilkes expensive vacations, expensive meals and a promised position at Wilkes’ contracting firm upon Foggo’s retirement.

          If it turns out that Dusty Foggo was helping his buddy get ‘no bid contracts’ for helping with what appear to be ‘rendition flights’, and then selling bottled water that was possibly used in torture sessions to boot… well…

          … ‘irony’ barely scratches the surface…

          Now, show of hands if you think that Dusty Foggo, or the guy who promoted him (Porter Goss) might be the sort of people to be less than fully honest to Jello Jay or Nancy Pelosi…?

          • LabDancer says:

            Just Dusty follerin’* on Angler’s career plan.

            [*in keeping with this thread’s trend]

            • readerOfTeaLeaves says:

              Oh, gawd… wanna place bets on how long before the newz gits spun that some buddy of poor ol’ Dusty wuz just offerin’ some poor guy a ’sip of [name your favorite bottled water brand here]’.

              Contracts? Who said ‘contracts’? Dusty never said ‘contract’s. Nor did Dusty say ‘no bid’.
              Poker games at the Watergate…?
              Poor Dusty never even went near the Watergate…!

              What sleazy creeps.

            • readerOfTeaLeaves says:

              Actually, I would soooooooo love it if the FBI reeled in that Big Angler and landed him right on a sunny patch.

              I think he’s starting to flip-flop about this week… (see two threads back). Heh ;-))

          • maryo2 says:

            Can anyone find the name of the water bottling company that sold the water to Wilkes’ company? CIA contracts are not public, but I assume Wilkes’ company bought the water from somebody and resold it to the CIA at a higher price.

            (I don’t want to jump the gun too far, but there is a company named Poland Spring in Maine, USA. Their CEO gave $2000 to McCain in 2008. But I do not see any email address ending with .pl associated with this company in Maine.)

            • readerOfTeaLeaves says:

              Well, that is a mighty fine question.

              Which just made me think, “hmmmm…. Wilkes… contracts… Wilkes… contracts… Wait a minute!!” and then smack my forehead (yet again) at not remembering sooner.

              No clue who Wilkes bought the bottle water from, but doesn’t he link up with Mitchell Wade of MZM and contracts for Dick Cheney’s office notoriety…? Or am I mistook?

        • bmaz says:

          Wingnuts are going to be claiming vindication, as they were yammering about 183 being the number of “pours” or some BS like that. It is still BS. Even at the de minimus, it is forty some odd waterboard sessions. But I don’t buy that. First question is what is the size/capacity of each H2O bottle? Next thing to consider is that the way they use the cloth for application, once it is soaked, even a small “bottle of water” would keep a subject’s airways blocked and filled with water quite a long while. Bottom line, this is a good detail if true, but it really does not undercut in any way what went on.

          • WilliamOckham says:

            It still represents the number of near-death experiences that were suffered. Just take a look at the video of Mancow Muller’s waterboarding.

            • bmaz says:

              Absolutely. Exactly what I was trying to convey (inartfully) with my thought that even a small bottle of water could keep a subject “water-treated” for quite a long period with the cloth.

          • freepatriot says:

            Wingnuts are going to be claiming vindication, as they were yammering about 183 being the number of “pours” or some BS like that. It is still BS. Even at the de minimus, it is forty some odd waterboard sessions

            183 pours = 183 acts of torture

            claim vindication over THAT

            what is 5 years times 183 ???

            let’s hope for consecutive sentencing

  12. bobschacht says:

    Is Obama Fixing to Own Some Banks?

    I went to grad school in Michigan, and later I lived in Texas for several years. I don’t recall ever hearing “fixing” used in this way in Michigan, but it’s used that way in Texas on a daily basis.

    Who has kidnapped EW?

    Bob in HI

  13. Leen says:

    Goodbye, GM

    Michael Moore

    Oscar and Emmy-winning director
    Posted: June 1, 2009 07:31 AM

    http://www.huffingtonpost.com/…..09603.html
    I write this on the morning of the end of the once-mighty General Motors. By high noon, the President of the United States will have made it official: General Motors, as we know it, has been totaled.

    As I sit here in GM’s birthplace, Flint, Michigan, I am surrounded by friends and family who are filled with anxiety about what will happen to them and to the town. Forty percent of the homes and businesses in the city have been abandoned. Imagine what it would be like if you lived in a city where almost every other house is empty. What would be your state of mind?

  14. maryo2 says:

    FAUX news had an anonymous source in April that similarly mentioned counting the water applications. It is doubtful that FAUX’s source was Wilkerson, so I wonder who it was and if they meant one pour = one bottle of water, too.

    http://www.foxnews.com/politic…..ded-times/

    A U.S. official with knowledge of the interrogation program told FOX News that the much-cited figure represents the number of times water was poured onto Mohammed’s face — not the number of times the CIA applied the simulated-drowning technique on the terror suspect. According to a 2007 Red Cross report, he was subjected a total of “five sessions of ill-treatment.”

    “The water was poured 183 times — there were 183 pours,” the official explained, adding that “each pour was a matter of seconds.”

  15. fatster says:

    “The Legal, Moral, and National Security Consequences of ‘Prolonged Detention’”
    Senate Judiciary Committee
    Subcommittee on the Constitution

    DATE: June 9, 2009
    TIME: 10:00 AM
    ROOM: Dirksen-226

    OFFICIAL HEARING NOTICE / WITNESS LIST:
    June 2, 2009 

NOTICE OF SUBCOMMITTEE HEARING 
The Senate Committee on the Judiciary, Subcommittee on the Constitution will hold a hearing entitled “The Legal, Moral, and National Security Consequences of ‘Prolonged Detention’” on Tuesday, June 9, 2009 at 10:00 a.m. in Room 226 of the Senate Dirksen Office Building. 
Chairman Feingold will preside. 

By order of the Chairman

    http://judiciary.senate.gov/he…..fm?id=3896

  16. fatster says:

    US judge presses ahead with Guantanamo case

    “A US Federal Judge on Tuesday gave the Obama administration ten days to present evidence in the case of Afghan man who is challenging his detention at the Guantanamo Bay prison camp.

    “A judge at a Washington district court said the case of Mohammad Jawad versus President Barack Obama was ready to proceed, and set a June 19 date for a hearing.

    ‘”This case has been so thoroughly examined that it may be the one and only case not to be so difficult. This case is ready to go,” said Judge Ellen Huvelle.”

    http://rawstory.com/news/afp/U…..22009.html

  17. Loo Hoo. says:

    Now this is fun. Cheney led briefings of lawmakers to defend his interrogation technique.

    The Cheney-led briefings came at some of the most critical moments for the program, as congressional oversight committees were threatening to investigate or even terminate the techniques, according to lawmakers, congressional officials, and current and former intelligence officials.

      • readerOfTeaLeaves says:

        Wow…!

        And it was maybe a month ago that Karpinski (on Olbermann) conveyed serious heartache and a sense of betrayal about how the people under her command had been sold down the river. And just yesterday, retired Gen Sanchez said he thinks something like a ‘Truth Commission’ to get to the bottom of how the troops were [abandoned on the field] would be useful as a way to help people think about what went wrong so it does not occur again.

        And then this news in the WaPo confirming Marcy’s conjecture about Cheney’s involvement in briefing Congress.
        Interesting convergence of people speaking out and leaking now.

        Add that up with the McClatchy reporters tonight, fact-based and extremely knowledgeable, and you have a very different situation from a mere month ago.

        • prostratedragon says:

          Add that up with the McClatchy reporters tonight, fact-based and extremely knowledgeable, and you have a very different situation from a mere month ago.

          As in, say, last Friday or so? Suddenly a Cheneywatch site seems like a marvelously useful tool. Is there one?

        • Leen says:

          “people under her command had been sold down the river”

          Karpinski is clearly pissed



          Bad apples…Wolfowitz, Rumsfeld, Cheney, Feith, Cambone

    • tryggth says:

      Imagine how bad Cheney must feel. Heading up all those briefings and apparently none of the briefees could remember who the balding, wheezing old fart was.

      • Loo Hoo. says:

        Explains why he’s coming at it full bore, though. No way he could keep it hidden in war crimes trials.

  18. fatster says:

    FYI.

    Activist lawyer Susan Jordan killed in plane crash

    By LINDA DEUTSCH, AP special Correspondent
    Tuesday, June 2, 2009

    “Susan B. Jordan, an activist lawyer who represented high-profile clients such as Symbionese Liberation Army member Sara Jane Olson, has been killed in a plane crash in southern Utah, authorities said.

    . . .

    “She also gained fame for a landmark case of rape victim Inez Garcia who was convicted of killing one of her attackers. In a 1977 retrial, Jordan won Garcia’s acquittal on grounds that she acted in self defense.”

    http://www.sfgate.com/cgi-bin/…..#038;tsp=1

  19. ezdidit says:

    Between outright federalization and receivership, there’s a middle ground. I will know it when I see it – just like porn or anti-abortion terrorists.

  20. bobschacht says:

    My “idea” to Investigate and prosecute war crimes has actually gotten more “thumbs down” votes than “thumbs up” votes in the past day or two. The totals now are 102 up, 45 down, with the negatives growing from about 25% a day ago to 31% today. It is almost as if someone is pushing this “idea” to the wingnuts, telling them to “go and vote down”. This is an amazing and sad spectacle.

    This same website’s main page is now beset with controversy because a small number of very determined wingnuts want to pursue questions about Obama’s citizenship and birth certificate. There have been 9 “ideas” relating to Obama’s birth certificate posted in the past 2 hours, one with a net of 18 votes (20 up minus 2 down). Evidently the Right is bombing this website tonight.

    Bob in HI

    • Loo Hoo. says:

      Very strange. When I voted yesterday, things looked great.

      I wouldn’t worry about the birth certificate thingy though.

Comments are closed.