If you wonder why we would pour $9.7 trillion dollars at the banking system and virtually nothing at the people of America, then look no further. I saw an interesting statistic that said $9.7 trillion is enough to literally buy 90% of all the mortgages in America. Would that have been a better use of the funds? You bet. Not what I would have done, but at least you would be helping the PEOPLE of this country and you would underpin the banks and derivates as well allowing the game to continue. As it stands today, the game is at risk, and Larry Summers is one of the reasons why.
Summers Earned Millions in D.E. Shaw Salary, Bank Speech Fees
By Timothy J. Burger and Kristin Jensen
April 4 (Bloomberg) -- Lawrence Summers, director of President Barack Obama’s National Economic Council, earned millions working at a hedge fund and speaking to banks such as Citigroup Inc. that later received taxpayer bailout money.
Hedge fund D.E. Shaw & Co. paid Summers more than $5 million in salary and other compensation in the past 16 months, according to a financial disclosure form released by the White House yesterday. Summers served as a managing director at the New York-based firm. Summers, a former Treasury secretary, also earned more than $2.7 million in speaking fees.
“There was considerable interest in hearing his economic insights,” said Ben LaBolt, a White House spokesman. At the White House, Summers “has been at the forefront of this administration’s work to shore up our nation’s financial system and to put in place a regulatory framework that will strengthen the financial system,” LaBolt said.
The disclosure statement for Summers and several other top administration officials illustrates the quandary Obama and his predecessors have faced in their personnel decisions because “powerful people are almost always also rich people” who have earned money from private interests, said Steffen Schmidt, a political science professor at Iowa State University in Ames, Iowa.
Obama’s “choice going forward is to choose unknowns of modest means who may be less controversial in terms of their connections,” Schmidt said. “Except those people would be far less knowledgeable and thus less of an asset to fix these very same urgent problems.”
Speeches by Summers
Summers spoke to Citigroup, Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. audiences twice last year, according to his disclosure statement. Lehman, which went bankrupt in September, paid Summers $67,500 for an engagement on July 30, the filing showed.
Summers contributed a $45,000 fee from Merrill Lynch & Co. for a Nov. 12 speech to charity, according to his form. When the economist learned that Merrill would be accepting taxpayer funds because of its merger with Bank of America Corp., he tried unsuccessfully to cancel the appearance and then decided to donate the money, a White House official said.
“In ordinary times, a U.S. economic expert receiving honoraria from U.S. banks wouldn’t raise many eyebrows -- nor would a money-making stint in the private sector,” said Rogan Kersh, a public-service professor at New York University. “These aren’t ordinary times, and as populist anger at the banking and hedge-fund industries continues to spread, Summers could have some serious explaining to do.”
Kersh said he didn’t see any obvious conflict of interest for Summers, who served as treasury secretary under former President Bill Clinton and a stint as president of Cambridge, Massachusetts-based Harvard University.
No conflict of interest? Are you kidding? Is there any wonder why ALL the bailout money, stimulus, and guarantees go to these institutions? Do Americans really believe the lie that we must bail the people who created the problems out in order to get credit (debt) flowing again? What nonsense. The exact opposite is required to move the economy forward. The bad actors need to be removed and their debt with them.
And to imply that people of “modest means” don’t know enough to fix the problem is exactly THE problem. The people who created the problems are NOT capable of fixing the problems. The only people who ARE CAPABLE of fixing the problems are those who are removed from the situation and can step in to do the moral and ethical things required.
My solution would be to separate the money from politics all together via an amendment that would separate Corporations from State and would return the central banking functions to the people. THAT would produce a long term cure for almost all our economic problems.
The article continues…
The White House also released the personal financial disclosure forms of other top White House officials yesterday.
White House Chief of Staff Rahm Emanuel’s form listed a holding of less than $1,000 in shares of American International Group Inc., the insurer that has taken $182.5 billion in taxpayer funds to avoid financial collapse. The White House said Emanuel doesn’t currently own shares in the company, which sparked a public furor by paying $165 million in bonuses to its employees as it was taking the taxpayer money.
Emanuel’s congressional disclosure form that covered 2007 said his wife bought between $1,000 and $15,000 worth of AIG stock in August that year.
He also reported holdings of between $1,000 and $15,000 in Limited Brands Inc., and less than $1,000 in Wal-Mart Stores Inc. Those are small holdings “that do not present a conflict of interest under ethics rules,” said Sarah Feinberg, a White House spokeswoman.
Valerie Jarrett, a senior adviser to Obama and a close friend from Chicago, sold shares she owned in CME Group Inc., Caterpillar Inc., Hewlett Packard Co., Intel Corp., Sony Corp., General Mills Inc., General Dynamics Corp., Costco Wholesale Corp. and Nike Inc. The income from those sales and dividend payments ranged from as little as $200 to as much as $100,000 each, according to the filing, which only lists ranges.
Jarrett also reported at one time owning between $15,000 and $50,000 worth of Apple Inc. shares and between $1,000 and $15,000 in stock of Best Buy Co., Brinker International Inc., Staples Inc. and Starbucks Corp. The White House said she no longer owns any shares.
Jarrett reported income of $393,286 for selling restricted stock options in Navigant Consulting Inc., a Chicago-based consulting firm. She earned a salary of $302,000 from Habitat Executive Services Inc. in Chicago and directors’ fees of more than $346,000 from groups and companies ranging from Navigant to USG Corp., a manufacturer of building materials.
David Axelrod, the chief strategist of Obama’s campaign who is now a senior adviser to the president, received $1.55 million in salary and partnership income from public affairs firms. He agreed to buyouts that will pay him $3 million over five years, his disclosure form showed.
Axelrod’s clients included the AFL-CIO, a federation of labor unions; the American Association for Justice, formerly known as the Association of Trial Lawyers of America; AT&T Inc.; and Bally Total Fitness Corp.
Carol Browner, the White House energy policy coordinator, was paid $450,000 for her work last year with Albright Group LLC, a consulting firm founded by former Secretary of State Madeleine Albright. Browner is still owed between $350,000 and $750,000 in Albright Group member distributions and has agreed to sell her ownership interest for about $370,000, to be paid over three years.
Browner also is selling her interest in Albright Capital Management LLC, a related investment advisory firm. Browner didn’t disclose the amount she will receive. She listed among her assets Albright Capital Management holdings worth between $450,000 and $1 million.
Browner also listed a stake in Downey McGrath Group Inc., a lobbying firm headed by her husband, Thomas Downey, a former Democratic congressman from New York. The stake, owned by her husband, was valued at between $1 million and $5 million.
White House Press Secretary Robert Gibbs earned $156,188 last year as Obama’s campaign press secretary. He and his wife own shares in four residential buildings in Alexandria, Virginia, which they rent out. He valued his ownership in the buildings at between $700,000 and $1.5 million.
White House Counsel Gregory Craig was paid $1.7 million by the law firm Williams & Connolly LLP, where he was a partner. His clients included companies such as Abbott Laboratories and Digital Fusion Inc. and former UN secretary general Kofi Annan.
Desiree Rogers, the White House social secretary, was paid $1.8 million for less than seven months’ work as president of Peoples Gas and North Shore Gas. In July, she left the utility company to work for Allstate as president of social networking, and was paid $350,000 through the end of the year.
She also was paid $150,000 for serving on the board of Equity Residential, a real estate firm and $20,000 for serving on the board of Blue Cross Blue Shield in Chicago. She owns between $250,000 and $500,000 worth of stock in Equity Residential.
Thomas Donilon, deputy White House national security adviser, was paid $3.9 million by O’Melveny & Myers LLP, his former law firm. Donilon represented such clients as Penny Pritzker, Obama’s campaign finance director; Verizon Communications Inc.; UnitedHealth Group; Citigroup; Goldman; and Apollo Management LLP. He will receive a pension from Fannie Mae, where he worked from 1999 to 2005.
“This is one of many stories where we see the intricate connections” between the government and those that it oversees, said Julian Zelizer, a history and public affairs professor at Princeton University in New Jersey. “There is a long history of this and it does not mean that serious regulation cannot take place. But without substantive lobbying and campaign finance reform, the nation will always face this challenge.”
Zelizer is correct in that reform is needed or we will always face this challenge. The interface of bankers and corporations with our political system is the ROOT cause of a government that is out of control and a banking system that is out of control.
If you want real fixes to the problems at hand, step one is to remove those who created the problem. Larry Summers is one of those people.