Archive for ‘Timothy Geithner’

July 26, 2009

Geithner and the Scapegoat Sweepstakes

Thanks to Smitty for watchdogging the latest headlines about SIGTARP Neil Barofsky while I was on the road to Richmond yesterday. It’s important to see the big picture in this battle between Barofsky and Treasury Secretary Timothy Geithner:

The Wall Street bailout has been unpopular from its inception. . . . Now, we see unemployment soaring (more than 15% in Michigan, near 12% in California) and consumer confidence falling, while the stock market surges upward. You can’t blame people for suspecting that massive taxpayer-funded assistance to financial giants like AIG, Goldman Sachs and Bank of America might have something to do with this widening chasm between prosperity on Wall Street and misery on Main Street. . . .
Polls indicate a growing perception that the Obama administration is mismanaging the economy, with special favors for politically connected Wall Street fat cats at the expense of ordinary American taxpayers. . . .
With another approaching crisis in banking and forecasts that unemployment will continue rising for months to come, Obama will eventually start looking for a scapegoat. Though once hailed as an economic savior, the nominee who was “too big to fail,” Geithner is now odds-on favorite to win the Scapegoat Sweepstakes. SIGTARP Barofsky’s watchdogging of the bailout “black hole” may be enough to push Geithner across the finish line.

Read the whole thing, which includes a “document dump” with Barofsky’s quarterly IG report and other important documents on this important aspect of IG-Gate.

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July 22, 2009

Rule 3 on IG-Gate (Plus, Notes forNewbies on Aggregation Method)

There’s a Memeorandum thread this morning linking the Hot Air IG-Gate Update, which got Instalanched. and is also linked by Frugal Cafe. Note that the Memeorandum thread also includes Joe Weber’s Washington Times interview with fired AmeriCorps IG Gerald Walpin:

“For a second I was thinking, ‘Why do I need all of this?’ I’ll just resign and go back to my good legal practice in New York,” Gerald Walpin told The Washington Times’ “America’s Morning News” radio show Tuesday.
“But I would then be part of the apparatus that is totally torpedoing the inspectors general,” Mr. Walpin said. “The watchdog would not really be a watchdog. He’d just be afraid of his shadow.” . . .

That’s new stuff, see? It was linked together with the IG-Gate Update in a post at Right Wing News. If several different blogs aggregate that stuff together, it creates sort of a center of gravity in the ‘sphere that is picked up by the Memeorandum algorithm.

And the Right Wing News post also includes today’s Washington Post story about Neil Barofsky — SIGTARP, special inspector general for the TARP bailout — who raised hell on Capitol Hill yesterday. As of 7 a.m., that story was not included in the Memeorandum thread, but given that Sen. Chuck Grassley has been defending Barofsky’s office against Treasury Secretary Timothy Geithner, (see Grassley’s June 17 letter to Geithner in PDF) it’s very much part of the same story.

Building up a Memeorandum thread, with everybody commenting on the same news stories and cross-linking, is what Rule 3 is about. Newbies should always hat-tip Memeorandum when they do this. Even if the increase in your traffic is not immediately significant, every time somebody links your blog, it boosts your Technorati ranking — you did remember to install Technorati, right? — and, eventually, you’ll be showing up on Memeorandum’s radar.

Think of it this way: When one dog in the neighborhood starts barking, they all start barking. That’s why Jimmie Bise dubbed us The Million Hit Squad.

If you need more background on the IG-Gate story, try the Mother of All Updates.

UPDATE: Yet more juicy SIGTARP goodness:

Barofsky testified that taxpayers aren’t being told what most TARP recipients are doing with their money or what their investments are worth and may never be told exactly how their taxpayer dollars are being used.
At a Government Oversight and Reform Committee hearing, one lawmaker compared Treasury to convicted Ponzi scheme artist Bernie Madoff, accused Treasury of trying to undermine Barofsky’s independence and threatened to haul Treasury Secretary Timothy Geithner before the panel if he didn’t adopt the IG’s recommendations.
“For us to get past this economic situation that we find ourselves in, the public has to believe that we’re doing the right thing,” said Rep. Elijah Cummings (D-Md.). “If we can’t show them that we are doing the right thing with their money, we’re going to have problems.” (Emphasis added.)

When Democrats start talking like that, you know it spells trouble for Geithner.

UPDATE II: Text of closing statement by Chairman Towns:

Earnings at the largest banks and the bank holding companies such as JP Morgan and Goldman Sachs are up, yet lending remains down. It is unacceptable that profits go up, while lending goes down. The taxpayers have invested very large amounts of money in these banks, but what have we gotten in return? It remains unclear.
The taxpayers deserve to know how their tax dollars are being spent.
The Treasury Department needs to publish full and detailed information on the use of TARP funds and publish the value of the TARP portfolio on a monthly basis. They have that information and they should make it public.
Moreover, Treasury also requires the largest banks to file monthly reports showing the dollar value of their new lending. That should be made public also.
If Treasury doesn’t put this information up on its website, this Committee will. And if Treasury doesn’t turn over this information voluntarily, Secretary Geithner will be brought before the Committee to explain.
What we have heard today convinces me that one of the best things Congress did when it created the TARP was to also create the Special Inspector General to oversee TARP spending. I can now understand why the Treasury Department would like to rein in the SIGTARP. But we are not going to let that happen.

Heh.

UPDATE III: Just got off the phone with a source on Capitol Hill who tells me yesterday’s Hot Air IG-Gate Update is a big hit with Republicans. Speaking of Republicans, here’s Rep. Darrell Issa:

The Special Inspector General of the Troubled Asset Relief Program (SIGTARP) Neil Barofsky testified today at a hearing of the House Committee on Oversight and Government Reform that the Treasury Department has “repeatedly failed” to implement SIGTARP recommendations that would reveal how Treasury is using taxpayer dollars. At the conclusion of the hearing, Ranking Member Darrell Issa (R-CA) asked Chairman Towns to bring Treasury Secretary Timothy Geithner before the Committee to address the questions raised by SIGTARP’s report. . . .
“We heard today that full transparency, which we called for, the President asked for and this Administration promised, is being blocked by the bureaucracy which often says ‘just trust and we will deliver,’” Issa said. “Until we have full transparency, we will never be able to know how much risk Treasury is assuming on behalf of the taxpayers. This Administration promised an ‘unprecedented’ level of accountability and transparency. They set their own standard. Now we’re going to hold them to it.”

Click here for Issa’s statement.
Click here for Neil Barofsky’s testimony.
Click here for a copy of the SIGTARP Report.

July 20, 2009

SIGTARP Strikes: IG Barofsky Report SaysTreasury Not Tracking Bailout Cash

The watchdog bites Tim Geithner:

The top watchdog over the financial bailout package said the Treasury Department is rejecting “common sense” by not requiring banks receiving billions of dollars in government money to say how they are using the money.
In a report to be released on Monday, Neil Barofsky said banks that have received money from the $700 billion bailout package passed last year are able to indicate how they are using taxpayer money and that Treasury should require banks to be more transparent. . . .
Barofsky is the Special Inspector General over the Troubled Asset Relief Program (SIGTARP) that was passed by Congress in October. . . .

Read the whole thing. This SIGTARP report is a perfect example of why the Obama adminstration hates IGs. The Democrats just want to shovel money out the door and don’t care who gets it, except to be sure their well-connected friends get their share.

According to the liberal neo-Keynesian economic gospel, as long as the federal government does X-billion dollars of deficit spending, that will produce X-plus-Y amount of stimulus value (where Y = Magic Government Spending Multiplier Effect) without regard to whether the money ends up feeding orphans or supplying the mistresses of Goldman Sachs executives with bustiers and garter belts

Unfortunately for liberals, the stupid taxpayers can never seem to comprehend the nuances of neo-Keynesian theory the way Nobel Prize-winning genius Paul Krugman does.

No matter how many times they’re lectured about this “stimulus”/bailout brilliance, the idiots who pay the taxes get a little miffed to discover that their great-grandchildren’s future has been hocked to pay for new wallpaper and wainscoting in the executive lavatory of a giant banking conglomerate which — as every expert in Washington explained last fall — was so frantically in need of cash that the branch managers were sending tellers to sell plasma to the blood bank, merely to prevent a complete catastrophic meltdown in the global finance system.

Those stupid taxpayers are like that. They have a habit of remembering irrelevant minor details like those 90-point headlines on the front pages of all the newspapers:

CRISIS LOOMS: WORLD ECONOMY TEETERS ON BRINK OF FINAL APOCALYPSE; CONGRESS DESPERATELY FIGHTS TO AVERT ECONOMIC DOOMSDAY; PLAGUES OF LOCUSTS, FROGS FEARED

Damned idiot taxpayers. What do they know about economics and budgets and stuff that only people with Ivy League Ph.Ds can ever hope to understand?

(H/T: Memeorandum.)

June 23, 2009

IG-Gate: Asking the right questions

The unexplained resignation of AmTrak inspector general Fred Wiederhold raises an important question:

WHO IS ELEANOR ACHESON?

Exactly why that’s an important question . . . well, maybe Fred Wiederhold could explain that, but nobody’s heard a word from Fred since he resigned Thursday.

What we do know is that Wiederhold was asked to provide “specific examples of agency interference with OIG audits and/or investigations.” Maybe if somebody looked closely at those specific examples, they’d find Ms. Acheson’s fingerprints, but that’s strictly a hypothetical, because Wiederhold resigned before he could produce those specific examples.

What we do know is that Amtrak is Joe Biden’s favorite government boondoggle, that Ms. Acheson donated to Biden’s presidential campaign, and that Amtrak is budgeted for $1.3 billion in stimulus money — money that Wiederhold would have been watchdogging for “waste, fraud and abuse,” if he hadn’t resigned last week.

Another question that needs to be asked: When are Sen. Joe Lieberman and Sen. Susan Collins going to convene a hearing on the firing of AmeriCorps IG Gerald Walpin?

As Rick Moran notes at American Thinker, we’re now up to three ex-IGs in less than two weeks and there seems to be a pattern developing. This is to say nothing of the situation with Neil Barofsky, special IG for the TARP bailout money, who is at odds with Treasury Secretary Timothy Geithner.

You spend a little shoe-leather on Capitol Hill, and next thing you know, somebody’s explaining that the two questions for Timothy Geithner are “what did he know and when did he know it?”

Watch out for that bus, Mr. Geithner.

Thanks to Carol at No Sheeples Here for the artwork, which is merely hypothetical. Thanks to Jimmie Bise for paying close attention, and to Pundette for her praise of the old-fashioned shoe-leather method.

UPDATE: Jehuda the Rhetorican sees the plot thickening and, as predicted, Michelle Malkin likes the Ellie Acheson question.

The point is, it’s the right question. After I posted about Acheson, I made a phone call: “Am I right?”

“Even more right than you were a couple of hours ago.”

We’ll call that source Deep Cleavage. Throw ’em so far off the scent, they’ll need a map . . .

UPDATE II: More linky-love for the Amtrak IG story from Frugal Cafe and Fire Andrea Mitchell.

UPDATE III: Acheson was brought in as general counsel after Amtrak fired five top officials in December 2006. Thanks to Moe Lane for the tip.

June 23, 2009

Your Man In Washington

“Oh, I remember you,” said the receptionist. “You were here last week.”

Indeed, I replied, adding that I’m likely to become a familiar face. When she asked my name, I handed her a business card, and she bid me to have a seat while the person whom I’d come to see was summoned.

Monday afternoon found me on Capitol Hill, once more asking questions about the Obama administration’s campaign against inspectors general. As Smitty says, volume of fire has an accuracy all its own, and so I’ll be making more trips like this in the near future.

Sitting in the lobby of this office, I inquired about directions to another office. The receptionist gestured this way and that — “go down by the elevators and out that way . . . go left . . . past the Capitol and across . . .” — in such a manner that even an old Boy Scout like me might never get there in time for his appointment 45 minutes later.
“Hmmm, sounds complicated . . . do you have some kind of map?” I asked. She walked over to hand me a tourist-type 7″x14″ map bearing the motto “Getting Around Washington.”

This map was of such a scale as to have the intersection of Florida and New York avenues in the northeast corner and Arlington Cemetery in the southwest corner. The type was in a nearly microscopic font — 4-point Helvetica, I’d say, although I didn’t have a pica gauge handy.

With its itty-bitty buildings, teeny-tiny streets and miniature lettering, this map was unlikely to be much assistance to a guy from out of town trying to make his way hurriedly from one office to another. Yet the map could still be useful to an experienced Washington journalist.

“Now, which building are we in?” I asked, holding the map in front of me. The receptionist leaned over and pointed as she explained the directions again.
“Yes, I see,” I said with sincere appreciation.

Just then a door opened and the person I’d come to see entered the lobby, interrupting my cartographic inquiry. He and I spoke in a small conference room for about 15 minutes. There was someone else he wanted me to meet but, checking his Blackberry, he reported that this person did not seem to be returning his calls and text messages.

What is it with these young people in Washington nowadays? Must all communication be conducted by Blackberry and iPhone? Does it never occur to them that in certain circumstances the best method might be to do a little walking and knock on somebody’s door?

“Listen, if you know where this guy’s at, I say we go get him,” I suggested, but he balked.

We talked some more — I’ll tell you about it in an upcoming story — and then I mentioned my appointment in another building.

“What time do you get off work here? Maybe we could meet for beers and burgers later.” Alas, no — his girlfriend was returning from New York and they needed to catch up.

Drat. Well, another appointment awaited on the other side of the Capitol and who knew how long it would take to get there? The fellow walked me back into the lobby, and was prepared to take his leave, but I suggested he step out into the hallway with me.

“This Iran thing is sucking up all the media oxygen right now, but that won’t last forever,” I said, and explained what I intended to do. He agreed that more people ought to be doing it my way.

Was he just trying to humor me? Does he think I’m . . . OK, eccentric would be the polite way to say it, but “eccentric” is for rich folks. I’m just plain crazy.

No one could argue with that, but crazy works, if it’s the right kind of crazy. Walking up First Street toward Constitution Avenue, then cutting across the Capitol grounds toward Independence Avenue as if I knew exactly where I was going, I called my next appointment to inform her of my ETA. Then I immediately called another source, who also knows Capitol Hill like the back of his hand, arranging to have coffee Wednesday morning before Grover’s meeting.

The high temperature was 85 in D.C. Monday, and I was wearing a blue blazer, striped silk tie, button-down blue shirt, olive slacks and black leather shows. Crazy, but sharply dressed.

Considerations of honor require that a Georgian never complain about summer heat within earshot of a Yankee, and my next appointment was one such. So while going through the magnetometers — damn those terrorists, for imposing all these bothersome security hassles on a patriotic American journalist — I soaked up the air-conditioning and concentrated on becoming mentally cool. On the elevator up, I buttoned the blazer and wiped the sweat off my face.

Down the corridor, around the corner, into the office, poke my head in and ask to see the person with whom I had the appointment. She emerges wearing a T-shirt and shorts, since her next appointment is at the gym for an African dance class, to be followed by a jog around the Mall.

What is it with these young people in Washington nowadays? Exercise! I’d walked about seven blocks already since parking my car at Union Station, but that was mere transportation — utilitarian pedestrianism — whereas one can’t exercise without donning shorts and paying a gym fee.

Exercise is a form of conspicuous consumption, an ostentation of leisure: Look, I’m exercising! To qualify as exercise, the activity must never take the form of anything useful, remunerative or commonplace — pushing a lawnmower or moving furniture may have cardiovascular benefits, but are too plebian to be considered exercise. The roofer who totes shingles and swings a hammer for eight hours a day is not exercising, nor can the adult entertainer who does table dances between her stage routines on the stripper pole be said to exercise.

Well, never mind the sociological observations. I’m shown around the office and introduced. There’s a water cooler, so I get a cup of that. Then I offer to walk the health-conscious staffer to her gym appointment — another four blocks for me, but I’m not exercising, because it’s about finding out how the staffer can help me get the story. (Useful and perhaps remunerative, if less commonplace than it once was.)

The staffer gets to her gym, and I non-exercise three blocks up to the Tune Inn on Pennsylvania for a burger, fries and beverage. CNN is reporting the Metro crash, but my eyes are on the stock market news — the Dow’s off 200 points. Call Jimmie and ask him to post the “Wall Street P.M.” report at NTCNews.com. And, oh, yeah — the Metro crash, too.

Am I indifferent to death and grievous injury in a train wreck? No. But the slumping market is relevant to my business on Capitol Hill, you see. Treasury Secretary Timothy Geithner is the genius who’s on the hook for the neo-Keynesian “bailout” that is manifestly failing to achieve its objectives as economic policy. (It Won’t Work.)

Geithner also appears to be on the hook for the suspicious shenanigans with TARP Special Inspector General Neil Barofsky. Heh heh heh. How would you like the be a Treasury secretary presiding over a stock market sell-off while, at the same time, you’ve got people on Capitol Hill poking around a potential scandal with your fingerprints all over it?

There’s plenty enough room under the Obama bus for Geithner, you see, and he’s starting to look like an increasingly convenient fall guy. So even if my Capitol Hill trip Monday wasn’t as fruitful as I’d hoped, the story continues developing, and I’m steadily accumulating more face-time with possible sources.

Maybe I wasn’t exercising as I walked back to Union Station, but I was certainly smiling. Ain’t no school like the Old School. And you’d be surprised what scandalous facts an experienced journalist can uncover.

All I need is a map.
June 21, 2009

Obama’s no Daley, but . . .

Michael Barone in the Examiner:

His first political ambition was to be mayor of Chicago, the boss of all he surveyed; he has had to settle for the broader but less complete hegemony of the presidency. . . .
Chicago-style, he has kept the Republicans out of serious policy negotiations . . . Basking in the adulation of nearly the entire press corps, he whines about his coverage on Fox News. Those who stand in the way, like the Chrysler secured creditors, are told that their reputations will be destroyed; those who expose wrongdoing by political allies, like the AmeriCorps inspector general, are fired.

Speaking of Chicago, John Kass of the Chicago Tribune laughs to scorn the shocked! shocked! reaction over Obama’s move against inspectors general:

The use of political muscle may be prohibited in the mythic transcendental fairyland where much of the Obama spin originates . . . But our president is from Chicago. . . . David Axelrod and chief of staff Rahm Emanuel come right from Chicago Democratic machine boss Mayor Richard Daley. They don’t believe in fairies . . .
It’s the Chicago Way. Now, formally, it’s also the Chicago on the Potomac Way. . . .

You can read the rest, which is also discussed in today’s “300 Words Or Less” editorial at NTCNews.com, and linked at Memeorandum. At this point, IG-Gate raises two basic questions:

  1. Does all this suspicious smoke indicate a genuinely scandalous fire? That is to say, is there genuine crime or ethical misconduct involved, or are the inspectors generals just victims of political hardball which, while rudely thuggish in typical Chicago fashion, is not actually criminal?
  2. If there is a real scandal, will the Obama-worshipping press ignore it?

After I filed my Friday report at Pajamas Media, I noticed a lot of comments along the lines of, “Oh, Obama will get away with this because the MSM is in the tank.” This is a presumption — indeed, perhaps, two or three presumptions — too far.

Conservatives can be excused for thinking that rampant Obamaphilia in the press corps will protect The One from any possible consequences for malfeasance or error, if only because this has hitherto been the case. But . . .

Honeymoon kisses ain’t news. An FBI investigation of an alleged cover-up is news. The snobs and sycophants in the White House press corps might be predisposed to ignore or dismiss this story but — believe it or not — there are still a handful of real old-fashioned reporters in America who get excited at the prospect of scoring an exclusive, and who don’t give a damn what the political consequences are.

Not every reporter in America is part of the Washington press elite. But if some reporter at Sacramento Bee aspires to join that elite, what better way than to dig in on this Walpin/St. HOPE/Kevin Johnson/AmeriCorps story and try to turn it into an award-winning investigative series?

It doesn’t matter what the political angle is. The hotshot California reporter who scores scoop after scoop on a story of national consquence can build a stack of clippings demonstrating his investigative chops, get some of his stories linked by Drudge and cited by other news organizations and, next thing you know, somebody’s paying his round-trip plane fare to Washington or New York to interview for a big new job.

Upward mobility in a declining industry? Kinda cool.

There’s another angle to think about, however. Beyond the Walpin/AmeriCorps story, TARP special IG Neil Barofsky has got himself in a tangle with Treasury Secretary Timothy Geithner, and notice who’s paying attention to that story. The Obama aura is powerful, but it offers very limited coverage to the ungainly Geithner.

The Geithner/Barofsky feud is going to be covered by lots of New York-based financial reporters who don’t give a damn about the Beltway elite. The Wall Street Journal, Investors Business Daily, Bloomberg News — reporters for outfits like that usually have an indifference to the attitudes of the politics crowd. Indeed, you’ll occasionally find a financial reporter who thinks capitalism is OK. Just to cite one example, investigative journalist Matthew Vadum first came to D.C. as a financial reporter.

And there’s still the factor of good old-fashioned competition in the press. The editors of the Washington Post aren’t going to sit still and twiddle their thumbs if the Examiner, the Politico and the Washington Times start scoring a string of scoops on this story. And the same is true of the TV networks. Check out this Thursday exchange between ABC’s Jake Tapper and WH press secretary Robert Gibbs:

TAPPER: Earlier this year the special inspector general for TARP Neil Barofsky tried to get documents relating to AIG. The Treasury Department rebuffed that request, and although ultimately I think they did turn over the documents, the Treasury Department sought a ruling from the Justice Department on just how independent Neil Barofsky’s office is supposed to be. Please explain from the administration’s perspective what exactly is going on here and why it appears as though the Treasury Department is pushing back against an independent inspector general.
GIBBS: Well, obviously, Jake, the president believes that inspectors general fulfill a unique and important role in ensuring that programs operate with efficiency. No attorney-client privilege on any of this stuff has been invoked. No documents sought have been or are being withheld. The DOJ review is not related to any particular investigation. It is sorting out legal issues relating to the creation of the office.
TAPPER: Right. But could you explain — could you actually answer my question? I understand the talking points you’ve been given, but . . .

Read the rest of that, and think of how some other reporters in the White House press corps must have been high-fiving Tapper afterwards. (Honestly, not all of them are completely in the tank with Chris Matthews’ leg-thrilling affection for O.)

As with the charmless Geithner, the media’s love for Obama won’t suffice to protect every member of his administration. Norm Eisen has no unicorns-and-rainbows mystique of Hope, and just wait until the D.C. press corps starts sniffing around the unexpected resignation of the AmTrak inspector general. (Gee, what gaffe-prone politician considers AmTrak his personal pet program?)

The fundamental problem the IG investigation presents to the Obama administration is the contradiction to its oft-declared commitment to transparency, as Jimmie Bise Jr. observes at the American Issues Project:

It could very well be that this small scandal becomes the lead domino that begins a chain reaction that could spell unmitigated disaster for the Obama administration. Regardless, the Inspector General firings and the Treasury Department’s unwillingness to cooperate with IG Barofsky are another sign that when they administration claimed to be in favor of greater accountability, it was only blowing smoke.

Despite all the headlines to date, IG-Gate has yet to break through to the status of a major scandal, mostly because the potentially revolutionary developments in Iran have captivated public attention. Yet when the chaos in Iran subsides, the investigations of the IG firings will keep going and, as Jimmie says at Sundries Shack, it looks like this scandal is growing legs. More dominoes may be falling soon . . .

(Thanks to the Blogosphere’s Photoshop Queen, Carol at No Sheeples Here, for the artwork.)

UPDATE: Transparency? We don’t need no stinkin’ transparency!

As a senator, Barack Obama denounced the Bush administration for holding “secret energy meetings” with oil executives at the White House. But last week public-interest groups were dismayed when his own administration rejected a Freedom of Information Act request for Secret Service logs showing the identities of coal executives who had visited the White House to discuss Obama’s “clean coal” policies. One reason: the disclosure of such records might impinge on privileged “presidential communications.” The refusal, approved by White House counsel Greg Craig’s office, is the latest in a series of cases in which Obama officials have opted against public disclosure. . . .
After Obama’s much-publicized Jan. 21 “transparency” memo, administration lawyers crafted a key directive implementing the new policy that contained a major loophole, according to FOIA experts. The directive, signed by Attorney General Eric Holder, instructed federal agencies to adopt a “presumption” of disclosure for FOIA requests. . . . But in a little-noticed passage, the Holder memo also said the new standard applies “if practicable” for cases involving “pending litigation.” . . .

Read the whole thing. Obviously, Michael Isikoff’s legs aren’t tingling. BTW, one of the reasons I’m compiling this round-up is for the benefit of another one of my sources, who has a background in federal law enforcement and knows a thing or two about investigations.

UPDATE II: Little Miss Attila:

I think this is very simple: 1) on a national stage, one cannot fire whistle-blowers willy-nilly. Even lefties don’t like that, because everyone understands what that does to the system: when burglars are encouraged to feed poisoned dog food to the Dobermans that guard the shop, Bad Things are likely to happen.

So far, however, it’s like looking for investigative reporting in the Jonas Brothers fan-club newsletter.

UPDATE III: Red State‘s Moe Lane:

I suggest that any journalist reading this and thinking about pursuing it further might want to start by examining this odd story from last year involving a supposedly fake letter coming from Amtrak Superintendent Joe Deely. Not to mention this OSHA release on a whistleblower . . . Not that Weiderhold is directly linked to either case, but these seem to be to be the most controversial cases recently involving internal problems requiring the attention of an Inspector General.

Read the rest.

UPDATE IV: The Washington Times:

On the very same day that the president fired Mr. Walpin, St. Hope’s executive director, Rick Maya, left his job at St. Hope. He did not go quietly. His resignation letter charged Mr. Johnson and several St. Hope board members with numerous ethical violations. Most explosively, he charged that a board member improperly deleted e-mails of Mr. Johnson’s that already were under a federal subpoena. . . .
On Wednesday, the Sacramento Bee reported that Mr. Maya’s allegations have been deemed serious enough that the FBI is investigating potential obstruction of justice at St. Hope. In that light, the firing of Mr. Walpin, who properly blew the whistle on mismanagement and possible corruption, looks ill-considered. . . .

Read the rest. Strange — the phrase “second-rate burglary” just came to mind, like a 1972 acid flashback . . .

UPDATE V: Ed Driscoll sees Obama doing a reverse-Clausewitz — politics as warfare — while Glenn Reynolds inexplicably links the Hartford Courant, but quotes a commentary by Salena Zito of the Pittsburgh Tribune-Review, making excuses for the fan-club-newsletter press corps:

The press could help keep things honest but has fewer resources and readers . . .

Whine, whine, whine. Look, lady: How hard could it be for reporters from the Tribune to ask Arlen Specter or Bart Sestak to comment on the IG firings? Hey, I’ve got an idea, Ms. Zito: How about you pick up the freaking phone call them for a comment?

Why is it nowadays, whenever editors hire somebody to write op-ed columns, it’s never anybody who knows how to pick up a telephone? And then the lazy can’t-use-a-phone op-ed idiots wonder why they have fewer readers . . .

UPDATE VI: Pundit & Pundette links with some thoughts on Obama’s Chicago Way. Meanwhile, at 1:30 a.m. Monday, I’ve just made an executive decision to go down to Capitol Hill again today and talk to more sources.

There is no substitute for old-fashioned shoe leather. Just show up unannounced and buttonhole your source. It’s an infallible method. Make a nuisance of yourself until they figure out that they need to start calling you, or else you’ll be back again bugging them tomorrow.

PREVIOUSLY:

June 18, 2009

WTF happened to ‘caveat emptor’?

Poking around the Web, I noticed lots of liberals whining that Obama’s massive new financial-industry regulatory scheme — which analysts worry will suck the profits out of banks — doesn’t go far enough.

Let’s face it, liberals won’t be happy until there are more regulatory bureaucrats than there are bankers. You’ll walk into your bank to cash a check, and three federal regulators will have to sign off on the transaction, with another regulator assigned to decide whether your kid gets a lollipop.

Don’t believe me? Liberal blogger Simon Johnson:

But based on what we see so far, there is little reason to be encouraged. The reform process appears to be have been captured at an early stage — by design the lobbyists were let into the executive branch’s working, so we don’t even get to have a transparent debate or to hear specious arguments about why we really need big banks.
Writing in the New York Times today, Joe Nocera sums up, “If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad.”

OK, so who exactly is Simon Johnson, and who put him in charge of deciding whether banks are too big? Well, ho, ho, ho:

Simon Johnson, former chief economist of the International Monetary Fund, is a professor at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He is a co-founder of The Baseline Scenario. Update (April 2009): Johnson has joined the CBO’s Panel of Economic Advisers.

Johnson worked for the IMF which certainly gives him credibility to talk about banks being too big, eh? As for experience in the for-profit private sector, we have zero evidence that Simon Johnson could turn a profit on the sno-cone concession in Hell.

Which brings me back to the original question: WTF ever happened to caveat emptor?

Banks are not in business to minimize your risk, but to maximize their own profits. Ditto mortgage companies, real-estate agencies, stock brokers, mutual funds, et cetera. I don’t care whether you’re transacting business with Citibank or a pawn shop, the guy on the other side of the counter is there to turn a profit, and it isn’t his job to look after your interests — except insofar as his reputation for trustworthiness helps him attract customers.

Economic Nerf-World
You got scammed by Bernie Madoff? You bought Citi at $54 a share and now it’s at $3 a share? You mortgaged yourself to the max for a new Vegas condo in 2005, based on your salary at a development company that got wiped out when the Vegas real-estate boom evaporated in 2007?

Whose fault is all that, huh? Why is it the job of the federal government to cover the economy in foam Nerf padding like a McDonald’s Playland so that you never suffer for your own financial stupidity?

Liberals want to make the financial sector so “safe” that I could hand my paycheck to my 10-year-old son, let him invest it in Nintendo games and baseball cards, and still be guaranteed a profit.

Not that I don’t empathize with economic losers. I made the clever decision in 1986 to go into the newspaper business, which hasn’t exactly been a juggernaut of growth lately, as you might have noticed by the fact that I’m now shaking the tip jar for blog-o-bucks. (Despite their expressions of concern for boosting economic recovery, Tim Geithner and Ben Bernanke ain’t hittin’ my tip jar.)

Compared to some other people, though, I’ve been relatively unscathed by the meltdown. I know retirees who lost hundreds of thousands of dollars in the Big Wipeout of 2008, not to mention all the people I know whose jobs are directly linked to the devastated housing market.

Poverty As Security
I might have lost my butt, too, except for the fact that I had a lot less butt to lose. Couldn’t afford a D.C. condo during the bubble, you see, so I’m still renting, 12 years after we sold our little Georgia bungalow and moved to Washington. So boo-hoo-hoo for the idiots who are upside down on their mortgages, and boo-hoo-hoo for the fat cats who thought Bernie Madoff was going to make them rich.

Becoming a journalist was, in retrospect, a stupid career move, but maybe I’m not quite as stupid as some of those guys who got rich doing something else and then pissed it all away on bad investments. Why should the federal government intervene and deprive us of future opportunities for schadenfreude?

If you went to the county fair and let a carnie hustle you out of $100, do we need a Federal Bureau of Ring-Toss to protect you from yourself? Maybe a federally-mandated advisory sticker on every video-poker machine at the Indian casino: “WARNING: Winning Not Guaranteed.”

Maybe caveat emptor has gone by the wayside because schools don’t teach Latin anymore. So let’s go ahead and ditch E Pluribus Unum while we’re at it. Try a new slogan in English: “Never Give A Sucker An Even Break.”

A sucker is born every minute. You see the suckers every time you walk into a convenience store and have to wait in line behind some fool who requires five minutes to complete his lottery-ticket purchase: “OK, give seven of the Pick Three and five Powerballs . . . yeah, right, now give me six each of Lucky Lady, Pot O’ Gold . . .”

The 401(k) Lotto
You’re reading a blog post about economics and financial regulation, so when you find yourself in that all-too-familiar convenience-store scenario, you almost certainly look down your college-educated nose at the poor idiot throwing away money on lotto tickets.

So, tell me, how’s your 401(K) been performing the past couple of year, Mr. Smart Guy? And how much cash-in-hand would you walk away with, if you had to sell your house tomorrow?

If you’re one of those whiny pukes who wants Uncle Sugar to fix the economy so that you don’t ever suffer a loss on your investments, so that you’re guaranteed permanent employment and health care and retirement security, I despise you far more than you despise that chump buying $37 worth of lotto tickets and a pack of Newports. At least those Newports are worth something, compared to a lot of mortgages brokered by Fannie Mae and Freddie Mac.

My idea of “financial reform” is to pull the plug on this bailout/stimulus/regulation/subsidy racket and let some overprivileged Smart Guys get first-hand experience in the virtuous poverty they’re always admiring from a safe distance.

Given the record of previous Democratic administrations, I’d say it’s an even bet that Tim Geithner goes from Treasury secretary to federal prison inmate, so maybe when he gets out of Leavenworth . . .

Well, he’ll sure have a new perspective on the barter value of a pack of Newports, won’t he?

* * * * *

(Get daily financial and economic news updates at NTCNews.com. And hit the tip jar, you swine.)

June 15, 2009

‘Experts’ Euthanize the U.S. Economy

What does the long-ago death of a matinee idol tell us about the likely results of Obamanomics? Glad you asked!

Actual science involves the ascertaining and application of facts, with the knowledge that there are more facts in the universe than any person can ever possibly know. The pseudo-religion of Science, by contrast, involves the belief that “experts” already know all the important facts, and that much of what we normally call “common sense” is contradicted by the facts most recently discovered by these experts, who constitute the high priesthood of the cult of Science. . . .
Think about how, when Timothy Geithner’s nomination as Treasury secretary was before the Senate, we were told that Geithner — who couldn’t even correctly calculate his own income tax — was nonetheless the only man in the country who could save our economic fortunes. Even Republicans praised Geithner, with Sen. Orrin Hatch of Utah calling him “a person of great integrity.” . . .
Last week, financial analyst James Quinn portrayed Geithner, President Obama and Federal Reserve Chairman Ben Bernanke as the Larry, Curly and Moe of an economic slapstick routine that would be hysterically funny, if only the consequences weren’t so predictably tragic. . . .
We should hardly be surprised that the journalistic priesthood sings the praises of the economic priesthood, even as Dr. Larry, Dr. Curly and Dr. Moe proceed to administer to the American economy the kind of Science that the surgeons provided to the late Jeff Chandler.

Read the whole thing.

UPDATE: The DJIA was down 200 points at noon. Maybe some “squirrels” are getting wise to the game.

UPDATE II: Somewhat related: Liberal mathematics.

March 24, 2009

And the bad news is . . .

. . . there is no good news:

American consumers still have debt coming out of their ears, and they’ll be working it off for years. House prices are still falling. Retirement savings have been crushed. Americans need to increase their savings rate from today’s 5% (a vast improvement from the 0% rate of two years ago) to the 10% long-term average. Consumers don’t have room to take on more debt, even if the banks are willing to give it to them.

Via Hot Air, where the one-day “Geithnermaniabounce is examined from several points of view. My own point of view is that last week’s Fed buy-up of Treasury notes represents the fateful step into the fiscal/monetary abyss of Weimar America. We are so f****d now that the only question is what kind of financial rubble we will find most useful in rebuilding the shattered wreck of an economy that will be left desolated by the remorselessly descending spiral of inflation/stagnation that now begins in earnest.

How bad will it get? Nobody knows. A friend of mine remarked to me last week . . . well, I won’t repeat it. Bad. Very bad.

Look: The Geithner bounce caused Citigroup to close over $3, but for most of the past few weeks, you could buy a share of Citigroup for less than the fee you pay every time you use your ATM card. And my hunch, although only a hunch, is that Citigroup will be down around $2 again by next week. (Richard Bernstein: SELL!)

What’s going on? Let Alex Knapp and Andrew Sullivan encourage others to sneer at the “Going Galt” phenomenon, but the simple facts are (a) we entered 2009 facing a severe capital shortage, (b) the Obama administration’s moves seem calculated to scare capital to death, and (c) without capital, capitalism doesn’t work. (Of course, without capital, socialism doesn’t work either, but I don’t have time to explain that right now.)

More than a month ago, when the Dow had just dipped under 8,000, I noted that UC-Irvine Professor of Economics and Public Policy Peter Navarro was predicting the DJIA to fall to 6,000. It closed Monday at 7,775.86, which means . . .? If you’re in a position to short the financials, do it. But that’s just an economics professor talking. What does he know?

What Sully and the other economic ignorati don’t seem to see is how Obamanomics is leading us into the deadly fiscal/monetary pincers:

  • There is a market for debt. At any given time, there is a finite amount of capital liquidity in the world. When the U.S. government goes on a massive deficit spending spree, this represents . . .? Increased demand for capital via the debt (bond) market. Very good, class. But the increased capital demand created by Uncle Sam’s deficit spree results in greater scarcity of capital for other purposes, including investment in private industry (stocks). And as Uncle Sam’s demand is piled onto his already ginormous stack of unpaid debt, the natural workings of the debt market would cause interest rates to rise, but . . .
  • The Fed is rigging the game. By ginning up phantom dollars to purchase Uncle Sam’s debt, Bernanke is engaged in legalized counterfeiting. The inflationary effect is not immediately reflected in consumer prices because we’re in a deflationary cycle where nobody’s buying anything anyway. The effect of Bernanke’s phantom-dollar swindle, therefore, is to devalue investment dollars. Even if your 401K got a miniscule bounce Monday, your real net worth has been diminished by Bernanke’s devaluing of the dollar. And finally . . .
  • Unfunded liabilities are coming due. The first Baby Boomers, born in 1946, will begin turning 65 in 2011 — just 21 months from now — and Uncle Sam’s got no legit way to meet the senior-citizen entitlement obligations that will continue to escalate through 2029. With no legit means to meet the looming entitlement crisis, Uncle Sam will therefore resort to illegitimate ways (including still more inflation) to swindle the old folks out of what they’ve been promised.

“The fundamentals suck,” Michelle Malkin said last September, and no rational person with a minimal understanding of basic economics could disagree that the sucking has only become louder since then. We are looking at an ill-designed house of cards on top of a Ponzi scheme erected over the San Andreas Fault. The question is not whether disaster will result, but when.

When that disaster finally hits — when capital freaks the hell out and the bond market goes sideways — the lone sanctuary of sanity and calm will be Galt’s Gulch.

People who are seriously talking about “Going Galt” are not parroting partisan political rhetoric. They are not engaged in a symbolic “protest” tantrum. They are talking about doing what savvy, affluent people have been doing for many months: Attempting to put their economic assets beyond the reach of government policy.

For people who don’t have seven-figure bank accounts, their primary asset is their earning ability. Ergo, the fellow with a day job at JiffyLube or Aamco is putting in fewer hours there, and more hours working at home as a “shade-tree mechanic,” doing simple repairs on a cash basis for his friends and neighbors. (Call this the “Don’t Ask, Don’t Tell” economy.) And that’s a smart investment of time for many workers, since there are millions of Americans now working full-time jobs who will be unemployed a year from now.

Go with what you know. Invest in yourself. You have skills that have real dollar value. If you’re looking at a 401K or mutual fund that’s worth 40% of what it was worth at Christmas 2005, ask yourself what you could do with what you’ve got left. Think of the long-term picture.

If Professor Navarro is right about the Dow eventually falling to 6,000 — and frankly, I think he’s probably being too optimistic — then the DJIA is currently almost 30% above where it will be when it hits bottom. What would the tax penalty be if you zeroed out your 401K? Less than 30%? And considering the inflationary effects of the Bernanke/Geithner strategy, what would be the real value of that 70% you’d have left in your 401K when the market finally bottoms out? So if you cashed out and bought gold now . . .

Well, I’m not an economics professor or a financial advisor, so pay no attention to the mere speculative hypotheticals of a damn blogger. But if what I’m saying makes more sense to you than what you’re hearing on CNN or reading in the Wall Street Journal, please listen to our good friend, Gunnery Sgt. Hartman.

UPDATE: Dan Riehl is of a similar attitude, while Mary Katharine Ham discusses the idiotic details of the latest idiocy from the Idiot-in-Chief and his idiot henchmen. This ongoing Carnival of Idiocy in D.C. is starting to remind me of that scene in “Blazing Saddles” where Mel Brooks as Gov. LePetomaine says, “I didn’t get a ‘harumph’ out of that guy!”

UPDATE II: Professor William Jacobson and Professor Donald Douglas both have more. Hmmm. When will Professor Cthulhu weigh in on this meme?

UPDATE III: Welcome, Instapundit readers! (See: Rule 1.) Please remember that it’s almost Our Favorite Day of the Week.

P.S.: Be sure to check out MELTDOWN, Professor Thomas Wood’s new bestseller about the financial crash and why Obamanomics won’t work.

January 18, 2009

Corporate greed

One of the stock responses to accusations of bias in the media is for liberals to assert that in fact journalists are lackeys of their greedy right-wing corporate masters:

Jeffrey Immelt, chairman and chief executive officer of NBC parent companyGeneral Electric (GE), is on the board of the Federal Reserve Bank of New York, whose president is Timothy Geithner. . . .
Another member of the board of the New York Fed is Lee C. Bollinger, the president of Columbia University, who serves on the board of the Washington Post Company. . . .

(H/T: Instapundit.)