TheCenterLane.com

© 2008 – 2019 John T. Burke, Jr.

ObamaWatch

Comments Off on ObamaWatch

June 14, 2010

Last week, I highlighted some criticism of Barack Obama’s presidency, which came from such unlikely sources as Maureen Dowd and Frank Rich of The New York Times, as well as Tony Norman of the Pittsburgh Post-Gazette.  The man whom I described as the “Disappointer-in-Chief” during his third month in office, has continued to draw harsh criticism from unlikely sources.  At this point, the subject pondered by many commentators concerns whether any of this dissatisfaction will stick long enough to have an impact on the mid-term elections and beyond.

If the President read Tim Dickenson’s recent essay for Rolling Stone, “The Spill, The Scandal and the President”, it must have been painful.  Mr. Dickenson didn’t pull any punches while explaining Mr. Obama’s role in the Deepwater Horizon disaster:

Like the attacks by Al Qaeda, the disaster in the Gulf was preceded by ample warnings – yet the administration had ignored them.  Instead of cracking down on MMS, as he had vowed to do even before taking office, Obama left in place many of the top officials who oversaw the agency’s culture of corruption.  He permitted it to rubber-stamp dangerous drilling operations by BP – a firm with the worst safety record of any oil company – with virtually no environmental safeguards, using industry-friendly regulations drafted during the Bush years.  He calibrated his response to the Gulf spill based on flawed and misleading estimates from BP – and then deployed his top aides to lowball the flow rate at a laughable 5,000 barrels a day, long after the best science made clear this catastrophe would eclipse the Exxon Valdez.

At the Naked Capitalism website, Yves Smith summed up a good number of the Obama Administration’s shortcomings in the first paragraph of her June 11 piece about the BP mess:

As readers may know, I’ve been consistently disappointed by the Obama Administration:  its faux progressive packaging versus its corporatist posture, its half-hearted, halting reforms which are noisily trumpeted as the real thing, its deep seated belief that public antipathy to its initiatives means it needs to work harder on selling its message, when it really needs a new strategy.

But the escalating disaster of the Gulf oil spill, and the unique constellation it presents, namely, a big, rich, isolated, foreign perp, which is largely if not solely responsible for the mess, in close proximity to contested mid-term elections, might actually rouse Obama to do something uncharacteristic, namely get tough.

This is by no means a likely outcome, but we are seeing some novel behaviors.  First is that Obama finally may have succeeded in getting someone important afraid of him.  This is a critically important lesson; Machiavelli told his prince it was much more important to be feared than loved.  Mere anger is often negotiation posturing or a manifestation of CEO Derangement Syndrome; fear is much harder to fake.  And BP is finally starting to get rattled.

In case you are wondering whether the President is still popular in Hollywood, The Hill recently turned to a couple of southern California bloggers to provide some insight as to whether Mr. Obama has begun to lose his sparkle in Tinsel Town.  John Nolte of Andrew Breitbart’s Big Hollywood blog expressed the belief that the President’s supporters in Hollywood have been keeping the faith:

If anything, Hollywood is worried about and for Obama.  Worried about the upcoming mid-terms, his re-election chances, his sliding poll numbers, and his gilded ship sailing off course and landing in Carter-ita-ville instead of Mt. Rushmore.

From the more left-leaning perspective, Deborah White of The Liberal OC blog gave us the impression that the President’s Hollywood supporters are becoming increasingly disappointed, although not yet disgruntled:

As of now, President Obama has not lost the support of most Hollywood liberals.  But Democrats in Hollywood are also no longer lavishing praise on Obama as they did in hopeful droves before his triumphant election.

Hollywood liberals no longer view Barack Obama as someone they blindly “want to follow… somewhere, anywhere” as pal George Clooney famously told Charlie Rose in early 2008.

Meanwhile, Maureen Dowd has continued with her unrestrained criticism of the President.  Her June 11 column must have irritated more than a few people on Pennsylvania Avenue:

The press traveling with Obama on the campaign never had a lovey-dovey relationship with him.  He treated us with aloof correctness, and occasional spurts of irritation.  Like many Democrats, he thinks the press is supposed to be on his side.

The patrician George Bush senior was always gracious with reporters while conveying the sense that what we do for a living was rude.

The former constitutional lawyer now in the White House understands that the press has a role in the democracy.  But he is an elitist, too, as well as thin-skinned and controlling.  So he ends up regarding scribes as intrusive, conveying a distaste for what he sees as the fundamental unseriousness of a press driven by blog-around-the-clock deadlines.

During the Presidential election campaign, Mr. Obama was often described as a “Rorschach test” — people saw in him whatever they imagined.  Now that the President has been able to disappoint his supporters, the criticism is gradually becoming increasingly harsh.  As frustration over the BP crisis, unemployment and the economy continues to build — the criticism voiced by those who voted for him is likely to become more caustic.




Lev Is The Drug

Comments Off on Lev Is The Drug

January 14, 2010

The first day of hearings conducted by the Financial Crisis Inquiry Commission (FCIC) was as entertaining as I expected.  The stars of the show:  Lloyd Blankfein of Goldman Sachs, John Mack of Morgan Stanley, “The Dimon Dog” of JP Morgan Chase and Brian Moynihan from Bank of America presented themselves as likeable guys.  However, in the case of Blankfein, whenever he wasn’t talking he would sit there with that squinting, perplexed look on his face that seemed to mime the question:  “WTF?”  A large segment of the viewing public has already been primed to view these gentlemen as “The Four Horsemen of The Financial Apocalypse”.  Nevertheless, there were four more Horsemen absent from the “stage” on Wednesday:  Messrs. Greenspan, Bernanke, Paulson and Geithner.  Beyond that, Brian Moynihan didn’t really belong there, since he was not such a significant “player” as the other panel members, in events of 2008.  In fact, history may yet view his predecessor, Ken Lewis, as more of a victim in this drama, due to the fact that he was apparently coerced by Hank Paulson and Ben Bernanke into buying Merrill Lynch with instructions to remain silent about Merrill’s shabby financial status.  I would have preferred to see Vikram Pandit of Citigroup in that seat.

As I watched the show, I tried to imagine what actors would be cast to play which characters on the panel in a movie about the financial crisis.  Mike Myers would be the obvious choice to portray Lloyd Blankfein.  Myers could simply don his Dr. Evil regalia and it would be an easy gig.  The Dimon Dog should be played by George Clooney because he came off as a “regular guy”, lacking the highly-polished, slick presentation one might expect from someone in that position.  Brian Moynihan could be portrayed by Robin Williams, in one of his rare, serious roles.  John Mack should be portrayed by Nicholas Cage, if only because Cage needs the money.

Although many reports have described their demeanor as “contrite”, the four members of the first panel gave largely self-serving presentations, characterizing their firms in the most favorable light.  Blankfein emphasized that Goldman Sachs still believes in marking its assets to market.  As expected, his theme of  “if we knew then what we knew now  . . .” got heavier rotation than a Donna Summer record at a party for Richard Simmons.  John Mack, who was more candid and perhaps the most contrite panel member, made a point of mentioning that some assets cannot be “marked to market” because there really is no market for them.  Excuse me   . . .  but isn’t that the definition of the term, “worthless”?

Throughout the session, the panel discussed the myriad causes that contributed to the onset of the financial crisis.  Despite that, nobody seemed interested in implicating the Federal Reserve’s monetary policy as a factor.  “Don’t bite the hand that feeds you” was the order of the day.  All four panelists described the primary cause of the crisis as excessive leverage.  They acted as a chorus, singing “Lev Is The Drug”.  Lloyd Blankfein repeatedly expressed pride in the fact that Goldman Sachs has always been leveraged to “only” a 23-to-1 ratio.  The Dimon Dog’s theme was something like:  “We did everything right  . . . except that we were overleveraged”.  Dimon went on to make the specious claim that overleveraging by consumers was a contributing element in causing the crisis.  Although many commentators whom I respect have made the same point, I just don’t buy it.  Why blame people who were led to believe that their homes would continue to print money for them until they died?  Dimon himself admitted at the hearing that no consideration was ever given to the possibility that home values would slump.  Worse yet, for a producer or purveyor of the so-called “financial weapons of mass-destruction” to implicate overleveraged consumers as sharing a role in precipitating this mess is simply absurd.

The second panel from Wednesday’s hearing was equally, if not more entertaining.  Michael Mayo of Calyon Securities seemed awfully proud of himself.  After all, he did a great job on his opening statement and he knew it.  Later on, he refocused his pride with an homage to his brother, who is currently serving in Iraq.  Nevertheless, the star witness from the second panel was Kyle Bass of Hayman Advisors, who gave the most impressive performance of the day.  Bass made a point of emphasizing (in so many words) that Lloyd Blankfein’s 23-to-1 leverage ratio was nearly 100 percent higher than what prudence should allow.  If you choose to watch the testimony of just one witness from Wednesday’s hearing, make sure it’s Kyle Bass.

I didn’t bother to watch the third panel for much longer than a few minutes.  The first two acts were tough to follow.  Shortly into the opening statement by Mark Zandy of Moody’s, I decided that I had seen enough for the day.  Besides, Thursday’s show would hold the promise of some excitement with the testimony of Sheila Bair of the FDIC.  I wondered whether someone might ask her:  “Any hints as to what banks are going to fail tomorrow?”  On the other hand, I had been expecting the testimony of Attorney General Eric Hold-harmless to help cure me of the insomnia caused by too much Cuban coffee.

The Commissioners themselves have done great work with all of the witnesses.  Phil Angelides has a great style, combining a pleasant affect with incisive questioning and good witness control.  Doug Holtz-Eakin and Brooksley Born have been batting 1000.  Heather Murren is more than a little easy on the eyes, bringing another element of “star quality” to the show.

Who knows?  This commission could really end up making a difference in effectuating financial reform.  They’re certainly headed in that direction.



wordpress visitor