Sheila Bair is featured in a new article in the New Yorker by Ryan Lizza. Bair keeps coming off as an Elliott Ness type, even though she’s a Republican. We’ve gotten so used to Republicans being the discredited bad guys that it’s hard to imagine one that might have the integrity of a Patrick Fitzgerald in the area of bank regulation. Unfortunately, Obama’s claims of bipartisanship only go so far. Bair, described as “not a team player” by Tim Geithner’s guys, is having her department subordinated to Treasury so that the bankers can escape the possibility that the FDIC can take them over. For the first time since the FDIC was created, its power in the area of bank regulation and resolution has been become secondary to the power of the Treasury and the Fed. The backstory has a bit of that old familiar ring to it:
These debates entered into the Administration’s discussions about building a new regulatory architecture. In late March, Geithner previewed for Congress some of the key concepts that Treasury wanted. The outline seemed to match the Bair camp’s ideas. [Ladies, has this ever happened to you?] A new authority with the power to take over large financial institutions that posed a systemic risk to the economy was modelled on the F.D.I.C., which, Geithner suggested in his testimony, would be an equal partner with Treasury in resolving such firms if they failed. He seemed to be saying that although he and Bair may have disagreed about how to handle the current crisis, there was much more consensus about how to deal with a future one.
But in the white paper detailing the new legislation, which the Administration released on June 17th, all the new authority to regulate firms that posed systemic risk was vested in the Federal Reserve. During Geithner’s testimony before the Senate, Jim Bunning, of Kentucky, echoing Bair, was incredulous. “It took fourteen years for the Fed to write one regulation on mortgages after we gave it the power to do that,” he said. “What makes you think that the Fed will do better this time around?” In addition, while the March plan said that the “Secretary and the FDIC would decide” how to resolve a failing firm, the new plan said such power should “be vested in Treasury.” Geithner could appoint the F.D.I.C. to do the technical work of cleaning up the firm, but between late March and mid-June—when Bair’s aggressive ideas about how to handle Citigroup leaked to the press—Bair’s agency had been downgraded from Treasury’s equal partner to a sidekick. The senior Treasury official said that stripping authority from the F.D.I.C. had nothing to do with pressure from the banks. “Making a group decision on something that must be done really quickly is not easy,” he said. “At the end of the day, someone has to have the ability to make a call, and it’s better to have that authority vested in one person.”
When I asked Bair about the plan, she said, “I think it reflected a lot of input from a lot of different agencies, and the private sector, and insurance and consumer groups. It’s a very difficult task to try to balance all the different perspectives and come up with a package, and every compromise is going to have people who are unhappy about various parts of it. So I think it’s a starting point.” I said that she sounded disappointed. “I don’t know if ‘disappointed’ is the right word,” she replied.
Ok, to recap: Bair came up with a pretty good idea to regulate bank holding companies by the FDIC. Geithner took that idea and made it his own with the additional spin that the department that does a superb job of actually regulating the banks, the FDIC, would be bypassed as regulator in favor of the Treasury, which has a record of one regulation in the past 14 years. Problem solved! There is something deeply unsettling going on here if the Obama administration is willing to trash one of the best departments it has in order to give the finance guys what they want. We’re all going to suffer for this.
I would like to attribute part of this to stupidity but in the past couple of decades, the way women who know better have been dismissed as subordinates to be ignored or outliers who are unserious has been pretty astonishing. Sexism costs.
Tid bits
On the economic front, Paul Krugman is downright dour this morning and his patience with the Obama administration appears to have been short-lived. He probably resolved to give positive reinforcement to the Obamatons in the WH whenever they did something right but it looks like the adminstration is full of slow learners with cocky attitudes. Um, that kind of s#!^ isn’t tolerated at Princeton. Paul has always thought that the stimulus package was too small and now he thinks we are headed off a cliff if we don’t get another one. Methinks Paul has been looking at some graphs and they’re bad, bad, bad.
Bad for us too. As some of you may know, my industry has been going through a lot of changes recently and laying off obscene numbers of scientists. It’s especially bad in the US where the workforce has no protections and labor here is even more of a variable cost than in Europe. Some of my colleagues were talking about this just yesterday, hoping that they could ride it out and escape the Grim Job Reaper’s scythe until the economy picks up. I said I had been reading Paul Krugman and this recession isn’t like the other ones in recent history and the economy probably isn’t going to pick up for the forseeable future, ie a decade or more. Yep, Paul’s crepe hanging ways have gotten to me too. Thanks a lot, Paul, for shattering our illusions of economic security. Why can’t you just smoke hopium like your sell-out colleagues?
There’s more where that came from. Simon Johnson is busting on the banks this morning at Baseline Scenario. I’m getting a sick feeling that the Obama admin has completely lost the plot and is no longer in control. They may have thought they could handle it but it’s clear that they don’t have the cojones to go up against the bankers. It reminds me of Jon Corzine promising to rein in NJ’s property taxes and then just throwing up his hands in frustration a couple months after taking the job. Neither Obama or Corzine has any fricking clue what their doing.
Alegre’s Corner has been going gangbusters lately. I mean, Day-um! There are some really good reads there. Here are just a few you should check out:
A conversation with NOW’s new president, Terry O’Neill
America’s effective unemployment rate- 18.7%(?)
Senator Franken picks a good role model- Hillary
Regarding Franken, I respect his decision to put Minnesota first and to compromise when it’s in Minnesota’s best interest. Let’s face it, even if he is the 60th vote, it is unlikely that his firewall against the filibuster is going to get much action except in the most unusual circumstance. But his vote will clarify the fault line that exists in the Democratic caucus in a way that will be obvious to all voters. And when we can clearly identify the culprits, some of whom may not be completely obvious right now, we can go after them in the primaries. So, it’s all good. Just do your best, Al. Make the rest of us human and visible. That’s all we ask.
For those who are waiting for it, here’s your Michael Jackson news du jour:
Debbie Rowe, who is the biological parent of two of the Jackson kids, is preparing to go mano a mano with Kathryn Jackson over custody. Ok, let me see if I have this straight: The biological mother who relinquished custody, hasn’t seen the kids in years and as recently as last week said she doesn’t want them in her life, is going to go up against the custodial grandmother who is a Jehovah’s Witness and is probably partially responsible for Michael’s lifelong pathological quest for his missing childhood. Why can’t these ultra rich people ever get these things straight in their wills??? It’s obvious that Diana Ross, who has no biological connection, would be the better choice here.
Developing: My colleague alerted me to a new bill being pushed through the NJ legislature that would guarantee local energy producers a profit regardless of market conditions. Not sure of the details but there was an organization canvassing her neighborhood the other day that was agin it. After what Matt Taibbi reported the other day about Goldman-Sachs possible involvement in the profit making potential of cap and trade credits, it’s important to track all of this stuff down and figure out if there are any connections.
Hey! Summer has arrived in NJ. No, really! We’ve managed to get a few days of mostly sunny skies with occasional WTF?! sunshowers and temperatures that justify ditching the sweater. I might even put on a pair of shorts today. OooooOOOOoooo! Last Sunday was probably the nicest day for all of the month of June. I have a picture for posterity of the Red Mill Museum in Clinton, the site of last Sunday’s Renaissance Faire (Still have the big bruise on my arm from taking up archery again for the afternoon). You can almost feel the cool water of the Raritan River’s south branch…
New Jersey: More than an exit.
Filed under: General |
The Confluence 
Florida Power and Light has a legislatively guaranteed profit. This is one reason for the lkack of maintaining equipment that became so apparent after the storms pf the past few years.
Morning RD: If the White House can host dinners for journalists on a regular basis and ensure favorable coverage for just the cost of food and drink why wouldn’t a newspaper want to get in on the action. There’s no difference. Broder, Dionne, even Woodward and Bernstein have been laughing stocks for some time. Does anybody care what they think? I, for sure, don’t.
I know Sheila Bair is regarded as some kind of heroine around here, But when JP Morgan Chase acquired WAMU, I couldn’t help but wonder if she didn’t help them get WAMU for a song. I know someone who works for WAMU and is in a position to know and that someone told me that Chase had been trying to acquire WAMU for years. This person said as recently as the week before the takeover, WAMU mgmt had assured their employees that their capitalization was more than adequate.
Then the meltdown happens, Bair swoops down and takes over WAMU while WAMU upper mgmt are on a plane somewhere and the rest is history. I don’t have any real “inside” information and I’m not inclined to look into it further; what’s done is done. But something was rotten with this deal.
Yep, nobody expects the FDIC. It’s chief weapon is surprise and fanatical devotion to efficiency. I’ve heard nothing but rave reviews for the way they take over banks. Really, her department is very respected. If WaMu ended up being bought by someone else, there may be a very good reason for it. I know for sure she didn’t like Citigroup and we now know why.
There was an excellent podcast on an FDIC bank closure on This American Life a couple of months ago. Well worth the listen. The FDIC is a global model of how things should be done, which makes it all the more mysterious as to why we’re cutting them back.
Good post, RD – off to read the latest Krugman.
Oooh, the Shrill One sounds like his old self again today. Scary stuff:
O.K., Thursday’s jobs report settles it. We’re going to need a bigger stimulus. But does the president know that?
—
What I don’t know is whether the administration has faced up to the inadequacy of what it has done so far.
So here’s my message to the president: You need to get both your economic team and your political people working on additional stimulus, now. Because if you don’t, you’ll soon be facing your own personal 1937.
Yikes…he also talks about how they have done NOTHING with housing or the toxic assets left as sludge in the financial system. He keeps barking, but they aren’t listening–and soon, it’s going to be too late.
Re: Debbie Rowe: why doesn’t she just come out and ask for more money? It must be awful to be that famous and wealthy, surrounded by leeches. RIP Michael.
Yep, he’s had it with the Obama administration. They’re not studying and doing their homework. They are failing his class.
As for Michael Jackson, his fame and his father may have screwed him up as a kid but his mother’s religion only made it worse. Where other screwed up famous kids probably had a regular cultural reference, JW kids don’t. They aren’t allowed to celebrate holidays or birthdays, not supposed to play team sports, not supposed to go to Girl or Boy Scouts and aren’t supposed to hang out with or be friends with non-JW children. So, for Jackson, he was in an adult world, expected to work like an adult, surrounded by show biz people and their problems but having no access to or permission to enjoy a regular childhood. You can lay it all on his father but his mother’s religion made it much, much worse by taking away supporting people who might have helped. (No, JW’s do not have youth groups. When you’re old enough to read, you have the adult responsibility for your own salvation).
What Jackson needed was a good therapist. And his kids really don’t need any exposure to Armageddon and the crazy Witnesses.
The stimulus needs to be spent faster anyways. Haven’t they only spent something like 42 million of the 700 million?
Frankly, I felt the whole thing was done jack@ss backwards. They should have spent the money on infrastructure and then done the send checks to folks thing to help them until the infrastructure spending started to kickstart things.
I also think the admin has kicked the can on the housing crisis. Alot of us had our doubts when they unveiled the wonderous plan that allowed people to refi but had restrictions on amounts and how far upside down you could be. We knew it would be no help in places like California where property values are through the roof. You can’t leave out states that are the eighth largest world economy out when planning. It’s just plain dumb.
Diana Ross is an alcoholic who’s had her stints in rehab. If she’s sober, fine. But how long has she been on the wagon?
Let’s face it. Those kids don’t have many good options.
They are most likely already really traumatized. They are going to need heavy duty therapy down the road.
True, but I’d take the recovering alcoholic over the Witness grandmother in a heartbeat. The alcohol is much easier to recover from. I’ve got Witness family members. It’s destructive to the psyche.
Hmmm, as an adult child of an alcholic, I must humbly disagree.
Actually, I think Debbie Rowe would be the best parent. If she wants to be one. And I completely understand her request for a restraining order against Joe Jackson. The man is evil.
So the choices are:
Grandmother who enabled Grandfather to beat his sons with a belt.
Chronic alcoholic.
Absent parent (and who truly knows why this is), but younger, a nurse who lives on a ranch and is a biological parent.
I know which I’d choose.
As a child of a recovering Witness who never fully recovered and niece of several aunts and uncles who are still in it and don’t speak to my mother anymore, I can tell you that having a recovering alcoholic as a guardian is preferable. I’ve known many recovering alcoholics, at least one was an excellent parent. But Witnesses? I’m sorry but we are all a bit fucked up by the bizarre, authoritarian, eschatological, puritanical upbringing. Heck, even the Amish let their kids go wild when they’re teenagers. Being subjected to the Jehovah’s Witnesses as a child was really awful and I knew plenty of kids who were physically abused by their Witness parents, My parents didn’t spank a lot but I knew plenty of witness kids who had black eyes and broken spirits. And in that religion, the Witnesses are all there is. There is no pastor you can go to for help. If you don’t obey your parents completely, the elders are just as likely to disfellowship you from your Kingdom Hall for being a bad influence.
Are you getting the picture yet?
I’ll go with the now sober parents for $1000, Alex.
Has Diana Ross even been seen? She seems MIA
Diana Ross released a statement saying she was unaware that MJ had named her as alternative guradian; that they had not discussed it prior to his execution of this will. Anyway, by all accounts, Ross has been a good mother, alcoholism, notwithstanding. Reports are that her kids are happy and well-adjusted. MJ probably chose her for that reason also because she had been a superstar herself and can handle motherhood and fame.
I vote for Ross over Rowe. The woman was okay with being excluded from the kids lives when MJ was alive, so why should she get them now. As a mother, I don’t understand how any woman brings a child into the world and voluntarily agrees to be excluded from their life. That’s beyond strange to me.
Witnesses are nutjobs for the most part. I have a relative who became a Witness, as an adult, and would no longer speak to his mother because she wasn’t a Witness. He didn’t go to her funeral either. He was her only child. When one of them is hospitalized, a fellow “brother” or “sister” is always at the bedside to make sure the care provided is in keeping with their practices. They’re more than a little wack.
Hey, good news, RD. The sun has broken through the clouds a little bit here and the temperature soared into the sixties! Thundershowers expected later, but right now, not too bad.
Quick, BB! Go take a picture! Maybe you can have it blown up and hang it on your wall as a mural.
I didn’t know Jim Bunning had that many brain cells left. Good for him for briefly calling Geithner on his BS.
And yes, sexism costs bigtime! Imagine if Hillary and Shiela had been able to put their heads together instead of Summers, Geithner, and Obama?
I love your new avatar.
yes-you worrying about leaving that skyline bb?
I too was startled to read that Bunning could ask an intelligent question.
Maybe he’s had some stem cells injected….no, wait, he doesn’t believe in killing babies… or science, actually.
” Summer has arrived in NJ. ”
Congratulations! It’s been a long time coming. Never underestimate the power of a little sunshine.
Well, it comes and goes. Right now, it’s overcast again but yesterday was more like s(pring)ummer.
What we need is a good hurricane to sweep a stagnant front out to sea.
A couple weeks ago I heard newsmen commenting on an earlier bit (that I had missed) that said that the great plains states and the northeast were supposed to have a year of no summer due to continual thunderstorms. How you can have rain in the great plains and the northeast without having it go over the Midwest (like Wisconsin where I live) I don’t know but that is what someone is predicting.
We’re having a drought in Seattle. No rain, temps in the 80’s. It’s kind of funny, I’m not use to having to water the yard for the 4th of July. Usually it’s nice and damp and safe.
Personally, I am opposed to giving them more stimulus money. Not because I don’t think a big stimulus would work, but because I have NO confidence whatsoever that the money wouldn’t disappear down the black hole of their pet interests.
Tell ya what – if the next big stimulus consists of $10,000 for every man woman and child in this country, to go out and SPEND, and interest-free govt loans to new small business startups, then I’m in.
Funny how the fact that we need economic activity to get the ball rolling never translates to giving any “stimulus” to people who would actually SPEND it, and invest it in real job-creating ventures. Nope, it goes to pad the already fat bank accounts of the hoarders, or to pay off congresspersons with useless pet projects so as to “get them on board”.
I agree with Krugman in theory. He’s right about how it’s SUPPOSED to work. But I don’t trust this administration farther than I could spit when it comes to execution. I’m tired of bait-and-switch, and unless these criminals can prove to me that they will use that money to STIMULATE, and not pay off their cronies, then they can go suck eggs before I’ll support giving them another dime.
Indeed. The bailouts and stimulus are the new buzz words for ” trickle down ecomonics ” ….with the same results. The stream drys up before it gets to anyone out of the Villiage. Stimulus sounds better. ” Trickle down ” always remined me of being pissed on…it’s too close to the truth to stay in use! lol!
Yep. “stimulus” is the new “trickle down”. They are lying bastards, and have yet to demonstrate they can do the right thing when we the taxpayer graciously give them the money with which to do it.
I don’t give money to whining heroin junkies so they can “go buy a good meal”, and I’m not supporting giving any more money to these crooks. Not because I don’t believe that junkie could use a meal, but because I am not stupid enough to believe that’s where the money will go.
Go ahead and paint your doomsday scenarios, try to make ME feel scared and guilty for that. Go ahead. My answer will be a big Fuck You, you lying sacks of pus. I don’t fork out money to con-men.
they are scary.
Yes! Yes! My feelings exactly but said a lot better. Thanks.
“There is something deeply unsettling going on here if the Obama administration is willing to trash one of the best departments it has in order to give the finance guys what they want.”
They were his earliest supporters, so the only thing surprising is that he has not thrown them under the bus yet, along with all the rest of us. But I guess he wants money for his next campaign.
djmm
Great piece as ever. I was laughing as I got down to MJ part only because it seems to completely summarize the problem.
Suppose we have a whole passle/possie? of messed up bboomers running it all?
It sure seems that way, no? It sure seems like nobody knows what is going on and that old things we thought were real like banks or the FDIC that we all grew up with aren’t there anymore? Dunno.
This madness is being reflected on TV? On the ads and also the comedians? I tuned in and watched a show the other day — I think it was called John Stewart? He has a chick playing dumb and eating mayonnaise? While talking about babies wearing high heels and those “snuggle” outfits ala burka?
I’m like?
Hmmmmmmmm………………..
WTF?
It all fits somehow. Into the scheme of what culture seems to have devolved to? It’s?
Very doubleplus non Sarkozy in a way? We must look like that?
Ugh.
When we are not!
My fave part of this read is that fab red mill. It seemd to add a touch of reality in the same way your voice on the page always does into what a three ring circus this whole thing has become.
ps: I once had a senior client who was JW. It was impossible. I hear you.
Kid, it made you a writer…..!
hugs.
ps: gxm17 was by my pad and I’m not clear on whether this one had a falling out at Conf. Know that an argument with me when I am writing my field? Don’t. I back it up with research and damn RD — I think……we have a big effing prob on our hands, GF.
I’ll be giving you the facts and nothing but.
O to own that little red barn……..!
Escape.
One more thing about MJ? Jerry Brown (fab Dem) was named in his will! I might tweet that, just now. Looks like MJ loved Jerry just like me! It had to be all the great stuff he’s done up Oakland way.
Gov of CA big money has boiled down to Jerry Brown or Meg Whitman — just saw the news…..
[…] place durign the FDR era. They are getting help from our “Democratic” administration. Riverdaughter links to this New Yorker article and remarks: Bair, described as “not a team player” by Tim […]
Breaking News
http://www.msnbc.msn.com/id/31726640/ns/politics-more_politics/
Sarah Palin resigning as governor of Alaska.
I know! I just saw this at Tennessee Guerrilla Women: http://guerillawomentn.blogspot.com/2009/07/breaking-governor-sarah-palin-will-not.html
I wonder the reasons why she plans to resign. If she doesn’t plan to run in 2012 why else would she do it? Wow. Heads will surely explode and I expect the misogyny to be rampant for the next several weeks.
Can’t argue with this part of her statement. If politics isn’t a superficial piece of shit profession now, I don’t what is.
“We know we can affect positive change outside government at this moment in time on another scale and actually make a difference,” she said, adding that politics had become a “superficial, wasteful bloodsport.”
woohoo
Tell it like it is Sarah!
Fox is reporting the same thing. Why so early? I could see it as a good move in 2010, but I think it’s premature.
No it is not. Good move Sarah. Lets kick some ass Sarah.
I think some people will say she couldn’t stand the heat so she got out of the kitchen. I think the more time she had under her belt as gov of Alaska, the better it would be for her in 2012. I think she should have stayed through 2010.
No, please like Sarah is the type not to withstand heat. She wants to do what is best for Alaska and this will ensure a Repub will have a good chance of coming in 2012.
Sarah steals the show again. She is taking the fight in a new direction.
If that no account ass Obama could run for president after a couple hundred days as senator of Illinois, my Sarah has no reason to hold her head down in shame. The spotlight was taking time from Alaska and state issues.
I am elated and Sarah has impressed me more than ever today.
The speculation over the reason why now begins. I think that this is not a wise career move for her unless she’s been offered a higher position within the Republican Party. I agree with Joanie that if she does in fact run in ’12 that she will be labeled weak for not finishing the entire term as governor. It could very well be that her family has had enough of the attacks and bad press. Or maybe it is because of something we have no idea about yet (like a health reason).
Well, the point she’s making is that her staying would have been bad for the state. Defending attacks was taking up time and money – not fair to the state.
Just got a phone call from Carol at Conservative Women United–.donations to Sarah Pac just went up 40%.
I am going to do the same.
Happy 4th of July guys. This is amazing.
afrocity, Think we may get an Independent candidate in 2012? I’d sure love it.
I genuinely hope she runs. The Republican Party needs a new direction. Someone like Sarah Palin could attract moderates.
She said she would support candidates that were good, regardless of party! Principles before Party?
We Must Divest From Misogyny, Our Lives Depend On It!
Hmm, interesting. The support candidates bit (vs. being one) makes me wonder if she’s going to move behind the scenes and become a king maker. Anything is possible.
Or queenmaker?
Yup. I think the talking heads are exploding, trying to find all the hidden meanings and “real reasons”, because they can’t wrap their heads around the possibility that she is exactly who she seems, and her reasons are exactly the ones she just told them.
She’s not playing the game according to their rules, and they are at a total loss. LOL!
What the hell is going on? She’s quitting?
Yup! 😦
We Must Divest From Misogyny, Our Lives Depend On It!
She’s on now – making it very clear that she stepped down because the endless allegations, ethics probes, etc were making it impossible to do the job, tying up time and resources, and Alaska deserves better.
She’s doing VERY well here.
“Politically smart” or not, this was a DAMN ballsy move, and I think an honest one. I respect that.
Ah, that makes things more clear. Continue and draw all that heat, which quickly becomes all negative and very little positive, or step aside, go raise money everywhere, give speeches, etc., and prepare for 2012. So there is negative with quitting, but positive spin because it was distracting, etc., and she has more time to focus on raising money, etc. Ballsy man.
Oh, she’s running for President. I’d be very surprised if she doesn’t.
The resignation is very interesting. This early certainly helps republicans hold the governor position, but then it’s Alaska, was there really any worry there? So I’m not sure about that. Early is also an issue she will have to defend. Does she need something like that along with the already high pile of misogyny manufactured stuff?
But then again, raising money and heavy campaigning this early would be a big help because you just have to think about the kind of money Obama has and will raise to understand how early you need to be running.
So either it’s all about 2012 and getting out as early as possible because of how daunting the money task is, even if there are negatives associated with leaving early, or she has completely different plans. I’m guessing 2012 though.
Of course an alternative is something in the closet. I’m sure there will be lots and lots of manufactured rumors about that.
I love Sarah Palin. It’s just too damn bad that the shitbags in the media and the looneys who kept filing ethics charges against her couldn’t be stopped. She’s doing the right thing for her State. Now, why can’t teh One do the right thing for America and resign??
New Post up — a place to discuss the recent news about Sarah Palin
I think she’s about to switch parties. That or go Indy.
I don’t think she’ll switch. Her statement that politics has become a “superficial wasteful bloodsport” would set her up as a good independant pick. That is if the constituency isn’t tired and jaded with change and an outsider(who isn’t) by 2012.
I’m saying my prayers.
Ooooh, ooooh, I know, I know. Here’s the thing. The knows full well what happened to Hillary in the Dem primaries (i.e., won but wasn’t allowed to be the nominee) and how that’s almost certain to happen to her too. Just look how the main Repub power brokers constantly omit her from discussions. Soooo, she’s going to be a Repub over the next couple of years, raising money, giving speaches, etc., but when it comes time to run, she will side-step the useless party system (just like Hillary should) and will run as an independent. Imagine Obama for the Dems (with a faltering economy still) and some dweeb on the Repub side like Romney, and then Sarah as the third person. She could have a real chance of winning that way. Of course Hillary could do the same, esp. if she’s pushed out of State, but sadly I think she’ll stay a Dem no matter what.
Anyway, it’s a theory.