Failing Upwards: The Wall Street White House

We are seeing belated glimmers of understanding of the credit crisis from the White House. Still nothing on the Ratings Agencies, and Glass Steagall, and too little on Derivatives and leverage, but at least there seems to be some recognition on TBTF (see The End of Too Big to Fail ?).

However, where there is real despair has been in the cult of the sacred cow appointments. The latest ugly data points: The number of Wall Street (versus business or academic) appointments. To wit: How Goldman Sachs and Citi Run the Show via Andrew Cockburn.

Cockburn details the following recent Wall Street transplants who are running things in the Adminstiration:

• Robert Hormats, Vice Chairman of Goldman Sachs, is to be installed as Under Secretary of Economics, Business, and Agricultural Affairs.

• Jacob Lew, Chief Financial Officer of Citigroup Alternative Investments Group, as Deputy Secretary of State
(Lew’s dept. lost $509 million in the Q1 2008)

• Michael Froman, Citigroup, Deputy National Security Adviser for International Economic Affairs. Froman was formerly Chief of Staff to Robert Rubin at Treasury, before following him to Citi.

• Froman’s deputy, David Lipton, ran Citi’s global country risk management effort.

• Lewis Alexander, Citigroup’s chief economist and now Counselor to Treasury Secretary Timothy Geithner

• Neal Wolin, President and COO, Hartford Insurance Company, Property and Casualty Group now Deputy Treasury Secretary (Hartford received $3.4 billion in TARP funds).

• Gary Gensler, Goldman Sachs partner, now Chairman of the Commodity Futures Trading Commission Note: It was Gensler who was a key proponent (as Clinton’s Assistant Secretary of Treasury) in pushing the Commodity Futures Modernization Act of 2000.

• Mark Patterson, Goldman Sach’s lobbyist, now Treasury Chief of Staff

• Linda Robertson, Enron lobbyist, Chief PR Federal Reserve

Defenders of the Status Quo!


The Wall Street White House
Counterpunch, July 2, 2009

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