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The Democrats seem slightly befuddled how to react to the current fiscal crisis. One reason is that they helped to cause it. Starting with the Clinton administration, there was a conscious effort by Democrats to cozy up to Wall Street and to this day Barack Obama is being advised by those with deep involvement in the policies and practices that led to the current disaster. You can’t well complain about Bush’s Treasury Secretary having been with Goldman Sachs, when Clinton’s was as well and now the guy has Obama’s ear. And during the period liberals have largely looked the other way as the economic principles of the New Deal, Fair Deal and Great Society were steadily unraveled.
18 SEP 2008
The Prowler, American Spectator – When President George W. Bush nominated Henry Paulson to serve as Treasury Secretary, Republicans raised a red flag that Paulson, who, along with his wife, has strong ties to the Democrat party, would not be an honest broker with Republicans.
That seems to have been borne out, with sources inside of Treasury reporting that Paulson briefed Sen. Barack Obama and his campaign advisers on the Fannie Mae and Freddie Mac bailout plan before offering such a briefing to the McCain campaign.
In fact, the McCain campaign had sought a similar briefing several days ago as word spread that a bailout plan was to be unveiled and had been turned down by Paulson’s senior staff.
The next question is: Why was the Obama campaign so keen on getting advanced word about the bailout?
“They have a huge problem with the mortgage and housing market story, and everyone is missing it,” says a Republican political media consultant with ties to the Obama campaign due to the bipartisan nature of the firm he does work with.
“You look at Obama’s economic advisers, the guys he has counted on from day one and who have raised him a ton — and I mean a ton — of money: Franklin Raines and Jim Johnson, both of them are waist to neck deep in the mortgage debacle.”
Both Raines and Johnson have served as CEO of Fannie Mae, with Raines taking over from Johnson. Both are key political and economic advisers to Obama.
“How can Obama go out with a straight face and say it was Republicans who made this mess, when it is his key advisers who ran the agencies that made the big mess what it is?” says a Democrat House member who supported Sen. Hillary Rodham Clinton. “It’s his people who are responsible for what may well be the single largest government bailout in history. And every single one of them made millions off the collapse that are lining Obama’s campaign coffers. . .
It isn’t just Fannie Mae where Obama has a problem. Another close political adviser, in fact the one man responsible for rallying support for Obama early on among Congressional Democrats, is Rep. Rahm Emanuel, who served on the Board of Directors for Freddie Mac after leaving the Clinton White House. . .
Emanuel claimed to be neutral in the primary race between the wife of his old boss and his longtime Chicago acquaintance, Obama. But the chairman of the House Democratic Caucus, who would be first in line for the vacated Senate seat of Obama should he win the presidency, quickly dumped Clinton when it was clear Obama had a head of steam for the nomination. .
Both Raines and Johnson have served as CEO of Fannie Mae, with Raines taking over from Johnson. Both are key political and economic advisers to Obama.
Protein Wisdom – [In a] May 6th speech, [Obama] said that we “need a government that stands up for families who are being tricked out of their homes by Wall Street predators.” What Obama failed to mention was that by the end of March 2008, he had taken $1,180,103 from people and groups associated with the top ten issuers of subprime loans. . . Indeed, Swiss banking giant UBS, which has written off more debt from the subprime crisis than any other bank, has contributed $363,257 not included in that total. . .
Obama failed to mention that his fundraising bundlers include: Louis Susman, Michael Froman and J. Michael Schell of Citigroup; Steve Koch of Credit Suisse; Bruce Hayman, David Heller, Eric Schwartz, and Todd Williams of Goldman Sachs; Mark Gilbert, Christine Forester, John Rhea, Nadja Fidelia, and Theodore Janulis of Lehman; and Robert Wolf of UBS Americas. These folks raised an additional $1,800,000 for Obama. . .
One bundler who deserves special mention is Chicago billionaire Penny Pritzker, who happens to be Obama’s national Finance Chair. Pritzker was an owner and board member of Superior Bank of Chicago, which went bust in 2001 with over $1 billion in deposits. Timothy Anderson – who obsessively pursued the late Rep. Henry Hyde (R-IL) over his role in the failure of Clyde Federal Savings & Loan – has been quoted as saying that “Superior’s owners were to sub-prime lending what Michael Milken was to junk bonds.”
In January, Max Fraser of The Nation compared the Democratic presidential candidates’ plans to address the subprime lending issue, concluding that Obama had staked out a position to the right of not only populist Edwards but Clinton as well. Fraser blamed Obama’s economic advisers, primarily Austan Goolsbee. Since January, however, we have seen that Obama knows how to ignore Goolsbee and even suggest he was never a senior adviser.
Contributions to members of Congress from Lehman Brothers - Top five recipients in the past 20 years: Hillary Clinton, Barack Obama, Charles Schumer, Christopher Dodd, Joe Lieberman
Obama advisor Austin Goolsbee’s defense of subprime mortgages Bob Feldman, Nation (letter) – One reason Barack Obama might not want to talk about the role of financially irresponsible bank board members in creating the subprime mortgage foreclosure financial disaster is that the national finance chair of Obama’s campaign, Penny Pritzker, is a former board member of the failed Superior Bank S&L that engaged in irresponsible subprime mortgage lending during the 1990s.
According to the Encyclopedia Judaica, the Obama campaign’s national finance chair, Pritzker “served as chairman of the Superior Bank from 1989 to 1994, but the savings and loan institution collapsed” in July 2001. Created at the end of 1988 as the successor bank to the failed Lyons Savings Bank, the Oakbrook Terrace/Hinsdale, Illinois-based Superior Bank was 50 percent owned by Chicago’s billionaire Pritzker family. . . In a December 2002 Chicago magazine article, Shane Tritsch noted that for investing $42.5 million in the failed Lyons Savings Bank before it was reopened as Superior Bank, the Pritzkers and their business partner received an estimated $645 million in federal tax credits and loan guarantees; and “by one estimate, it would have cost the government $200 million less simply to shut Lyons down.”. . .
With a business loss estimate of between $350 million and $1 billion, the 2001 failure of the Pritzkers’ Superior Bank represented the largest US-insured deposition institution to fall between 1992 and 2001. According to a February 7, 2002, report by FDIC Inspector General Gaston Gianni Jr., “the failure of Superior Bank was directly attributable to the Bank’s Board of Directors and executives ignoring sound risk management principles.”
To avoid being punished for the failure of Superior Bank, the Pritzker family agreed to pay the FDIC $460 million. Yet even with this settlement, the failure of the Superior Bank due to its board’s apparent mismanagement cost the federal thrift insurance agency (and US taxpayers) about $440 million. . .
The 1,400 Superior Bank depositors whose savings deposits in excess of $100,000 were uninsured, however, brought a federal civil racketeering suit against Penny Pritzker and other former Superior Bank officials. . .
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