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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?


To: lorne who wrote (38779)11/19/2009 7:42:55 AM
From: lorne2 Recommendations  Read Replies (5) | Respond to of 71588
 
TARP Audit Finds Geithner Gave Away The Farm
Font size Print E-mail Share 28 comments Posted by Jill Schlesinger
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
cbsnews.com
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Special Inspector General for TARP (aka "SIG TARP") Neil Barofsky said something we've all known for a while: the government gave away the farm when AIG failed.

If you recall, AIG's failure meant that the companies on the other side of all of its contracts (counterparties) were going to be left holding the bag. Under normal cases of bankruptcy, the court would impose haircuts to the amount of money due to counterparties, but because AIG didn't actually declare bankruptcy, the counterparties claimed that they were owed 100 cents of every dollar. The only bank that even considered taking a haircut was UBS - the Swiss, for goodness sakes - hard to imagine that a Swiss bank could make US banks look bad, but here's a case in point.

OK, so let's get this straight: the financial world is melting down, Uncle Sam had just saved the bankers' butts and now Tim Geithner the President of the Federal Reserve Bank of New York (FRBNY) was going to wimp-out? Yes, the Great Gazoo strikes again! (My friend pointed out that our current Treasury Secretary and former tax cheat bears a striking resemblance to this esoteric character from "The Flintstones" — Geithner has been the Great Gazoo since!)

When Geithner/Gazoo says, "Hello Dumb Dumb," he's talking to us! The Great Gazoo shafted the US taxpayer in the AIG debacle and in the process, enriched the counterparties who dragged us into this mess. The SIG TARP report noted that "structure and effect of the FRBNY's assistance to AIG ... effectively transferred tens of billions of dollars of cash from the government to AIG's counterparties."

Oh, and remember all of those claims by Goldman Sachs brass that the firm had "perfectly hedged" its exposure to AIG? Not so fast, boys. According to the New York Times, "among its notable findings, the report challenged Goldman's position that it should not have been forced to bear losses on its dealings with A.I.G. because it had successfully hedged away any exposure. Mr. Barofsky said that Goldman's hedges were unlikely to have held up amid the market turbulence of late last year."

Barofsky seems to be one of the few officials that has to tell us what we already know: TARP is "almost certainly going to be a loss" for taxpayers and Geithner rolled over for Wall Street in the AIG negotiations.



To: lorne who wrote (38779)11/19/2009 11:17:37 AM
From: Peter Dierks  Respond to of 71588
 
The American people didn't need to know much more that the guy cuts corners to get the gut feel he was not going to be a good Treasury Secretary.

Go Geithner Go. Go Away.



To: lorne who wrote (38779)11/19/2009 7:04:44 PM
From: Peter Dierks  Respond to of 71588
 
Barack Obama rewards big donors with plum jobs overseas

He may have promised to change Washington, but President Barack Obama is continuing one of its most renowned patronage traditions: bestowing prized ambassadorships on big donors.

Of the nearly 80 ambassadorship nominations or confirmations since Obama’s Inauguration, 56 percent were given to political appointees and 44 percent have gone to career diplomats, according to records kept by the American Foreign Service Association.

The latest nomination came this week, when Beatrice Wilkinson Welters was nominated to serve as ambassador to the island nation of Trinidad and Tobago in the Caribbean.

Welters, a longtime advocate for underprivileged children, and her husband, Anthony, an executive with UnitedHealth Group, generated between $200,000 and $500,000 in donations to Obama’s presidential campaign and an additional $100,000 for his Inauguration, according to the Center for Responsive Politics, a nonpartisan group that tracks political giving.

The Welters can be counted among the nearly two dozen Obama bundlers — fundraisers who together organized and solicited more than $10 million in donations during the 2008 campaign — who now are being dispatched to some of the world’s greatest cities.

Charles H. Rivkin, a Los Angeles-based children’s television executive and an $800,000 bundler, is in Paris; Alan Solomont, a Boston-based investor and $500,000 bundler, is in Madrid; Louis B. Susman, a Chicago investor and $500,000 bundler, is in London; and former Virginia lieutenant governor Don Beyer, a $745,000 bundler, is in Bern, Switzerland.

Nicole Avant, a member of a Motown family dynasty who is credited with bundling up to $800,000 for Obama, was granted the coveted and cushy ambassadorship in Nassau, Bahamas.

Beyond the bundlers, Obama’s ambassador ranks are also teeming with good, old-fashioned, loyal Democrats who have given generously to the party but weren’t ranked among his top fundraisers.

Counted on those rolls are newly installed Ambassador to Germany Philip Murphy, former finance chairman for the Democratic National Committee who since 1989 has personally donated nearly $1.5 million to the party; and Obama’s nominee for ambassador to Costa Rica, Anne Slaughter Andrew, an environmental attorney whose husband, Joe, is a former DNC chairman who provided a well-timed endorsement of Obama during the extended 2008 primary against then-Sen. Hillary Clinton.

For career diplomats, the selection of amateurs is always galling. “It is time to stop this spoils system and these de facto, three-year-term rentals of ambassadorships,” said Susan Johnson, president of the American Foreign Service Association.

“We believe the appointment of noncareer individuals, however accomplished they may be in their own field, to lead American diplomatic missions should be exceptional and circumscribed and not the routine practice it has become over the last three or four decades,” she added.

The politicization of the diplomatic corps, which began in the 1960s, is of increasing concern to some foreign policy experts, given the rise of terrorism and the need for greater coordination between the U.S. and foreign governments on national security issues.

Diplomatic posts that may once have largely involved ceremonial appearances now can be focused on issues such as human and drug trafficking, kidnappings, war and intelligence sharing. With that worldview, “We believe America is best served by having career foreign service officers, just as we have career military officers,” Johnson said.

Obama never promised an end to the practice of ambassadorial patronage. In an appearance before his Inauguration, he said, “it would be disingenuous for me to suggest that there are not going to be some” political appointments.

But what has surprised some foreign policy experts is how traditionally Obama has defined the word “some”:

White House spokesman Tommy Vietor said it is unfair to judge the Obama administration by its first wave of ambassadorial nominations, because most of the openings involve traditional political posts recently vacated by Bush administration appointees.

More career diplomatic posts, which run on staggered, three-year terms, will begin opening up in the next year or two. That should produce a second wave of nominations dominated by professional foreign service officers, he added.

“We’re well-aware of the historical target of career vs. noncareer ambassadors, and we will be right on that target,” said Vietor.

That historic benchmark is roughly 30 percent political appointees to 70 percent career diplomats, and Obama seems on track to meet it.

But Johnson said the career diplomatic community had hoped for more than just the status quo from a candidate who campaigned on a vision of transforming Washington into a city less beholden to special interests and wealthy political benefactors.

“There is a bit of disappointment largely because expectations were raised by the ‘change’ theme of Obama’s campaign and that there would no longer be ‘business as usual’ in Washington,” she said.

Equally disappointing — but perhaps more expected — to career diplomats is that the distribution of assignments shows no sign of changing: The political appointees get the big mansions in big-name countries, while the careerists pack off to Haiti, Zimbabwe, Serbia and other less inviting postings.

To be sure, many of Obama’s new ambassadors are accomplished executives who were schooled in the nuances of diplomacy in corporate boardrooms rather than in foreign capitals.

They also bring to their embassies the gravitas and personal ties needed to cut through the State Department bureaucracy and speak directly to the president when a situation requires it — an asset some U.S. allies have come to expect and demand.

And several of Obama’s chosen diplomats have foreign policy backgrounds and are noted experts in their new areas of work.

For instance, U.N. Ambassador Susan Rice is a well-known expert on foreign affairs, as is Ivo H. Daalder, ambassador to NATO. Rivkin, the new ambassador to France, is the son of a diplomat and was a member of the Homeland Security Advisory Council.

The president has, occasionally, tweaked the patronage mold.

His selection of then-Utah Gov. Jon Huntsman, a Republican who had bundled $100,000 for Sen. John McCain’s presidential campaign, as his ambassador to China was a shock to Republicans who had seen Huntsman as a possible GOP presidential candidate. And in choosing Eleni Tsakopoulos-Kounalakis as ambassador to Hungary, Obama chose someone who had bundled $100,000 — for Hillary Clinton.

An even more surprising pick was Obama’s choice for ambassador to the Holy See, a coveted post for Roman Catholics. Obama’s choice, Miguel H. Diaz, an associate professor of theology at St. John’s University, has made one political donation in his life: a $1,000 check to Obama’s campaign.

But Dave Levinthal, communications director at the Center for Responsive Politics, said, “At least to date, it’s clear that a notable number of the ambassador nominees have been bundlers, and more have been donors. Those numbers appear to speak for themselves.”

politico.com