R.A. Geise: Nothing has changed | SummitDaily.com

R.A. Geise: Nothing has changed

by R.A. Geise

Is the current economic debacle a “legacy” of the previous administration? That is what Timothy Geithner would have us believe after being taken to the woodshed recently and asked to resign as Secretary of the Treasury by Congressman Kevin Brady.Geithner’s assertion is an entirely different story; however, from the one told by PBS’s Frontline investigative report Oct. 20 titled “The Warning,” which traces our current problems to the euphoric go-go ’90s and “inside the highest levels of the Clinton administration”!?It was then that President Clinton asked Alan Greenspan to remain as head of the Federal Reserve Bank and also selected Goldman Sachs’s co-chairman, Robert Rubin, to be his top economic advisor. Together they formed the President’s Working Group on Financial Markets whose membership included previous Harvard economist and new assistant treasury secretary Larry “the enforcer” Summers, SEC Chairman Arthur Levitt, and Rubin’s 35-year-old protg and whiz kid Timothy Geithner.Despite a scandal in 1993 in which derivative deals between Banker’s Trust and Proctor & Gamble had already gone south, these men vehemently opposed any further regulation of Wall Street and refused to police the mysterious “black box” contracts involving OTC derivatives. But then a Washington outsider with over 20 years of derivatives law experience took over at the Commodity Futures Trading Commission (CFTC) in 1996. Brooksley Born recognized that it was the CFTC’s responsibility to oversee “the dark market” of derivatives and dared to attempt to regulate it.Born immediately became suspicious of the activities of Wall Street’s largest banks and hedge funds because “we had no information” she said. She proceeded to fight a very courageous political battle in an attempt expose any fraud. According to Ms. Born, “They were totally opposed to it. That puzzled me. What was it that was in this market that had to be hidden?” When she attempted to sound the alarm on the threat to the money of the American people, the financial elite shut her up and shut her down. According to Frontline, the financial lobby in Washington D.C. at the time was recognized as “the most well-oiled and highly financed” in its history. For every Congressman in town there were five financial lobbyists.In this environment truly astronomical amounts of derivative “insurance” were created out of nothing. From behind their closed doors, a $27 trillion market early in the decade would balloon to perhaps as much as $1.25 quadrillion in toxic assets, eventually spreading and infecting every financial entity on the planet.In the spring of 1998; however, Greenspan would declare before Congress that “The current economic performance is as impressive as any I have witnessed in my near half century…” Only a few months later long term capital management (LTCM) would blow up as a result of the financial genius and derivative “investments” of his egghead peers. Bernie Madoff does a perp walk; yet the “financial rock stars” and Nobel laureates who leveraged LTCM’s $5 billion portfolio into a trillion dollars remain free?! Brooksley Born resigned in protest from her post at the CFTC in 1999; but the “Wizard of Wall Street” Alan Greenspan (aka “the Maestro”), who ruled the fairy tale U.S. economy from behind the curtain, was awarded the nation’s highest civilian honor – the Presidential Medal of Freedom, for his “service.” Robert Rubin went on to become an executive with Citibank, resigning only eight years later with a $126 million compensation package.Make no mistake about it: The secret operations involving derivative contracts and the largest banks in the world is ground zero for the economic fallout we are now experiencing … and was facilitated at the highest levels of our own government long before George W. Bush was ever sworn into office. Has anything changed under this new administration? Larry Summers and Timothy Geithner are now Obama’s chief economic advisors. Together with current Fed Chairman Ben Bernanke, they continue to operate the President’s Working Group on Financial Markets, more commonly known on the street as “the Plunge Protection Team.” Another Goldman Sachs “Co-Head” and former Rubin deputy, Gary Gensler, now runs an impotent CFTC.R. A. Geise lives in Dillon.

Support Local Journalism

Support Local Journalism

As a Summit Daily News reader, you make our work possible.

Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.

Your donation will be used exclusively to support quality, local journalism.

For tax deductible donations, click here.

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User