Obama Follows Clinton, Boards the Millionaire Speech Train to Wall Street

Democratic Party loyalists didn't decide the last election, and they won't decide the next.

by Gaius Publius

“I never had any money until I got out of the White House, you know, but I’ve done reasonably well since then.” 

—Bill Clinton

Like Bill Clinton before him, ex-President Barack Obama has gotten on the Wall Street-financed train to millionaire riches. Clinton:

On December 21, 2000, President Bill Clinton signed a bill called the Commodities Futures Modernization Act. This law ensured that derivatives could not be regulated, setting the stage for the financial crisis. Just two months later, on February 5, 2001, Clinton received $125,000 from Morgan Stanley, in the form of a payment for a speech Clinton gave for the company in New York City.  A few weeks later, Credit Suisse also hired Clinton for a speech, at a $125,000 speaking fee, also in New York. It turns out, Bill Clinton could make a lot of money, for not very much work. [emphasis mine]

Times change, prices go up, but the song remains the same. Obama:

Last month, just before [Hillary Clinton's] book “What Happened” was published, Barack Obama spoke in New York to clients of Northern Trust Corp. for about $400,000, a person familiar with his appearance said. Last week, he reminisced about the White House for Carlyle Group LP, one of the world’s biggest private equity firms, according to two people who were there. Next week, he’ll give a keynote speech at investment bank Cantor Fitzgerald LP’s health-care conference.

Obama is coming to Wall Street less than a year after leaving the White House, following a path that’s well trod and well paid. [emphasis mine]

If the first figure is his fee, as it reportedly is for the Cantor Fitzgerald speech as well, he'll pocket $1.2 million from three Wall Street speeches in about a month's time. 

The issue is not just the cashing in on career-long, eager service to mega-wealthy Wall Street bankers — including especially his failure to prosecute not one of them for massive and systemic fraud, let's remember. That's the smallest of the problems with this story. A larger issue is its effect on the desperate attempt of the Democratic Party to distance its current self-presentation, "The Party That Speaks For The People," from its most recent self, "The Party Of The Top Ten Percent." Or at least, its attempt to appear to create that distance. 

This move by Obama won't help those attempts at a new-minted reversal of appearance. As the article points out, "While he can’t run for president, he continues to be an influential voice in a party torn between celebrating and vilifying corporate power. His new work with banks might suggest which side of the debate he’ll be on". No one in the bottom 90% — most of us, in other words — is "torn between celebrating and vilifying corporate power."

It's a come-to-Jesus moment for the Democratic Party, and Obama brought Eve's apple to the discussion.

A Pre-Revolutionary Nation

The nation is at a crossroads, in a pre-revolutionary condition, and so is the Democratic Party. The revolution in the nation is proceeding. Ever since Obama's betrayal of his mandate in 2009, discontent with Establishment rule, by supporters of both parties, has grown almost geometrically, starting with the Democratic Party disaster in 2010. In 2016 that revolt kept Republicans in charge, despite a Senate winnable by the Democrats, and it helped put Trump and Pence in the White House for the next four years.

Revolt against Establishment rule would have put Sanders in the White House instead, if Democratic leadership had allowed it. Consider:

The argument against Sanders by Democratic leaders is that people who filled football stadiums to support Sanders weren't Democrats. Neither are most voters, however, as the chart above shows. Think that through.

A Price for Democratic Party Dithering

And now the debt for Democratic Party misdeeds, for sticking with the Establishment playbook, comes due. In 2018 and 2020 the nation will get its last real chance, before our twin tsunamis hit, at putting leaders in place to actually deal with them. Those twin tsunamis — bankruptcy-, death- and anger-fueled revolt against rule by the rich; and fossil-fueled destruction of a climate that can sustain seven billion living breathing humans. Both crises are reaching social and political tipping points. Neither will wait while Democrats continue to dither and the Party's still-in-place leaders try to stretch their corrupt profit-taking practices into an indefinite future.

Will Party leadership convince enough voters that they hold a better answer than the next faux-populist demon from the right, our nation's own monster from the id? Or will apathy to Democratic Party corruption suppress turnout enough to keep Republicans in power in 2018 and elevate their next monster from the id to the White House in 2020?

It's not like Obama is an outlier among Democrats. The Party is shot through with this kind of corruption. It's put up or shut up for the nation, and put up or shut up for Democratic leaders as well.

Needless to say, Obama's new Wall Street wealth, and Democratic Party defense of it, isn't likely to help either us or them.

Quid Pro Quo for Carlyle Group?

One final point. In the case of his paid speech to mega-wealthy equity firm Carlyle Group, there do seem to be quids and quos. From the International Business Times (emphasis mine):

Several years after private equity firm Carlyle Group LP successfully pushed the White House to relax Environmental Protection Agency rules to the benefit of two Carlyle-owned oil refineries in Pennsylvania, former President Barack Obama, as part of a series of paid speeches, made a stop at its conference last week.

Bloomberg first reported the former president’s recent paid speech rounds Monday, citing “two people who were there” at a Carlyle event in Washington, D.C., last week, where he “discussed his life and the decisions he made in the White House.” It’s unclear whether and how much he was paid by Carlyle, which declined to comment to International Business Times, but Bloomberg reported that he received $400,000 for a Northern Trust Corp. engagement in August, and earlier this year won the same amount from the investment bank Cantor Fitzgerald, for which he was slated to speak again next week.

After listing Carlyle Group executives who also held positions with the Obama administration, IBT writes this:

Back in 2013, Carlyle — working in tandem with Delta Air Lines, which also owned a refinery — met with Obama’s economic adviser Ronald Minsk and an EPA official, and signed a letter to the EPA with Delta and a refinery union leader as part of an effort to lobby the agency to relax its steadily rising requirements for mixing biofuels in petroleum-based fuels as part of the Renewable Fuel Standard (RFS) program, Reuters reported in 2014.

While a boon for makers of corn-based ethanol, the requirement that U.S. petroleum output include 13.8 billion gallons of “conventional biofuel” each year would prove expensive for oil producers, as they’d have to either purchase the alternative fuel or buy a limited supply of compliance credits rapidly escalating in price. The following year would bring with it a 14.4-billion-gallon mandate. Following another letter to the EPA from then Pennsylvania Governor Tom Corbett and his Delaware counterpart Jack Markell, the EPA announced in November 2013 that it would lower the next year’s requirement to 13 billion gallons instead of 14.4 billion, causing politicians from big corn-industry states, such as Rep. Steve King (R-Ia.), a denier of climate change, to balk. The watchdog group Citizens for Responsibility and Ethics in Washington (CREW), citing the Reuters investigation, sued the EPA “for failing to provide documents regarding oil industry efforts to influence the 2014 Renewable Fuel Standard,” according to a CREW press release.

“It certainly seems as if the administration has backtracked on its commitment to renewable fuels. The question is why. Was there a back room deal orchestrated by big oil and high ranking officials in the Obama administration?” Melanie Sloan, then the group’s executive director, said in the 2014 release. “Even though it is nearly 2015, the renewable fuel standards for 2014 still haven’t been released. Is this to avoid potential political fallout in the mid-terms for siding with the oil industry over the biofuel industry?”

In 2015, Delta and Carlyle, along with oil giant Valero Energy Corp. and Minsk, by then no longer Obama’s economic adviser, renewed their efforts to change the EPA RFS rules, this time by pushing the agency to relegate the burden of compliance with required biofuel levels to fuel blenders, rather than refiners.

Before the campaign to influence the EPA’s fuel-composition requirements began, Obama’s administration played a helpful role in Carlyle’s acquisition of the refinery as well.

There's more in the IBT piece. This isn't a smoking gun, of course. But there is a corpse (the biofuel standard) and a clear beneficiary, or several. One of those beneficiaries, the Carlyle Group, seems to have just said thanks.

Obama's future is quite secure and getting more secure by the day. I'm not sure the same can be said for the Democratic Party's; quite the opposite in fact. And I strongly suspect, if true, the two outcomes will prove connected.

GP
  

THE BEAR STEARNS FIASCO-- AN OUTGROWTH OF GOP POLICIES AND RIGHT WING IDEOLOGY

$1.2 million Bear Stearns Bldg. thrown into the deal for free

A few days ago we looked at the collapse of the Republican Party honeypot, Carlyle Capital Corporation (part of the notorious Carlyle Group). They defaulted on $16.6 billion in loans from many of the world's major banks. None of the GOP bloodsuckers, particularly the Bush family and their circle-- who have raked in unbelievable profits from their participation in Carlyle-- are in any way being held to account for this, of course. Those who write the laws, write them to effect what other people do, not what they do. In today's NY Times Gretchen Morgenson asks some questions about the Wall Street meltdown in general.

WHAT are the consequences of a world in which regulators rescue even the financial institutions whose recklessness and greed helped create the titanic credit mess we are in? Will the consequences be an even weaker currency, rampant inflation, a continuation of the slow bleed that we have witnessed at banks and brokerage firms for the past year?

Or all of the above?

Stick around, because we’ll soon find out. And it’s not going to be pretty.

Agreeing to guarantee a 28-day credit line to Bear Stearns, by way of JPMorgan Chase, the Federal Reserve Bank of New York conceded last Friday that no sizable firm with a book of mortgage securities or loans out to mortgage issuers could be allowed to fail right now. It was the most explicit sign yet of the Fed’s “Rescues ‘R’ Us” doctrine that already helped to force the marriage of Bank of America and Countrywide.

But why save Bear Stearns? The beneficiary of this bailout, remember, has often operated in the gray areas of Wall Street and with an aggressive, brass-knuckles approach. Until regulators came along in 1996, Bear Stearns was happy to provide its balance sheet and imprimatur to bucket-shop brokerages like Stratton Oakmont and A. R. Baron, clearing dubious stock trades.

On Monday one of the Republican authors of the economic collapse we are starting to experience, SEC Chair and former right-wing Congressman Christopher Cox, blatantly lied to the public by claiming the big Wall Street firms "were resting on comfortable capital cushions." They aren't-- and no one inside the Robber Baron-oriented Bush Regime knew that better than Cox. Today Bear Stearns would have had to file for Chapter 11 bankruptcy protection or sell itself to the highest (low) bidder. JP Morgan bought it at $2 a share, shares that were trading for $50 a share a few days ago-- and $170 a share one year ago. Put another way, "the price represents a startling 93 percent discount to Bear Stearns’ closing stock price on Friday."

Bankers and policy makers raced to complete the deal before financial markets in Asia opened on Monday, as fears grew that the financial panic could spread if Bear Stearns failed to find a buyer.

...The companies said that the Federal Reserve would provide special financing in connection with the transaction and that the Fed had agreed to fund up to $30 billion of Bear Stearns’s “less-liquid assets.”

This sale includes the Bear Stearns Manhattan headquarters, which alone is worth over a billion dollars. Still seems like a risky purchase for JP Morgan, although I suppose they had no choice because the size of the crash on Monday had they not done it would have been incalculable. The laissez fairies who are all hands off when ordinary Americans lose their homes and jobs and savings-- often due to corruption and incompetence at the top of the economic ladder-- but when these big corporations start to totter, due to their own malfeasance, the government steps in with our tax dollars to save the day. And no one has to give up any of those six and seven figure bonuses or severance packages. And to top it off the Fed announced today that they are lowering the interest rate by another quarter percent-- on top of the $200 billion they pumped into the system Tuesday. You notice how wan Bush looked and how he bumbled his way through his speech even more lamely than usual on Friday? Even he understands what's happening. Wait til the big banks report earnings-- losses-- later in the week.

As I hit the sack Sunday night in Los Angeles, all the Monday morning stock market openings in Asia are tumbling drastically, a big vote of no confidence in the Bush Regime's lame efforts to contain the financial meltdown. Tokyo's Nikkei index dropped 4.2% to a three year low and markets in Korea, Hong Kong and Australia are also sinking.


6:00 AM (PT) UPDATE: AS BAD AS I PREDICTED LAST NIGHT

This morning's Wall Street Journal tries to make some sense out of the mess, or, at least, gets the facts on the table. Paul Krugman, in this morning's NY Times is, as usual, more frank and to the point: The B Word. The Bush Regime is lying about not using taxpayers' money to bail out the big financial institutions and a bailout is inevitable. Why?

1- What goes up (housing prices) must come down
2- Risk exists
3- GOP ideology that regulation is bad led to inevitable and catstrophic consequences

The U.S. markets aren't open yet. CNN says they will open 200 points lower. Markets in the rest of the world were dramatically down. And what was up? The Euro and other currencies against teh dollar and the price of gasoline (not to mention inflation and unemployment). Even the Canadian dollar is now trading higher against the U.S. dollar!

REPUBLICANS DON'T JUST STEAL FROM US-- THEY STEAL FROM EACH OTHER TOO; IT'S IN THEIR POLITICAL DNA

GOP learns greed not so great as once thought

What most Republican politicians have in common is a sense of entitlement mixed with a sense of righteousness that is overlain with an ideology that extols unlimited, unregulated greed and selfishness. For Republicans it was a moment on the road to Damascus when Gordon Gekko (Michael Douglas' Oscar winning character in the 1987 movie Wall Street) intoned his famous lines: "Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge has marked the upward surge of mankind."

Tomorrow's Washington Post reports on the ongoing investigation into massive fraud inside the Republican Party. Earlier today I read about how Lindsey Graham (R-SC), who John McBush plans to make Secretary of Defense, was systematically robbed by one of his assistants over a 5 year period. She got away with over $200,000 from Graham, who made national headlines when he boasted about finding $5 bargains while shopping for carpets in war-torn Baghdad.

But that's small potatoes compared to what Christopher J. Ward, the "gold standard" among GOP accountants has been up to in the same time period. He was the treasurer for 83 Republican fundraising committees over the last 8 years. "In the past five years alone, he oversaw the accounting for committees that raised more than $400 million, $368 million of it at the National Republican Congressional Committee." About a month ago he was fired and the NRCC called in the FBI who say it appears that "a significant amount of money" is missing. Money also appears to be missing from the accounts of dozens of GOP lawmakers. You wonder why these clowns have "lost" untold billions to greedy Republican contractors in Iraq?

In an election year that holds dismal prospects for congressional Republicans, possible financial problems at the cash-strapped NRCC are the last thing the GOP needs.

"The House Republican brand is so bad right now that if it were a dog food, they'd take it off the shelf," said retiring Rep. Thomas M. Davis III (Va.), who chaired the NRCC for four years earlier this decade.

The recently indicted Rep. Rick Renzi (Ariz.) and now imprisoned former congressman Robert W. Ney (Ohio), as well as less controversial lawmakers with minor accounting problems, are among the many members of the GOP delegation who turned to Ward to keep them out of trouble with FEC regulators.

Yeah, greed is good... real good.


UPDATE: AND THE GOP HEDGE FUND IS COLLAPSING TO BOOT-- ASSETS SEIZED

The Carlyle Group is a multinational private equity investment firm managing with between $70 and 80 billion dollars. Many believe it to be a slush fund and safe house for Establishment Republicans and their allies and deals primarily in the defense and aerospace industry, energy and power, health care, real estate, telecommunications, media and other areas where the obvious conflicts of interest can be put to the best use. The first Bush and his Secretary of State, James Baker (the one who, more than any other individual gamed the 2000 election that stuck us with the second Bush) are only two of the many crooked politicians who run the firm. Even Bush's mildly retarded son was given a sinecure there (CaterAir)-- before they made him President of the U.S.-- which he managed to turn into a financial disaster, like every single other thing he has ever touched. Former British Prime Minister Tony Blair allegedly was bribed by the Carlyle Group to make sure the sale of a chuck of the British Defense Research Industry was sold to Carlyle. French President Nicolas Sarkozy's brother Oliver helps run the show, as do right-wing former British Prime Minister John Majors, Richard Darman, ex-FCC Chairman William Kennard and Insider crooks and manipulators from all over the globe.

Today it was widely reported that one of their primary divisions, the Carlyle Capital Corporation, a dubious offshore entity designed with malevolence and fraud in mind, went belly-up.

The high-profile downfall, part of the broad turmoil in credit markets worldwide, followed a week of frantic negotiations between the Carlyle Group and a number of lenders. Carlyle Group's three founders as recently as Monday were considering injecting cash into the fund as a way to usher it through the credit crisis.

By yesterday the fund had defaulted on $16.6 billion of debt and said it expected to default soon on its remaining debt. The fund's $21.7 billion in assets were exclusively in AAA mortgage-backed securities issued by Fannie Mae and Freddie Mac, traditionally considered secure and conservative investments, which it was using as collateral against its loans.

In a statement, Carlyle Capital said that it had been unable to meet margin calls in excess of $400 million over the past week and that it expected its lenders to take control of its remaining assets. The lenders, headed by Deutsche Bank and J.P. Morgan Chase, began selling the securities last night, according to a report on the Wall Street Journal's Web site.

Short version: a bunch of corrupt Republicans borrowed over $16 billion from the biggest banks in the world and just defaulted on the loans, but because of legalistic manipulations that defy logic (or fairness), not a single one of them will ever be held responsible in any way. Guess who pays for their incompetence and larceny? Yes, we do.


UPDATE: WOW, THEY STOLE A LOT MORE THAN WAS FIRST THOUGHT

I have no doubt it will get worse as the investigation proceeds but the Post now reprts that the latest celebrity Republicrook transferred as much as a million dollars into his personal account from the NRCC. Can these people be trusted with our money?