Brad Miller Asks More Questions about Goldman Sachs

Brad Miller (D-NC) asks the complement to the question I asked last night: Where’s the guy who doesn’t know shit about Wall Street to assess these bailouts?

Brad Miller asks, doesn’t Edward Liddy’s past board membership on Goldman Sachs create the appearance of conflict of interest–not to mention someone without the sufficient distance to approach this problem fairly?

Geithner doesn’t seem too troubled about any potential conflict of interest.  

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43 replies
  1. MadDog says:

    Geithner doesn’t seem too troubled about any potential conflict of interest.

    That’s because “conflict of interest” is read as “expertise”, and being a member of the club is the price of admission.

    I’m only surprised that they haven’t yet made a deal with Bernie Madoff to bail the financial system out.

  2. bell says:

    Geithner doesn’t seem too troubled about any potential conflict of interest.

    he’s in a conflict of interest as well…

  3. Synoia says:

    Geithner is either too stupid to take the 1099 MISC he got from the IMF to his accountant, or too dishonest.

    I wonder which it is?

    Geithner as a Fed member is a posterchild for being an expert on conflict of interest.

    • readerOfTeaLeaves says:

      Synoia, I generally find your comments really helpful, but this one makes me feel simply exhausted.

      Am I the only person here who’s a US citizen who has worked outside the US and had to deal with tax complications? Honest, you get five different responses from three people.

      I realize that it’s possible Geithner made some intentional error, but I think it is almost certain that he received bad information, or confusing information. He’s almost certainly called upon to make many, many decisions in the course of a day and compared with the scope of criminal, reckless conduct that he’s confronting, I’m personally cutting him slack on the tax thing.

      None of us are perfect, and I also have huge frustration over the bailout — specifically AIG and Goldman Sachs and Citigroup. I’m also disgusted with the bonuses.

      But step back a minute:

      Geithner: one tax problem in a whole bunch of years, and probably arose from confusion over tax jurisdictions (he worked for IMF and lived outside the US).

      Meanwhile, Sen Phil Gramm rammed the legislation that included the ‘Enron loophole’ through Congress in 1999. Phil Gramm also opened loopholes for banking secrecy, offshore banking, and then joined the board of UBS, which is now under criminal investigation by DoJ.

      Also, Abramoff was offshoring money, running it to GOP, and must surely have been funding the campaigns of asshats like Phil Gramm. Compared with Abramoff, Geithner’s got a 10# halo.

      Delay was running the House, hammering his own GOP members to buckle down to his every whim and jetting off to Scotland’s golf links while he was passing legislation that put people in the Marianas into virtual slavery, abetting the finance sector, and pushing the offshore banking and Enron loopholes that got us into this mess.

      I’m not claiming that Geithner will get us out of this mess.
      I don’t know what will happen.

      But compared with the criminal, money-grubbing bastards who shoved legislation through Congress that created this mess, along with Rubin and Summers telling Clinton to sign off on that bullshit, I’m personally willing to cut Mr. Geithner a bit more slack for awhile.

      As for the bitching that he didn’t know every damn dime on every bonus contract, jeezus…! Haven’t you ever had more to get done in a day than you could cover?! You know what happens — you triage, and unless something is ‘on fire’, it has to be deferred. I’m guessing that’s what happened here.

      It’s not perfect by a long shot, but it also tells me that he doesn’t have enough ‘bench depth’ on his work team.

        • readerOfTeaLeaves says:

          Hey LooHoo ;-))

          BTW: IIRC, you have teaching in your background? Selise just put up an **awesome**, phenomenally impressive, extremely important post at Oxdown on the topic of urging Congress to dispense with their 5-minute committee question format, which raises the risks of grandstanding while reducing the quality of the information.

          I’m so tired that I’m about to fall asleep on my keyboard, so I’m not sure that I made much sense, but I’d really encourage you to put in your two cents at that Oxdown diary.

          I think that crappy, ADHD-guaranteed 5-minute format also makes Geithner look like he doesn’t know what he’s talking about, OR he’s trying to evade.

          He is dealing with information that is far too complex to distill in brief, sound-bitey bits. Some of it can be distilled that way, but most of it cannot. So every time Geithner tries to give a complete, thoughtful response, he’s buzzed into silence and admonished like a child (!).

          NO WONDER people don’t want to put themselves through that!
          And Bernanke is treated the same way.

          So no one asks Geithner about how his IMF experience can help him solve teh current problems — if he tries to give a complete, coherent response, he’s buzzed into silence and scolded for taking someone else’s time.

          I tell you, at this point I don’t know WTF this is about — but I’m really tired of seeing Geithner get interrupted and scolded.

          Jesus!

          That 5 minute limit plays to Abu Gonzo’s advantage — he just has to stall for 5 minutes, and then he gets a new question. But with someone like Geithner nor Bernanke, — well, sheesh! — if they could explain it all in under two minutes, they’d have only a very superficial level of knowledge.

          Anyway, sorry to ramble — go check Oxdown diary for Selise!

          (This may seem OT, but it’s actually not. Congress needs to change that committee questioning format if they want to improve the quality and caliber of information on which they’re basing public decisions. This is really urgent — especially after the bits that I saw of today’s hearing (!).

          • Loo Hoo. says:

            Thanks, I’ll go check it out. The five minute rule is a good thing when Issa is asking questions, though…

          • emptywheel says:

            Bollocks.

            First of all, there are over 70 members of the House Financial Services Committee.

            If, as Cabinet-rank appointtee, you insist on a full committee hearing (as Geithner apparently did), then you’ve got over 70 people (times 5 = 350 minutes = almost 6 hours. Plus about an hour of statements to being.

            So if you’re not happy wih the 5 minute rule, then you’re going to buy off on EITHER multiple days of testimony OR only letting the most senior people ask questions.

            And frankly, there were a number of times–Maxine Waters to start (as the third or fifth questioner) where Geithner was filibstering. You want him to have time to answer his questions, you make sure he does so. He chose not to do so here.

              • Petrocelli says:

                bol⋅locks
                   /ˈbɒləks/ Show Spelled Pronunciation [bol-uhks] Show IPA
                –noun
                1. (used with a plural verb) Vulgar. ballocks.
                2. (used with a singular or plural verb) British Vulgar. rubbish; nonsense; claptrap (often used interjectionally).

                  • readerOfTeaLeaves says:

                    A Brit-born neighbor of mine used to say ‘bollocks’ all the time.
                    I understood that it meant ‘bulls balls!’; something tough and a bit dangerous.

                    As in ‘that crap is not just lightweight bullshit — it’s as thick as bulls balls!’
                    But then, he also used to say ‘ah, bullocks!’ when raising a glass of Bols, meaning, ‘this stuff is so strong it’ll make your eyes water and your throat burn!’

                    And another friend, and afficianado of bullfights, uses ‘bullocks!’ to mean something like, “Awesome!!!” As in, ‘that’s bullocks!’

            • readerOfTeaLeaves says:

              Selise is brainstorming ideas that include options like: let the (staff) attorneys ask questions so they can drill down on topics. Presumably, that would solve the problem of Abu Gonzo blathering up the 5 minute periods till he’s off the hook. But it could also promote more follow-up and coherent questioning; have all members give their questions to the staff attorneys or investigators, who are better at ‘drilling down’ on an interviewee.

              I was not advocating situations where 70 member committees can all blather on for endless amounts of time (!). But the current process has far too much ‘noise’ per signal. Something more coherent and effective needs to be developed.

              In addition, I find it downright idiotic that no one at yesterday’s hearing had any kind of chart about HOW the banking and finance institutions are related, and no kind of flow charts showing what happens first, next, last… etc.

              I suspect that Barney Frank is a true wonk, and lives and breathes this stuff. But for the time and energy, the information that came out of that hearing didn’t seem to really uncover the issues, nor reveal the finance structures and IMHO that leaves a lot of people (including myself) feeling very frustrated and makes Congress look like a bunch of buffoons.

              ====================
              [email protected], thank you! Will listen later tonight, as the last one you recommended was excellent. And with Mary’s ’second’, a double endorsement.

      • bobschacht says:

        Meanwhile, Sen Phil Gramm rammed the legislation that included the ‘Enron loophole’ through Congress in 1999. Phil Gramm also opened loopholes for banking secrecy, offshore banking, and then joined the board of UBS, which is now under criminal investigation by DoJ…

        Delay was running the House, hammering his own GOP members to buckle down to his every whim and jetting off to Scotland’s golf links while he was passing legislation that put people in the Marianas into virtual slavery, abetting the finance sector, and pushing the offshore banking and Enron loopholes that got us into this mess.

        The problem is, that this was not just a Republican thing. President Clinton and some of his cabinet supported Gramm’s legislation. At the time, they thought it looked like a good idea.

        Bob in HI

        • jdmckay says:

          The problem is, that this was not just a Republican thing. President Clinton and some of his cabinet supported Gramm’s legislation. At the time, they thought it looked like a good idea.

          True, but not to extent it’s been brandied about since meltdown became a lava flow.

          Clinton did support allowing investment banks merging operations w/banks… very true. He did not support allowing it to be unregulated, the later which quite obviously became the hazard accelerating what has become this “crisis”. Artur Levitt vociferously protested making these guys’ operations non-regulated. (Tom Delay/K-Street led) Congress’ response: shut up, or we’ll de-fund your office.

  4. SparklestheIguana says:

    Isn’t the problem that the pool of recruits to come in and head AIG necessarily only consists of people of a certain age and experience that guarantees they’ve served on certain corporate boards and have vast corporate and social networks that connect them to a large percentage of that same small universe? How is Paulson going to recruit someone he doesn’t already know, to come work for $1? I suppose I’m half playing devil’s advocate, because I wish someone untouched by this small universe could be found, but half being a realist.

  5. Mauimom says:

    Slightly OT: I was hoping there’d be live blogging of the presser.

    Boy, if you ever needed a picture of why the press is so fucked, just listen to the “questions” by the Village: self-important, stupid, attempted “gotcha.”

    • SparklestheIguana says:

      And if you want to be even more disturbed, check out the Village Twitter feeds. Chris Cilizza saying “Amen” to somebody twittering about how Mike Allen is strong and bold like a morning cup of coffee.

      • skdadl says:

        … somebody twittering about how Mike Allen is strong and bold like a morning cup of coffee.

        Oh, please don’t make me laugh that hard when I’m going to bed. (And I don’t even know who Mike Allen is.)

  6. Leen says:

    Geithner sure got upset. The question was totally appropriate. As if there was no other individual to do what Liddy is doing

    • NCDem says:

      Listen carefully to Geithner’s answer. He certainly disassociated himself from the decision to place Liddy at the helm of AIG.

      There is a great new program on Fox network that I have watched this season. “Lie to Me” often uses facial expressions of politicians as prime examples for proving his case that a person is lying. I agree that Geithner was indignant in his response on whether Liddy or Goldman Sach’s may have profitted from this decision but he obviously was very evasive in acknowledging that Liddy may have been the best person to place in this position.

      In the end, we will discover that this placement was made politically to protect and defend those who accumulated more power and wealth in the past 8 years.

  7. PJEvans says:

    How is Paulson going to recruit someone he doesn’t already know, to come work for $1?

    The one he doesn’t know can be paid more than that – if they aren’t involved already. Yes, it will be difficult, but they had the chance to get Krugman or Roubini, who are both less involved in the mess than Geithner and Summers.

  8. SparklestheIguana says:

    For a second there I thought you were suggesting Krugman and Roubini could’ve been gotten for the AIG CEO job.

  9. skdadl says:

    OT, and apologies if someone has noted this before, but I was wondering where Dawn Johnsen’s nomination had got to after Specter’s holdover had lapsed. I see from the SJC site that the committee sent her nomination to the full Senate last Thursday, 11-7 plus one pass (Specter).

    I just watched the video of Thursday’s meeting, which was worth the hour. It starts slow, but there’s good stuff there, especially from Durbin and Whitehouse, who counter Cornyn’s and Specter’s fussing with great statements about what happened to the OLC during the Bush admin. Did you know that Bybee’s confirmation hearing in 2001 was conducted by one senator and consisted of six questions? Leahy also gave a strong statement at the end; it sounds as though they expect lotsa fireworks over Johnsen in the Senate proper.

  10. phred says:

    EW, just a quick drive-by to say thanks both for the full liveblog and the excerpts you have highlighted. I missed the festivities yesterday, so really appreciate the terrific resource you provide for those of us trying to catch up after the fact.

  11. Mary says:

    Series of OTs –
    Macaqueman, a smidge on Siddiqui, but from Pakistan (still quiet on the US front) http://www.dailytimes.com.pk/d…..009_pg7_32 The high court has ordered that gov make filings/comments in the petitions for repatriation and alleging gov (Pak)participation in criminal acts against her. Hearing on the 15th. If gov doesn’t make filings/comments, the court will proceed as if the allegations in the petitions are true.

    Per TPM/McClatchy – CIA testifying that electronic voting isn’t too secure (who woulda thunk?) and that someone interefered with the votes in the 2004 election. The 2004 Venezuelan election It’s probably one of those things where they can be sure the vote was tampered with, bc they tampered with it first and their tampering was tampered with…*g* or not.

    Ackerman says Kiriakou is going to work for the Senate Foreign Relations Committee.

    Newsweek has this story on a GITMO guard who converted to Islam. While I’m not very sympatico with most of the aspects of Islam that seems to prevail in most areas where it is practiced, I thought the story was interesting in that it mentions Errachidi – the bipolar London chef who we kept in abuse for years, spending most of his time at GITMO in some kind of punishment program or facility, even though the storyline sold with him, when he was sold to the US for experimentation, was easily disproven once lawyers were finally given access to any of it.

    I can’t imagine why spending a lot of time with someone like that – being illegally held and punished for years and still clinging to his faith – would have an impact on someone exposed to him every day. /s I guess you either develop a sympathy or you kill off what is left of your own soul.

    • jdmckay says:

      CIA testifying that electronic voting isn’t too secure (who woulda thunk?) and that someone interefered with the votes in the 2004 election.

      I saw that. No mention of Diebold et’al wrt huge evidence their foibles were institutionalized in a RNC federally “managed” voting system. Christ, they didn’t even have to hack that thing… the “hacking” was built in.

  12. jdmckay says:

    I watched entire hearing yesterday, BO’s presser as well. I think BO exuded confidence (Josh Marshall sure thinks so.) My problem is BO’s confidence not backed up by actions… same w/Geithner.

    FWIW, for all his wackiness I thought Ron Paul’s questions were most pertinent and relevant. In essence, he described massive theft by WS in this whole deal as basis for asking the $m question: (my summary) shouldn’t we be rethinking our assumptions about capitalism?

    Sure rings w/me, as biggest problem I have w/TALF/TARP and Fed’s assumption of toxic balance sheets: they are using same private institutions which have misallocated (wasted/stolen) US (and world’s) savings for over a decade now… using them as financial vehicle recapitalized on taxpayers (gazillions) dime(s), to fix what they have unsuccessfully exploited for a long time now. And w/each scandal, the scope has grown and the costs vastly increased for everyone.

    There has been back and forth between Krugman and Summers… kind’a entertaining I guess, as far as that goes. IMO Krugman’s had a lot of good things to say, but not everything. In particular, I’m thinking of his comments regarding hazards faced by Europe (EU) in this thing.

    I mention it because several comments in NYT’s today which, from my POV, entirely undercut Krugman’s assertions regarding EU’s dealing w/”crisis”. The money quotes that caught my eye. After discussion of Jean-Claude Trichet’s (EU’s central bank president/France) advocacy for following Geithner model (print more money, pump it into banks/investment houses), there is perspective from EU’s dominant policy:

    March 25, 2009
    European Bank Resists Printing Money
    By CARTER DOUGHERTY

    (…)Beneath it all is an aversion to anything that smacks of “printing money,” a phrase that evokes Europe’s worst economic nightmares, everything from kings debasing their currencies to fight endless wars to the hyperinflation and currency collapses in Germany after it lost two wars in the 20th century.

    (…)

    The euro has climbed about 10 percent against the dollar since the Fed policy was announced, the logical consequence of a decision to increase the supply of dollars. It is also up sharply against the pound.

    A sustained strengthening of the euro would price more European exports out of world markets as they recover, giving the American economy a significant leg up without any overt decision to devalue the dollar.

    “You can’t suddenly start engaging in competitive devaluations of your currency,” said Erik Nielsen, chief Europe economist at Goldman Sachs. “But you can loosen monetary policy domestically, which has the same effect.” (eg my comment: advocating “quantitative easing” aka. Geithner/Bernacke).

    (…)

    But the bank has thus far avoided anything resembling the Fed’s advocacy, which is viewed in Frankfurt as a desperate effort to make up for the lack of political will to fix the American banking system.

    I couldn’t agree more: lack of political will to fix the American banking system. AFAIC, TALF nothing more than cross-their-fingers attempt to “make things right” by avoiding fixing this system, while presenting arguments to the public which ignore underlying nuts and bolts indicating strongly that, indeed, said system really needs fixing bad.

  13. jdmckay says:

    In view of Geithner/Bernacke’s strong defense of AIG bailout, along w/statements of secure assets for their loans in other AIG divisions, this today from Bloomberg:

    American International Group Inc.’s plane-leasing unit said it may not be able to survive without help from its parent company or new access to credit.

    “Without additional support from AIG or obtaining secured financing from a third-party lender, in the future there could exist doubt concerning our ability to continue as a going concern,” Los Angeles-based International Lease Finance Corp. said today in its annual report.

    just saying…

  14. Mary says:

    … and while we have the Fed buying from Treasury, the UK isn’t finding buyers for all its bonds …

  15. plunger says:

    The Goldman moles burrowed into the administration:

    http://img205.imageshack.us/img205/9489/gsgov.gif

    Senator Sanders Blocking Key Obama Nomination

    By Ken Silverstein

    I reported back in February on the case of Gary Gensler, the former Goldman Sachs employee and derivatives cheerleader who President Obama nominated to head the Commodity Futures Trading Commission (CFTC). Gensler’s nomination sailed through the Senate Agricultural Committee but Senator Bernie Sanders has placed a hold on the nomination (as has a second senator who is as yet unnamed). A statement from Sanders’s office said:

    While Mr. Gensler is clearly an intelligent and knowledgeable person, I cannot support his nomination. Mr. Gensler worked with Sen. Phil Gramm and Alan Greenspan to exempt credit default swaps from regulation, which led to the collapse of A.I.G. and has resulted in the largest taxpayer bailout in U.S. history. He supported Gramm-Leach-Bliley, which allowed banks like Citigroup to become “too big to fail.” He worked to deregulate electronic energy trading, which led to the downfall of Enron and the spike in energy prices. At this moment in our history, we need an independent leader who will help create a new culture in the financial marketplace and move us away from the greed, recklessness and illegal behavior which has caused so much harm to our economy.

    http://harpers.org/archive/2009/03/hbc-90004606

  16. JohnLopresti says:

    Check out Frank Partnoy interview with Teri Gross today, both Gramms, involved in dereg, fineprint in lameduck law at page1100 Clinton signed eve of xMas vacation.

    • readerOfTeaLeaves says:

      Wow, even the page for that episode is informative. Thank you, indeed!
      One final note — Nomi Prins, who wrote “Other People’s Money” is scheduled to be on a liveblog at FDL on Thur 3/26 at 10 am EST.

      I am not able to read everything (dammit) related to the market and the history of its problems, but this book is so superb that I bought a copy for my personal reference shelves. It’s loaded with data and good citations.

  17. Mary says:

    37 – I’ll second that. It was a really good interview from the standpoint of explaining the history, players, etc.

  18. YYSyd says:

    1) If you lobby for an industry you can not get a job related to the industry in the administration. However if you are a principal, no problems.

    2) Conflict of interest is not about real conflict, it is about the “appearance”. Any real corruption is no longer a conflict it is in fact a crime. There is no excuse at all to have such heavy participation of Goldman S in the government. It is all about appearance and that matters more than substance.

    3) $1 symbolic annual pay is Bullshit. If ever an opportunity presents to show that a CEO can be hired at non-stratospheric rates that is intelligent and competent this is the kind of opportunity. Instead they opt for a well connected person who is working out of ego gratification.

    4) All in all a gut-less approach to the problem/s.

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