Ice Pick Donald's Budget Proposal, "Designed By Robber Barons"

Narcissistic Psychopath by Nancy Ohanian

-by Skip Kaltenheuser

Attending as press, alas, not as a member, I first crossed paths with the Patriotic Millionaires several years ago at one of their events in Washington. At a dinner they hosted afterwards, I had the added treat of Alan Grayson at my table, and was mighty impressed with both the group and with Grayson’s witty comments about naked influence-peddling on the Hill and Congressional hypocrisy. I can’t speak on the whole roster of the group, but those I met were not better-heeled because they started out as trust-funders. They’d combined their abilities with hard work and the businesses they ran represented a wide cross-section of the economy. Many started out as small business entrepreneurs. Usually not glamorous businesses, but clever ideas that bed-rocked well-run operations that after considerable effort had turned out decently well for them. Perhaps that fires their alarm at a deck stacked evermore against the little guy by the big money and complicit politicians taking in what in any sane society would be labeled as bribes. The group knows that as the playing field tilts, the opportunities they enjoyed diminish for others, and that bodes ill for America's economic future.

The group relishes the label “traitors to their class.” The three-legged stool on which the group sits is formed of equal political representation, a guaranteed living wage for all working citizens and a fair tax system.

Trump’s outrageous budget proposal motivated this essay by Morris Pearl, a former managing director at BlackRock, Inc. and chair of the Patriotic Millionaires.

Budget for a Nightmare America
-By Morris Pearl

On Monday, President Trump released his 2019 budget proposal, a plan that outlines a series of massive cuts to vital public programs in the ludicrously titled “A Budget for a Better America.”

While this is just a list of funding ideas that mean nothing without Congressional approval, it outlines Trump’s vision for our economic future-- one that allows us already wealthy people to get even richer, at the expense of everyone else. The chief targets of the budget are a proposed $845 billion cut from Medicare over the next decade, reductions to welfare programs and Social Security, and sharp cuts to agencies that keep us safe like the Environmental Protection Agency and State Department.

Strangely, while the President can’t seem to find the money to fund these programs, he thinks the government coffers have more than enough to fund $8.6 billion in border wall funding and a nearly 5 percent increase to the Pentagon’s budget.

It’s no secret that Republicans have been trying to gut public services for years, so what makes this new plan particularly heinous? It’s not just the immediate spikes in healthcare costs or the loss of crucial welfare assistance. It’s not even the fact that slashing those vital public services that will leave the majority of our most vulnerable citizens in an even more precarious position long-term.

It’s the shameless hypocrisy that comes from the President claiming we don’t have the money to fund all these services when he just gave his friends (and himself) a massive $1.5 trillion tax cut barely over a year ago. You would be hard pressed to find anyone outside of the White House who believes that the country is better off with more tax cuts for millionaires and less funding for Medicare.

To add further insult to injury, Trump’s budget proposal is the largest in federal history, at a total budget of $4.75 trillion. There was clearly no real attempt to limit federal spending, and this budget is going to be dead on arrival in Congress, which leads to the question: what’s the point?

With no chance of this budget becoming law anytime soon, it’s likely, then, that this serves as a blueprint for Trump’s re-election promises. That future is the true danger of Trump’s budget. Even if this is just a posturing plan right now, one that’s completely unrooted in reality, it serves as the economic vision that Republicans will propose to voters in 2020, and one they will try to deliver if elected.

When someone tells you who they are, believe them. If Trump and his Republican counterparts in Congress say they want to cut Medicare, believe them. If they tell you that they want to continue giving tax breaks to the wealthy while that happens, believe them. And you should believe me when I say this vision is bad economics – bad for business, bad for workers, and even bad for us millionaire investors and business people, who depend on healthy and happy consumers and workers to drive growth.

Conservatives rely on the constant refrain that spending is out of control and that cuts are needed to rein it in and balance the budget. But as this budget shows, the cuts come from everywhere except the people and corporations that have the most to give back to the system that allowed us to rise in the first place. It exacerbates our existing inequality by slashing these services and giving us millionaires even more opportunity to avoid paying our fair share. A better America is one that invests its dollars in its own citizens and ensures an equality of opportunity that benefits us all. A budget designed by robber barons to benefit the few, at the expense of everyone else, will not deliver that dream.

Revolving Door by Nancy Ohanian

While I can’t imagine Trump’s budget flying much faster than a lead balloon, it’s a gift to opponents seeking Exhibit A on the hypocrisy of Trump’s campaign claims of helping those in the country who are hurting. How rotten the proposal is was underscored by Pulitzer-winning journalist David Cay Johnston, editor of DCReport.org. Interviewed on Democracy Now!

…this budget is budget lessons I learned, as Donald Trump learned, from dictator Kim. So, the first thing you do is you take care of your military. You pour every dollar you can into a military that is bigger than you need. And that’s your number one goal, to make sure that you have loyalty and stay in power.

Then what you do is you take the disabled and the poor on Medicare, and you cut close to a trillion dollars over the next 10 years out of care for them. You take SNAP, which provides nutrition to pregnant women, children and elderly people and the disabled. “Hey, let’s slash that!”

Education. There were all these students who were ripped off by for-profit colleges that cost four or five times what a community college did, and gave you a lousy education, and some of them went broke. “Make them pay every penny!” They, in fact, say it isn’t fair unless these students pay it back. So they’re taking the side of the bankers against the students.

Housing. Let’s cut money for housing, people who are disabled, people who are on aids, people who are poor. We’re going to cut that. And to New York and New Jersey, by saying, “We are not going to fund the replacement of the 110-year-old tunnel,” through which thousands of commuters and people traveling up and down the East Coast travel every day, tunnels owned by the federal government’s Amtrak—

…what’s important here…is a budget is a statement of values. And Donald Trump has revealed his values. He has the values of a dictator. That’s why I said budget lessons from dictator Kim. And all of his claims about “I love the cops,” and then he took away their ability to take as a tax deduction buying uniforms and guns and dry cleaning and paying union dues; “I love the students,” and he wants to take away the subsidized loans and make people who got for-profit college educations that failed—colleges that failed—to make them pay. Donald Trump has no regard for anyone but himself. And so long as we treat him as if he’s a serious person who has real policies, we’re going to get nowhere. What we need to do is mock him and make fun of him. He’s not very smart, and he doesn’t know what he’s doing.

The Emperor by Nancy Ohanian

Johnston also mentioned some of the disturbing reality of Trump’s tax cut:

"…the economy is already slowing down. And 10 years into this market, which began under President Obama, you would expect it, at this point, to begin to slow down. So, we only saw 20,000 jobs last month. You know, Trump goes around talking about “I have the biggest employment in American history.” That’s not the measure. Job growth is a good measure. Job growth has been about 20 percent lower under Trump than under Obama since the economy turned around. Tax revenues in the last 90-day period were 2 percent lower, which goes right to the heart of how this tax cut for the rich is not paying for itself. And, you know, little-known fact: Donald Trump’s tax law gave 8-year loans at zero interest to all the multinational companies that had siphoned profits out of the country, and it also gave them a discount. So, I’ve written about how Apple alone-- just Apple-- will turn a $120 billion profit off the Trump tax law, $120 billion."

If the Democrats play their cards right, they can use Ice Pick Donald’s budget to help sink him in 2020, and to take the Republican Senate down with him. Consider how this budget will play in the critical counties in the states Trump flipped, where exasperated voters who voted for Obama twice, hardly racist deplorables, stood Trump up as their default middle finger to the Washington establishment. These are voters in areas where, in the immortal words of Wall Street’s Manchurian Treasury Secretary, Timothy Geithner, people “foamed the runway for the banks.” These are areas where good jobs rusted out, leaving people scrambling in futile efforts to stay even, where affordable educational opportunities for their children faded away. These are communities where families shoulder disproportionate tragedies from America’s endless wars, and from the pharmaceutical assaults of opioids.

In many of these communities Bernie outperformed both Hillary and Trump in the 2016 primaries. For these citizens, Bernie’s well-articulated and steady message will continue to resonate.

Why Do Catastrophically Failed Economists Keep Getting Recycled By Establishment Politicians?

I was happy for the U.K. last week when I read that the newly elected leader of the Labour Party, Jeremy Corbyn, had selected two of the world's most brilliant economists as advisers, Thomas Piketty and Joseph Stiglitz. Corbyn's comment to the media on his selections: "I was elected on a clear mandate to oppose austerity and to set out an economic strategy based on investment in skills, jobs and infrastructure. Our economy must deliver security for all, not just riches for a few."

How different from that are the grotesquely failed economic advisers most of the U.S. presidential candidates are recycling, self-serving garbage like Glenn Hubbard, Robert Rubin, Lawrence Summers, Kevin Warsh, Tim Geithner, Alan Greenspan, Ben Bernanke (oh, this is convenient), Arthur Laffer, Stephen Moore...?

I have no doubt Jeb, Rubio, Trump and Fiorina would try to bring back Andrew Mellon, clueless Treasury secretary from 1921 to 1932 under Warren G. Harding and Calvin Coolidge, if they could. Cruz, on the other hand, might opt to resuscitate Roger Taney, who was Treasury Secretary-- also the first nominee to any Cabinet position to be rejected by the Senate when his recess appointment failed-- before becoming the worst Chief Justice of the Supreme Court in 1836.

Let's start with an excerpt from NY Times economics columnist Jeff Madrick's book Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World:

Economists were indeed set back on their heels by the financial crisis of 2008 and by the depth of the recession and the levels of unemployment that followed. Though not well implemented, the aggressive financial rescue efforts of the government in 2008 nevertheless kept matters from getting far worse that year. Were it not for the social programs started in the New Deal of the 1930s and expanded in the 1960s, including Social Security, unemployment insurance, and Medicare, and those adopted later, including the earned income tax credit and food stamps—the great embrace of government, not its denigration—the nation would likely have entered a full-fledged depression by 2009. For all the criticism, President Obama’s roughly $800 billion stimulus package of government spending and tax cuts was also a vital contributor to a softer landing for the economy in 2009. Non-laissez-faire economics saved the day.

... In 2001, after the Clinton administration had left office, Lawrence Summers, a Harvard professor and Bill Clinton’s third Treasury secretary, endorsed this new faith in free markets and opposition to government intervention as a victory of new ideas. By contrast, in the 1930s John Maynard Keynes had advocated aggressive government spending—outright budget deficits—to stop recessions and support vigorous recoveries. “The political debates take place within a universe that is shaped by the development of new ideas,” Summers told an interviewer, attributing the change to good, fresh thinking, not merely the return of an old laissez-faire ideology in a more politically conservative time. “Of those new ideas, none is more important than the rediscovery of Adam Smith and the idea that a decentralized system relying on price signals collects information and provides much more insurance than any kind of centrally planned or directed type of system.” Summers, a onetime Keynesian, had for the moment changed his tune, and in this he represented economists generally.

Economists basically discarded Keynesian policy and relied on a narrow version of monetary policy: the manipulation of interest rates by the Federal Reserve, the nation’s central banking system. “We thought of monetary policy as having one target, inflation, and one instrument, the policy rate,” conceded Blanchard. “So long as inflation was stable, the output gap [the difference between potential and actual GDP] was likely to be small and stable and monetary policy did its job.” He noted that “old-style Keynesian stimulus,” by which he meant more government spending, was now “secondary.”

During this period, Clinton, the first Democratic president since 1981, chose to act on the advice of Summers and Robert Rubin, his second Treasury secretary and a former head of Goldman Sachs, and pay down the nation’s debt before seriously raising public investment. The federal deficit was widely thought to deter growth, limiting the money available to private businesses to distribute the nation’s savings. In Clinton’s last year in office, the level of federal public investment as a proportion of GDP was lower than in Ronald Reagan’s last year in office, especially for physical infrastructure and education spending. It was also substantially lower for research and development. The policy was part and parcel of the laissez-faire revolution.

Had economists been fully dedicated to their free-market views, they would also have been up in arms over the glaring lack of regulation of the new and deliberately opaque derivatives market on Wall Street. Based on securities that could be bought and traded with little down payment, these derivatives were at the heart of the financial crisis. If someone is selling a good or a security, competitors cannot offer it for less if they do not know the price asked. Yet the Clinton administration, following the new economic thinking, prevented regulators from setting federal standards of openness in this market.

The most damaging of the new financial derivatives were credit default swaps, a technical name for insurance sold by financial firms to protect investors against price declines of securities. The insurance to protect against losses on mortgage securities became especially popular as the housing boom progressed-- particularly insurance for securities based on subprime mortgages. Because the prices of these insurance-like derivatives were traded secretly, however, there was not adequate competition to keep prices sensible. Economists should have rallied in opposition to the lack of rules, but I could find no research papers done on the phenomenon until it was too late. Some investors and professional traders bought the insurance at high prices, some sold at low prices. Moreover, there were no legal requirements to hold a reserve to ensure that someone selling insurance could pay off—as is done with traditional life and property insurance. When the value of mortgages collapsed as the housing bubble burst, those who sold such insurance-- notably the insurance giant AIG-- could not pay off, making the crisis far worse. Investors who thought they were protected against falling mortgage securities were now losing fortunes, forcing them to sell other securities to meet their liabilities. This drove the prices of other securities still lower, and market prices fell further in a vicious spiral.

Economists also said little when they should have proverbially shouted about the obvious conflicts between those who issued securities and the agencies they hired to rate the securities they sold. These agencies, Standard & Poor’s and Moody’s, were inclined to make their clients happy and gave their securities high ratings, even those based on subprime mortgages. Giving unjustifiably high ratings to the securities of clients who were paying for them seems, well, almost inevitable. After the collapse, the agencies sharply, and with at least temporary embarrassment, reduced their ratings for the large majority of securities they had previously given their highest ratings, the value of which had often fallen to zero.

“Get the incentives right” had become a cliché for economic reform, especially in poorer developing nations. But financial incentives were awry on Wall Street. Traders were paid lavishly when they were correct but were not penalized commensurately when they were wrong, thereby incentivizing them to take risks. Much of the profits earned on trading the new derivatives were kept secret from buyers and sellers so that customers could not seek a better deal elsewhere. It was said that the very high compensation of bankers and traders reflected their unusual talents and that high profits for financial institutions meant they were contributing ever more to the nation’s prosperity. Economists were barely disturbed by such implausible nonsense. Meanwhile, by contrast, laws to set higher minimum wages, it was argued by many economists, would only distort labor markets and result in lost jobs.

Wall Street itself exhibited the characteristics of a monopoly. Commissions were fixed at abnormally high levels for most financial transactions, suggesting the lack of true competition. Fees earned by bankers on transactions were always high but did not fall as a percentage of the soaring value of financial assets, which under normal competitive conditions should likely have been the case. Blanchard, looking back, wrote: “We thought of financial regulation as mostly outside the macroeconomic policy framework.” The silence of so many economists when even their most bedrock conservative principles were violated was disturbing. They had spoken up as a group before, sometimes vociferously, about the benefits of free trade, for example. Their current views on laissez-faire economics, including financial deregulation, were now markedly sympathetic to big business and Wall Street.

In the 1980s, 1990s, and 2000s, the prices of stocks, bonds, and housing rose to untenable levels on the watch of free-market economists who preached deregulation. During this period, over-speculation led to serious financial crises at home and abroad as free-market advocates successfully reduced controls on lending and investing around the world. A series of major financial crises affecting America began with a 1982 Mexican financing debacle involving U.S. banks and climaxed with the 2008 crisis. Mexico had borrowed significantly from U.S. banks in the 1970s and early 1980s, the careless banks essentially speculating on the future strength of the Mexican economy with loans to the government and for spurious industrial projects. With no guidelines from government or international institutions, the banks had recycled petrodollars through loans especially to Latin America; a favorite recipient was Mexico. When interest rates were pushed up sharply by Paul Volcker’s Federal Reserve in order to stanch U.S. inflation, interest rates on Mexican debt also rose sharply. At the same time, a resulting worldwide recession undercut Mexico’s oil exports. The nation declared that it could not pay its debts to American banks. The Fed and the International Monetary Fund, a world lending organization, helped bail out the banks.

Ensuing financial crises were variations on this theme. The investors in equity incurred huge losses because of overly optimistic speculative investments that initially earned a lot of money and then went bad, but banks were often bailed out. Economies typically slid into recessions when inflation rose and the prices of these financial assets fell. The 1982 recession in the United States, for example, was the worst since the Great Depression-- until the recession of 2008. Despite wide-eyed assertions by well-schooled economists that Americans were now enjoying the Great Moderation, the financial collapses and ensuing recessions had, as noted, cost Americans trillions of dollars in lost wealth and jobs, diminished investment, and failed companies. The U.S. housing crash that began in 2006, along with the accompanying collapse in stock prices, reduced the wealth of Americans by roughly $8 trillion by the time it hit bottom. This crash was also of course the result of overspeculation fueled by borrowing-- homebuyers and investors in complex and hard-to-understand mortgage securities kept buying at ever-higher and less sensible prices. While average wealth rose again in the years after the crash, the money essentially went to the wealthy. Banks had been rescued, stock prices came back, and the well-off held the large majority of stocks; housing prices rebounded only partially. The high-technology stock plunge that occurred in the early 2000s resulted in comparable losses for most Americans. Most high-technology stocks did not recover. Many economists insisted such speculation was necessary to encourage risk taking.

...The free-market economics that had been in vogue were now failing badly. The old remedy advocated by John Maynard Keynes to cure recession—federal spending that would lead to a temporary budget deficit-- had been accepted momentarily but was again soon disdained by many. Since the inflationary 1970s, a federal budget deficit was increasingly seen as the culprit, even among Democratic economists, and this view has been hard to shake completely even after the major recession. The thinking was that a deficit often, even usually, created too much demand for goods and services, thus pushing up prices. It created more demand than the wages and profits the economy itself was generating, requiring borrowing to do so. Once slack was taken up, it was believed, a deficit resulted in an overheated economy. Keynesians typically argued with the new free-market orthodoxy over whether full employment had been reached and whether the capacity of the economy was fully utilized. It was said that the debt financing that pushed up interest rates also left less room for businesses to borrow.

To call economists overconfident during the modern laissez-faire experiment understates their hubris. The susceptibility of economists to new fashions in thinking, their opportunistic catering to powerful interests, and their walking in lockstep with the rightward political drift of America are disturbing for a discipline that claims to be a science.

Larry Kudlow- renowned economist (and deranged drug addict)

The kind of advice Corbyn-- and presumably President Bernie-- will get from Stiglitz is entirely different and from an entirely different, people-oriented perspective. Friday Stieglitz and Adam Hersh, senior economist at the Roosevelt Institute, published a decidedly non-establishment piece on the TPP-- which is nearly negotiated now-- and "free trade" in general. Details are being ironed out in Atlanta. "The biggest regional trade and investment agreement in history," they wrote, "is not what it seems."

You will hear much about the importance of the TPP for “free trade.” The reality is that this is an agreement to manage its members’ trade and investment relations-- and to do so on behalf of each country’s most powerful business lobbies. Make no mistake: It is evident from the main outstanding issues, over which negotiators are still haggling, that the TPP is not about “free” trade.

New Zealand has threatened to walk away from the agreement over the way Canada and the US manage trade in dairy products. Australia is not happy with how the US and Mexico manage trade in sugar. And the US is not happy with how Japan manages trade in rice. These industries are backed by significant voting blocs in their respective countries. And they represent just the tip of the iceberg in terms of how the TPP would advance an agenda that actually runs counter to free trade.

For starters, consider what the agreement would do to expand intellectual property rights for big pharmaceutical companies, as we learned from leaked versions of the negotiating text. Economic research clearly shows the argument that such intellectual property rights promote research to be weak at best. In fact, there is evidence to the contrary: When the Supreme Court invalidated Myriad’s patent on the BRCA gene, it led to a burst of innovation that resulted in better tests at lower costs. Indeed, provisions in the TPP would restrain open competition and raise prices for consumers in the US and around the world – anathema to free trade.

The TPP would manage trade in pharmaceuticals through a variety of seemingly arcane rule changes on issues such as “patent linkage,” “data exclusivity,” and “biologics.” The upshot is that pharmaceutical companies would effectively be allowed to extend-- sometimes almost indefinitely-- their monopolies on patented medicines, keep cheaper generics off the market, and block “biosimilar” competitors from introducing new medicines for years. That is how the TPP will manage trade for the pharmaceutical industry if the US gets its way.

Similarly, consider how the US hopes to use the TPP to manage trade for the tobacco industry. For decades, US-based tobacco companies have used foreign investor adjudication mechanisms created by agreements like the TPP to fight regulations intended to curb the public-health scourge of smoking. Under these investor-state dispute settlement (ISDS) systems, foreign investors gain new rights to sue national governments in binding private arbitration for regulations they see as diminishing the expected profitability of their investments.

International corporate interests tout ISDS as necessary to protect property rights where the rule of law and credible courts are lacking. But that argument is nonsense. The US is seeking the same mechanism in a similar mega-deal with the European Union, the Transatlantic Trade and Investment Partnership, even though there is little question about the quality of Europe’s legal and judicial systems.

To be sure, investors-- wherever they call home-- deserve protection from expropriation or discriminatory regulations. But ISDS goes much further: The obligation to compensate investors for losses of expected profits can and has been applied even where rules are nondiscriminatory and profits are made from causing public harm.

Philip Morris International is currently prosecuting such cases against Australia and Uruguay (not a TPP partner) for requiring cigarettes to carry warning labels. Canada, under threat of a similar suit, backed down from introducing a similarly effective warning label a few years back.

Given the veil of secrecy surrounding the TPP negotiations, it is not clear whether tobacco will be excluded from some aspects of ISDS. Either way, the broader issue remains: Such provisions make it hard for governments to conduct their basic functions-- protecting their citizens’ health and safety, ensuring economic stability, and safeguarding the environment.

Imagine what would have happened if these provisions had been in place when the lethal effects of asbestos were discovered. Rather than shutting down manufacturers and forcing them to compensate those who had been harmed, under ISDS, governments would have had to pay the manufacturers not to kill their citizens. Taxpayers would have been hit twice-- first to pay for the health damage caused by asbestos, and then to compensate manufacturers for their lost profits when the government stepped in to regulate a dangerous product.

It should surprise no one that America’s international agreements produce managed rather than free trade. That is what happens when the policymaking process is closed to non-business stakeholders-- not to mention the people’s elected representatives in Congress.

But how could we do a post about economists and leave Paul Krugman out-- or Republican voodoo economics? On Friday, Krugman looked at the Trump-Jeb-Rubio tax plans in terms of Republican voodoo orthodoxy. They all passed with flying colors: "lavish huge cuts on the wealthy while blowing up the deficit."

[T]here’s the recent state-level evidence. Kansas slashed taxes, in what its right-wing governor described as a 'real live experiment' in economic policy; the state’s growth has lagged ever since. California moved in the opposite direction, raising taxes; it has recently led the nation in job growth.
True, you can find self-proclaimed economic experts claiming to find overall evidence that low tax rates spur economic growth, but such experts invariably turn out to be on the payroll of right-wing pressure groups (and have an interesting habit of getting their numbers wrong). Independent studies of the correlation between tax rates and economic growth, for example by the Congressional Research Service, consistently find no relationship at all. There is no serious economic case for the tax-cut obsession.

Except one:

Republicans support big tax cuts for the wealthy because that’s what wealthy donors want. No doubt most of those donors have managed to convince themselves that what’s good for them is good for America. But at root it’s about rich people supporting politicians who will make them richer. Everything else is just rationalization.

... [N]ever forget that what it’s really about is top-down class warfare. That may sound simplistic, but it’s the way the world works.

How Will History Judge Tim Geithner?

In her new book, A Fighting Chance, Elizabeth Warren tries really hard to find nice things to say about Tim Geithner. But reading between the lines, it's very clear that she had, at best, mixed feelings about his role as Wall Street's man inside the Obama Administration. Geithner's own book, Stress Test, hasn't been as well received as Warren's. Matt Stoller:

Stress Test is an important book, because Tim Geithner is an important man. Economist Thomas Piketty may be explaining essential social dynamics of inequality, and Elizabeth Warren may be describing the need for Americans to get a break from the banks, but it is Tim Geithner who, for better or worse, actually shaped our institutional, legal, political, and economic dynamics at the moment when the system was most malleable.

That said, Geithner is not a popular man, and he knows it. “I never found an effective way to explain to the public what we were doing and why,” he writes. “We did save the economy, but we lost the country doing it.” He knows he’s never going to win the argument, he knows he can’t possibly convince people he did the right thing. Even his book tour is being described as an undertaking that "could have been worse." But he’s going to try to convince you anyway.

Stress Test is a fun, if long, book. It’s enjoyable, it’s charming, and it’s well written (or least well written by ghostwriter Mike Grunwald). It’s replete with simple and colorful anecdotes that explain the complexities of capital markets, without condescension and with a minimal amount of jargon. There are two parts to the book. The first is a set of arguments, told through his experiences during the crisis, about why bank bailouts are essential-- the financial world according to Geithner. And the second is an autobiographical account of Geithner’s life.

…Ultimately, Geithner was a hit man for American democracy-- and the middle class that sustained it. Geithner has acknowledged substantial fraud in the crisis, but he won’t even deign to answer why the administration did nothing about the individuals who perpetrated it. He doesn’t discuss distributional questions from the bailout. He sneers at the notion of justice. He argues for "anti-democratic" measures in a financial crisis, including emergency powers for the president similar to those the president has for national security. He won’t really explain why he refused to fight for writing down mortgage debt, or even what his role was in doing so. Geithner even takes time to knock Franklin Delano Roosevelt’s handling of the Great Depression. In other words, Geithner never grapples with any of the political or moral consequences of what he did. It’s just TARP-made money, baby! Or, as I’ve laid out, buckets of lies, misstatements, and omissions.

Geithner is at heart a grifter, a petty con artist with the right manners and breeding to lie at the top echelons of American finance at a moment when the government and financial services industry needed someone to be the face of their multi-trillion dollar three card monte. He’s going to make his money, now that he’s done living his life of fantastic power after his upbringing of remarkable mysterious privilege. After reading this book and documenting lie after lie after lie, I’m convinced that there’s more here than just a self-serving corrupt official. There’s an entire culture, of figures at Treasury, the Federal Reserve, in the entire Democratic Party elite structure, and in the world of journalism, a culture in which Geithner is seen as some sort of role model.

Americans may not get the reckoning, investigations, and jail time for wrongdoers, including Geithner himself, which they want, at least not now. But they don’t have to buy Geithner’s version of events. Far less important than what kind of regulation is in place is the ethical and cultural question of whether people like Tim Geithner can continue to lie, cheat, and steal at the highest reaches of government. Hopefully, Americans have learned enough from the financial crisis so that the answer will be no.

The task of reclaiming democratic power will involve making work at Geithner’s Treasury a black mark on a resume, an embarrassment and a shameful episode. That has already started. Larry Summers was prevented from becoming the Chairman of the Federal Reserve by progressives on the Senate Banking Committee, including Elizabeth Warren, Jeff Merkley, and Sherrod Brown. This week, the same coalition blocked the appointment of Michael Barr, the architect of Treasury’s housing policies, to an open slot at the Federal Reserve board. The pushback is happening because the Geithner era is increasingly seen as a time of betrayal and lies, not just disagreements over ideas. These people are seen as bad faith cancerous operators who need to be removed from positions of power and influence. Traditionally, Democrats think that the GOP is the party of meanness, of the wealthy, and then wonder why citizens choose to vote for them. But Americans are not stupid, and they saw what Geithner, as the head economic official in a Democratic administration, did.

As a result, the liberal faction in the Democratic Party is beginning to grapple with what it means to have grifters setting the course for economic strategy. There is now a debate about whether and how to purge this toxic culture. Geithner probably wishes there weren’t, which is one reason he wrote the book. He actually has to try and justify the horror show he put on. Believe it or not, that’s progress. Next time there’s a crisis, if reformers learn anything from this book, it’s to make sure that there are no Geithner types anywhere near the levers of power.

The longterm results of Geithner's perfidy will play out to the detriment of the country. In the shorter term it;s playing out to the detriment of working families in particular. This week, economist David Cay Johnson put the lie to the headlines that the economy has been improving, when in fact, it has basically just stabilized from the Bush catastrophe. In his piece, Americans Fared Better After The Great Depression Than Today, Johnson asserts that 6 years after the Great Recession, a majority of Americans' financial situations are still stagnant. The data shows that "the vast majority of Americans, the 90 percent, enjoyed bigger income gains in the 1930s than in recent years."

In 2012, for the first time since data became available in 1917, the 90 percent enjoyed less than half of all reported income, an analysis of IRS data by economists Thomas Piketty and Emmanuel Saez shows.

From 1934 to 1980 the vast majority averaged more than 64 percent of all reported income. Since then, their slice of income pie has gotten steadily thinner. In 2012 they slipped to just under 50 percent.

At the same time, the top one-tenth of 1 percent enjoyed on average 4.5 percent of the national income pie from 1934 to 1980. Since then, their slice has more than doubled. In 2012 they got 11.5 percent of the pie.

Most telling: 95 percent of reported income gains between 2009 and 2012 went to the top 1 percent and a third of the gains went to the top 1 percent of the top 1 percent-- a mere 16,000 households.

To sum up, there are some tiny improvements in the job and income numbers, but only if you limit the analysis to the last few years. Look back a decade or four decades or even eight decades, and the story changes from an America of growing prosperity to one of falling incomes, not enough jobs and ever fatter slices of the income pie for the elite. 

As Stoller pointed out in his epic review of Geithner's book, "The financiers recovered; everyone else did not. And the economy, even today, sputters along at just above stall speed because of this… [Geithner] wasn’t trying to save taxpayer money; he was trying to appear like he was trying to save taxpayer money while funneling money to banks… [He] was hired to lie, steal, and cheat on behalf of bankers, and he did so." Right… Democrats are better than Republicans. I never saw such low turnout for elections as the ones last Tuesday. It won't improve in November and the coming epic collapse of the Democratic Party in Congress will give brain-dead Beltway pundits something to babble about for weeks.

If you worried that ex-Treasury Sec'y Tim Geithner would wind up on food stamps (or no food stamps), you can rest easy

Daily Kos caption: "Ka-CHING!!!"

TIMOTHY F. GEITHNER TO JOIN WARBURG PINCUS
AS PRESIDENT AND MANAGING DIRECTOR

New York, November 16, 2013 –- Warburg Pincus, a leading global private equity firm focused on growth investing, today announced the appointment of Timothy F. Geithner as President and Managing Director. Mr. Geithner also will be a member of the firm’s Executive Management Group.

In his role, Mr. Geithner will work closely with Warburg Pincus’ Co-Chief Executive Officers, Charles R. Kaye and Joseph P. Landy, on overall firm strategy and management, investing and portfolio management, organizational and funding structure, and investor relations.

by Ken

in my recent post "Ooh, that Obama," I showcased some of Ian Welsh's November 14 musings on "The Obamacare Fiasco," musings that are highly relevant to tonight's subject. "The problem with Obama," Ian wrote,

has always been this sickening need to be one of the boys. He appears to genuinely like and genuinely admire the people who have "made it" in this society -- people like Jamie Dimon and the people who run insurance and drug companies. He thinks you can make deals with these people, and make sure everyone wins. You can't. These people are the most successful parasites ever produced by our nasty form of sociopathic capitalism. You can only give them what they want or you can rip them from the body politic, so they stop sucking the blood from the host they're killing.

An important observation was subsequently tucked into parentheses: "Rest assured, Obama, like Clinton, will make tens of millions miraculously quickly on leaving office." Isn't this, after all, what keeps the whole system going? We like to pretend that our public servants are working for, you know, us, when in fact they're working for "the people who have 'made it' in this society," and are consequently rewarded -- or threatened with nonreward or even punishment -- according to their performance for their real bosses.

Which brings us to former Treasury Secretary Tim Geithner, aka "The Tiniest Tim of Them All." Off his performance through the Great Economic Meltdown and its aftermath, well-wishers could be forgiven wondering whether he would ever work again.

But that's looking only at Timmy's performance on behalf of Us the People. And here I have to disagree with Daily Kos's brooklynbadboy, in "Geithner cashes in . . . ahhhhhh," whose take is:

Must be nice.

Tim Geithner, of course, has no experience as a banker, an investor, a trader, a venture capitalist, a speculator, or businessman of any sort. So naturally he will be boss of those that actually do. No no. He has been, all his life, that special breed of person known as the Ivy League Economist. He's worked at think tanks, in government, and for the Federal Reserve. He comes from a Mayflower family. His education has been mostly the study of Asia.

It is from these credentials that he now, following his mentor Larry Summers, proceeds in heading up the private equity branch of one of the world's most storied banking families. He is certain, like Summers, to become very, very rich doing...something that almost certainly is not work. Instead, he will most likely make a bundle on carried interest, which is how private equity executives avoid paying taxes like the rest of us.

The American elite establishment ladies and gentleman, for your viewing pleasure. From being asleep at the wheel as a banking regulator during the worst financial crash since the Depression, to wealthy millionaire banker.

Failing Up. It's the new American way.

The image of our Timmy as "asleep at the wheel" seems to me correct only if you're measuring him by that standard I was just talking about: serving the American public. All the accounts I've heard, however, indicate that far from being a financial-sector Heckuva Job Brownie, Timmy was a veritable whirling dervish of activity regarding the bailout and the myriad regulatory issues that descended upon us in the meltdown's wake. It's just that he was working tirelessly to ensure that the sorting out of winners and losers was done correctly, meaning that the kind of people he regarded as born to rule wound up being rewarded and made whole, or as whole as circumstances permitted, and the check for it was picked up by, well, somebody else.

Similarly, it seems to me that BBB is way too hard on our Timmy credential-wise. In all career -- including those five-plus years as president of the New York Fed (to describe this as "working for the Federal Reserve" seems to me wildly misleading) and four years as Treasury secretary -- he has been involved, and often intimately involved in many of those areas of finance that come into play in his new job. Perhaps more importantly, he knows at least as anyone walking where the mythical line between the "allowable" and "unallowable" regarding government interference in free enterprise may be found. Are there many people who wouldn't return his phone calls?

That said, I assume he will have the sense to allow the people who will be working "for" him to ply their expertise, and there will be other people around the premises to fill in the gaps in his specific knowledge. Although it appears to have fallen to Warburg Pincus to provide Timmy with his first jolt of payback for years of faithful service, I don't think they'll begrudge the little feller as much as a dollar of his compensation. They have every reason to hope that his presence will amply repay their modest investment.

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They aren't called cabinet "secretaries" on account of their beautiful penmanship

You might think these are random doodles, but in fact they're the signatures of two U.S. cabinet secretaries -- can you guess which? (If you're having trouble, here's a hint: They're the newest.)

by Ken

Washington Post Loopmaster Al Kamen wants to know, "Is bad penmanship a prerequisite for President Obama's second-term Cabinet?" And the documentary evidence is reproduced above. To make matters more, er, picturesque, one of the above signatures is presumably going to be appearing on all our printed currency.

1. DEFENSE SECRETARY. . . um . . . er . . . CIA is OK?

Says Al:

Newly minted Defense Secretary Chuck Hagel signed off on a letter to a former Senate colleague this week with a scrawly, nearly illegible version of his signature. We're pretty sure it's his signature, at least, but we arrived at that only by deduction, based on its placement. . . .

Here's a letter Hagel wrote to Sen. Barbara Boxer (he apparently wrote an identical one to Sen. Jeanne Shaheen in response to a letter the two sent him, but only Boxer posted hers on her Web site).

Hagel added two friendly flourishes to the typewritten missive. In a slash of blue ink, he crossed out the formal address "Dear Senator Boxer" and replaced that with "Barbara." That part we could read.

But his sign-off was nearly impossible to decipher. A strangely formed "C" starts the affair, which breaks down into a strange mountain range in the middle and ends with a spastic-looking shape that one could only vaguely recognize as a "k." Could be, he was matching the informal tone of the opening by signing the note "Chuck."

Or not. Others who've looked at it thought it was his full signature. Other guesses included "eskimo," and one conspiracy-minded viewer read "CIA is OK." What say you, Loop fans? [Personally, I'm getting, um, "Cynde" -- though I admit that what I'm reading as an "n" could be, well, something else. -- Ed.]

2. TREASURY SECRETARY . . . uh, not a clue . . . LOOP-DE-LOOP?

"It appears" suggests Al, that Secretary eskimo "is giving Treasury Secretary Jack Lew a run for his money." But the SecDef, Al points out, "doesn't have to sign all the dollar bills the way Lew does." Which brings us back to a previous "In the Loop" report, in January, when OMB Director Lew was merely a leading candidate to replace outgoing Treasury Secretary Timothy Geithner, and Loop deputy Emily Heil reported that "the hard-charging Lew probably has a softer side," according to a handwriting analyst to whom she showed this sample.

The roundness of the characters in Lew's impossible-to-read John Hancock indicates that he just might be the cuddly sort, says Kathi McKnight, a professional graphologist, meaning someone who gleans people's personality traits from their writing. Such strokes are common among those who prefer a "softer" approach to problem-solving, she says.

The signers of the Constitution, by contrast, used very strong, angular lettering, McKnight notes -- not that leaders throughout history haven't used circular strokes like Lew's. Like who? "Well, Princess Di had very loopy writing," she says.

And the fact that Lew's signature is illegible may mean that he wants to keep his true identity unknown. "People with illegible signatures . . . like to keep some things private," she says.

Perhaps Lew will want to spruce up his signature before it makes its prime-time debut, as his predecessor did. Current Treasury Secretary Timothy Geithner told NPR last year that he had to work on his penmanship to make his name legible enough to befit its place on U.S. currency.

AS FOR FORMER TREASURY SECRETARY GEITHNER . . .

Emily reported in April 2012 that "there's more to [his engraved] signature than you might think -- or at least, more thought went into it than typically goes into a name jotted on a piece of paper.

In an interview yesterday with Oregon Public Broadcasting, Geithner said he had to alter his typically un-readable scrawl to make it worthy of the nation’s currency.

He admitted that he has "a completely illegible scrawl that did not seem suitable for the dollar bill. So I had to change it so people could see my name."

Emily noted further that despite searching far and wide, the Loop team had been unable to unearth any specimens of the secretary's self-professed illegible scrawl. "The examples of his handwriting we found were on official correspondence -- letters to Congress and the like -- on which Geithner apparently either used an auto-pen or was as careful as he was on the dollar."

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The Best Thing About Jack Lew's Nomination: He's Not Erskine Bowles

Lew & Geithner-- you'll never know the difference

It's not a shock that Obama picked his chief of staff, Jacob "Jack" Lew as his Treasury Secretary to replace Tim Geithner. It's unlikely anyone will ever know Geithner's gone and Lew took his place-- except on Saturdays when the Orthodox Lew doesn't work. (I wonder if Obama is looking into a Shabbos Goy if anything important comes up on a Saturday... Colin Powell, Mario Cuomo, Martin Scorsese and Elvis Presley have all played that role; no, really.)

The White House spin machine has put it out there that Lew is "a liberal" who was down with Eugene McCarthy and Paul Wellstone, which scares me since there's a good chance that if they're saying that, he's probably really a horrible conservative. What we do know about him is that when he was chief operating officer of Citi's Alternative Investment department, he invested in a hedge fund that was betting on the collapse of the housing market.

Under Lew, the Multi-Adviser fund doubled its investment in Paulson's fund to nearly $42 million by March 2008; by the next quarter, it'd cranked that investment up to just over $60 million, making it the biggest piece of the Multi-Adviser fund, Nasiripour reported. So how'd it go for Lew and Citi?:

Citi paid Lew $1.1 million for his year at Alternative Investments, according to an ethics disclosure report filed in January 2009. He was also eligible for an undisclosed bonus... His unit, though, lost as much as billions of dollars in 2008 as its bets turned sour. In the first quarter of 2008 alone the unit lost $509 million; the company stopped publicly disclosing the unit's individual numbers soon thereafter, but the part of the company that absorbed Alternative Investments lost $20.1 billion in 2008, according to the bank's filings with the Securities and Exchange Commission.

Citigroup, as you might recall, also received $45 billion in TARP money.

The White Houset says he's a "budget wiz" (like Paul Ryan?) and worked as director of the OMB for both Clinton and Obama. (Before taking the OMB job, Lew worked for Hillary at the State Dept. as deputy secretary for management and resources, providing the perfect excuse for Lindsey Graham or some other deranged right-wing obstructionist in the Senate to put a hold on the nomination until they get answers to their silly Benghazi smears. But probably not. He'll likely be confirmed-- once again-- by the Senate and make Wall Street very happy that they have one of their own-- once again-- as Treasury Secretary.

He's famous for his awful signature. Below is what it might look like on a dollar bill. I wonder if he could also sign the trillion dollar coin. As you may recall, I would have preferred Brad Miller or Paul Krugman get the job, but both are progressive and Obama... isn't. And he only accepts pressure from the far right, not from the moderate left. Don't talk to Obama (or Lew) about breaking up the big criminal bankster operations.

The biggest Wall Street banks are now far bigger than they were four years ago when they were considered too big to fail. The five largest have almost 44 percent of all US bank deposits.

That’s up from 37 percent in 2007, just before the crash. A decade ago they had just 28 percent.

The biggest banks keep getting bigger because they can borrow more cheaply than smaller banks. That’s because investors believe the government will bail them out if they get into trouble, rather than force them into a form of bankruptcy (as the new Dodd-Frank law makes possible).

That’s why it’s necessary to limit their size and break up the biggest.

Washington may be getting the message. A few months ago Dan Tarullo, the Fed governor who specializes in bank regulation, proposed capping the size of the banks’ balance sheets.

Some former titans of Wall Street are saying much the same thing. Even Sandy Weill, who created Citigroup (which required $445 billion in TARP loans and asset guarantees) is proposing the biggest banks be broken up.

The new Congress may also be supportive. The new chairman of the House Financial Services Committee, Texas Republican Jeb Hensarling, has been a strong ally of small banks in their push to rein in their bigger rivals, and has expressed concern about the largest being too big to fail.

It’s not irrelevant that the Dallas branch of the Federal Reserve Board, in Hensarling’s home district, has also proposed breaking up the biggest.

Meanwhile, over in the Senate, Ohio Senator Sherrod Brown, is a strong advocate for breaking up the big banks and is now on the Senate Finance Committee. And Elizabeth Warren, scourge of Wall Street, will sit on the Senate Banking Committee.

In other words, the timing is right. The oven is ready. All we need is another multi-billion dollar banking loss-- like JP Morgan Chase’s last year-- and the biggest banks are cooked.

Let's see if anyone asks Mr. Lew about it.

UPDATE: BERNIE SANDERS-- A NO VOTE ON LEW!

Senator Sanders:

“Jack Lew is clearly an extremely intelligent person and I applaud his many years of public service to our country. I believe that he will be confirmed by the Senate. Unfortunately, he will be confirmed without my vote. At a time when the middle class is collapsing and millions of workers are unemployed, I do not believe he is the right person at the right time to serve in this important position.

“As a supporter of the president, I remain extremely concerned that virtually all of his key economic advisers have come from Wall Street. In my view, we need a treasury secretary who is prepared to stand up to corporate America and their powerful lobbyists and fight for policies that protect the working families in our country. I do not believe Mr. Lew is that person.

“We don't need a treasury secretary who thinks that Wall Street deregulation was not responsible for the financial crisis. We need a treasury secretary who will work hard to break up too-big-to-fail financial institutions so that Wall Street cannot cause another massive financial crisis.

“We don’t need another treasury secretary who believes in ‘deficit neutral’ corporate tax reform. We need a treasury secretary willing to fight to make sure that large, profitable corporations pay their fair share in taxes to reduce the deficit and create jobs.

“We don't need a treasury secretary who will advise the president that he should negotiate with the Republicans to cut Social Security, Medicare, and Medicaid benefits. We need someone who is going to strengthen these programs.

“We don’t need another treasury secretary who believes that NAFTA and Permanent Normal Trade Relations with China have been good for the American economy. We need someone in the White House who works to fundamentally re-write our trade policy to make sure that we are exporting American goods, not American jobs."

We Must Not Balance The Budget On The Backs Of The Poor-- Some Cuts Never Heal

I was worried Friday to read that Wall Street shill Tiny Tim Geithner had bragged that a deal to avert the so-called "fiscal cliff" (a term meant to terrorize Americans) is "within our grasp" and that Boehner had also asserted, when leaving a meeting at the White House, "I feel confident that a solution may be in sight.” But when Jim Dean called the term "Fiscal Cliff" a "Republican scare tactic," he only got it half right. It's a scare tactic of the political elites who embrace the corporate ideology and who distrust democracy-- and, alas, that doesn't just include Republicans. He wrote DFA members that "Republicans are ginning up the 'fiscal cliff' to scare Americans and force Democrats to extend the Bush tax cuts, while demanding cuts to vital programs like Medicare." I'm not so certain Obama and many of the Democrats around him need much any forcing.

In the video above you see lots of Bernie Sanders (I-VT)-- as well as other solid progressives, like Sheldon Whitehouse (D-RI), Tom Harkin (D-IA) and Keith Ellison (D-MN). Jan Schakowsky (D-IL) pledged, "Over my dead body will they cut benefits to Social Security and Medicare." I'm sure she knew that she wasn't just referring to Boehner and Miss McConnell and that Mitt Romney is not President.

Harkin explained that the way to boost revenue for Social Security would be to get rid of the caps-- allow income for people who make more than $108,000 to be subject to the payroll tax, just like everyone else. He went further, explaining how doing so would allow beneficiaries to receive an additional $65 a month through 2050. "If you wanna fix Social Security, there it is. Make those making millions of dollars a year pay the same thing and the same rate as those making 40 or 50 or 60 thousand dollars a year," Harkin said. "This is not magic. It can be done."

Jim Dean's point, by the way was well-taken: no deal is better than a bad deal. And his reasoning is very solid:

• The Bush tax cuts will expire anyway. That's right, the Bush tax cuts-- which are the single largest contributor to the deficit-- will end on December 31, even if Congress does nothing between now and then. That means taxes on the top 2% will go up and Republicans won't have any leverage to lower them again in the New Year.

  • Cutting Social Security and Medicare won't fix the deficit. Social Security is paid for by the payroll tax, which goes into the Social Security Trust Fund. Cutting Social Security won't add money to the general fund. Meanwhile, the non-partisan Congressional Budget Office has said the Medicare cuts that Republicans are pushing would do little to affect long-term spending.

Thankfully, Nancy Pelosi, at least so far, is not among the Democrats willing to sell out working families, the way corporate shills like Chris Van Hollen and Kent Conrad have said they're eager to do.

Those issues-- Social Security, Medicare, Medicaid-- they should be in their own realm. Whatever adjustments would be made in Social Security should be there to strengthen Social Security, not to subsidize a tax cut for the wealthiest people in America and say that’s how we balance the budget. The same thing with Medicaid and Medicare… Sen. Reid and others have spoken out, we’re not going to touch any of the entitlements, so I think that gives you some indication of the likelihood of something like that happening… Unless somebody wants to define-- you are asking me if I would support what they’re saying. I don’t know what they’re saying by “structural.” Is that a euphemism for “I’m going to cut your benefit if you’re a middle-aged senior”? Is that what structural change means? No, I don’t support that.

We already covered the way Alan Grayson and other dedicated progressives are approaching the Obama-Boehner Fiscal Cliff bullshit. "Naomi Klein wrote a whole book about this, called The Shock Doctrine. This is an artificial shock. It's being induced in order to be able to justify policies you could not possibly justify on their merits, and I think that people are getting very frustrated about this. The polls clearly show that over three quarters of the population doesn't want any cuts in benefits in Social Security, or any cuts in benefits for Medicare, in order to be able to reduce the deficit. What they want, a majority, want cuts in the defense budget, and they want an end to the war in Afghanistan to reduce the deficit. And instead what we are seeing is this artificial creation [of a crisis], right after we saw a real crisis. We saw a real crisis in Hurricane Sandy, and that's what a real crisis looks like. An artificial crisis is being instituted to steal from us, to steal from the Middle Class, and to steal from people in need." These are the bills that have been introduced in the House so far:

This will be easier to read if you click on it

Of course Elizabeth Warren needs to be on the Senate Banking Committee

Majority Leader Harry (left) knows that Senator-elect Warren (right) belongs on the Banking Committee. That's why he'll slot her in -- or maybe why he won't.

by Ken

On Tuesday Howie wrote a post called "Wall Street Kind of Lost -- But Not Really, Of Course." As he indicated, there's no reason to believe that, however the bodies may change, the soul of the economic team surrounding the president in his second term is going to be solidly in the bag for Wall Street and the banksters.

One early test of the seriousness of the Democratic alternative to the rule of the Oligarchy of the 1 Percent -- or perhaps the existence of a Democratic alternative to the rule of the Oligarchy of the 1 Percent -- is the decision by the Senate majority in the 113th Congress as to whether freshman Sen. Elizabeth Warren gets a seat on the Banking Committee.

From a personal standpoint, let me say that when I belatedly started taking in then-known election results on Election Night, by thich time the networks had all called the presidential election for President Obama, and I was indeed relieved to know that Willard Inc. was not about to remake the Oval Office as the White House HQ of the first incorporated president, the names I was happiest to hear announced as declared winners were Warren and Wisconsin's Tammy Baldwin. Let's throw in news of the reelection of OH Sen. Sherrod Brown.

Because it was quite easy enough to imagine an Obama reelection victory alongside Senate victories by MA Sen. Scott Brown and WI former Gov. Tommy Thomjpson -- and also whoever that creep was being so heavily bankrolled by the Right to oust OH's Senator Brown. In Senator-elect Warren's case, the result was made especially sweet by the very nature and intensity of her hardest-core opponents, the cabal of Bankster & Bankster Inc., which cratered the economy once and then quickly segued back to its traditional role of sucking all the life it can out of the economy.

Now Senator Warren needs a seat on the Banking Committee -- and Majority Leader Harry Reid, who's going to make the call, doesn't need me to tell him that this is precisely why Massachusetts voters, backed up by well-wishers across the country, have sent her back to DC as a U.S. senator. She should, of course, be running the federal Consumer Financial Protection Bureau (CFPB), since the thing was her idea, and no one understands better: (a) why it was needed, (b) what it has to do, and above all (c) what it has to overcome to do it.

But the Obama administration didn't have the nerve to fight the certain powerful opposition of Senate Republicans to a Warren nomination. For that matter, the Obama administration almost certainly didn't have the will to offer such a nomination. Not over the objections of Treasury Sec'y "Tiny Tim" Geithner, who knows only too well how well she knows how corporate-cravely he administered the TARP bailout. (It was in particular the selection of Tiny Tim's successor that Howie was focused on in his Tuesday post.) A number of Senate Dems weren't enthusiastic either -- not least outgoing Banking Committee Chairman Chris Dodd, who emerged ever more embarrassingly, as he slithered his way out of the Senate, as a signed-and-sealed stooge of Bankster & Bankster.

Anyway, Senator Harry knows as well as anyone that Senator Warren belongs on the Banking Committee. And he could slot her into one of the vacancies created by the retirements of Sens. Daniel Akaka (HI) and Herb Kohl (WI). Or, knowing how badly Bankster & Bankster wants her not on the committee, he could keep her off Banking.

Business Insider's Linette Lopez reports today that "right now it looks like if she wants it, she can have it" ("Here's What's Happening In The Big Battle To Keep Elizabeth Warren Off The Senate Banking Committee"; lots o' links onsite).

Ultimately, the decision of who sits on what committee is left up to Harry Reid (D-NV), the Senate Majority leader. He takes into consideration things like seniority and Senators' talents, backgrounds and preferences. But in the end, the choice is his.

Now let's look at the committee. There are two seats opening up: Herb Kohl (D-WI) and Daniel Akaka (D-HI). New York Senator Kirsten Gillibrand has already said she's not taking one of them.

The other person being considered is Delaware Senator Chris Coons, and he isn't really talking about the situation.

So there's space. There's also pressure ... on Reid.

Rhode Island Senator and Banking Committee member Jack Reed is said to be supporting Warren for the seat.

And there's also this comment Banking Committee Chairman Tim Johnson made on Tuesday:

“I have a good working relationship with Elizabeth Warren and I would welcome her to the Committee if that’s what she wishes. Her expertise and knowledge would be an asset to the Committee as we continue working to protect consumers and maintain financial stability.”

Politicians aside, the Democratic constituency seems into giving Warren a seat on Banking as well. News site Daily Kos has a petition going to get Reid to put her on the committee. It has 80,872 signatures on it so far.

Politico's Ben White reported that Wall Street's lobbyists are on the case, trying to pressure Reid to put Warren on another committee (like Judiciary or Finance).

The question is, how much influence do they have over a man who, two years ago, made fun of the GOP for "making love to Wall Street"? (from CBS):

"They won't let us move on any amendments," he said, adding that "It's obvious that they do not want to put in decent restrictions" on the financial industry.

Reid suggested the GOP is stalling because "they are having difficulty determining how they're going to continue making love to Wall Street" by opposing regulation.

Ultimately, if Warren wants the seat, it looks like Reid is absolutely in the position to give it to her.

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