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Forum Post: This section from INSIDE JOB keeps playing in my head as Obama gears up for a second term.

Posted 1 year ago on Nov. 26, 2012, 6:53 p.m. EST by toobighasfailed (117)
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NARRATOR: After taking office, President Obama spoke of the need to reform the financial industry.

BARACK OBAMA: We want a systemic-risk regulator; increased capital requirements. We need a consumer financial protection agency; we need to change Wall Street’s culture.

NARRATOR: But when finally enacted in mid-2010, the administration’s financial reforms were weak; and in some critical areas, including the rating agencies, lobbying, and compensation, nothing significant was even proposed.

ROBERT GNAIZDA: Addressing Obama and, quote, regulatory reform: my response, if it was one word, would be: Ha!

There’s very little reform.

CHARLES FERGUSON: How come?

ROBERT GNAIZDA: It’s a Wall Street government.

NARRATOR: Obama chose Timothy Geithner as Treasury secretary. Geithner was the president of the New York Federal Reserve during the crisis, and one of the key players in the decision to pay Goldman Sachs 100 cents on the dollar for its bets against mortgages.

ELIOT SPITZER: When Tim Geithner was testifying to be confirmed as Treasury secretary, he said, I have never been a regulator. Now that said to me, he did not understand his job as president of the New York Fed.

{Timothy Geithner declined to be interviewed for this film.}

NARRATOR: The new president of the New York Fed is William C. Dudley, the former chief economist of Goldman Sachs, whose paper with Glenn Hubbard praised derivatives.

Geithner’s chief of staff is Mark Paterson, a former lobbyist for Goldman; and one of the senior advisors is Lewis Sachs, who oversaw Tricadia, a company heavily involved in betting against the mortgage securities it was selling.

To head the Commodity Futures Trading Commission, Obama picked Gary Gensler, a former Goldman Sachs executive who had helped ban the regulation of derivatives.

To run the Securities and Exchange Commission, Obama picked Mary Shapiro, the former CEO of FINRA, the investment-banking industry’s self-regulation body.

Obama’s chief of staff, Rahm Emmanuel, made 320,000 dollars serving on the board of Freddie Mac.

Both Martin Feldstein and Laura Tyson are members of Obama’s Economic Recovery Advisory Board. And Obama’s chief economic advisor is Larry Summers.

ELIOT SPITZER: The most senior economic advisors are the very people who were there, who built the structure.

WILLEM BUITER: When it was clear that Summers and Geithner were going to play major roles as advisors; first, uh, I knew this was going to be status quo.

NARRATOR: The Obama administration resisted regulation of bank compensation, even as foreign leaders took action.

7 Comments

7 Comments


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[-] 2 points by DebtNEUTRALITYpetition (626) 1 year ago

The consumer protection financial bureau is allowed to allocate around 10% of the Fed's annual budget to discipline out of control financial institutions.

It appears to be much better than nothing.

[-] 0 points by ivyquinn (167) 1 year ago

All these goons were coddled into manipulating the market. That's their agenda.

[-] 0 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

All true. Asking the kings to give back the treasure they looted. HA!

[-] 0 points by hchc (3297) from Tampa, FL 1 year ago

Well, they managed to regulate the little guy to the point where there have been ZERO new bank applications this year, and the big six continue in their consolidating madness.

The rich get richer and the poor get poorer seems to be happening quicker and quicker.

[-] 1 points by toobighasfailed (117) 1 year ago

It's crazy, isn't it? No new bank applications, plus "too big to fail" is bigger.

[-] 0 points by hchc (3297) from Tampa, FL 1 year ago

Corporatism/fascism gone wild...