When Barack Obama entered office, he promised change. Based on what I have seen thus far, I prefer to call him Barack W. Bush. His policies have been eerily similar to the Bush Administration when dealing with the financial crisis. And, the main reason why is his economic team is intricately tied to Wall Street, just as the Bush Administration was. While Bush had the ex-head of Goldman Sachs at the Treasury, Obama has leaned heavily upon two friends of Wall Street. Robert Rubin, the ex-Treasury Secretary under President Clinton and board member of Citigroup, led Obama’s economic transition team. This is the same Rubin who pushed Citi to pursue the profitable Collateralized Debt Securities (CDS).
The other is Larry Summers. It has been released that Summers made millions from Wall Street firms just last year before taking the helm of the Obama economic team. Here is a link to a Wall Street Journal article describing his cozy relationship:
http://online.wsj.com/article/SB123879462053487927.html
Here is the jist:
“Top White House economic adviser Lawrence Summers received about $5.2 million over the past year in compensation from hedge fund D.E. Shaw, and also received hundreds of thousands of dollars in speaking fees from major financial institutions.
A financial disclosure form released by the White House Friday afternoon shows that Mr. Summers made frequent appearances before Wall Street firms including J.P. Morgan, Citigroup, Goldman Sachs and Lehman Brothers. He also received significant income from Harvard University and from investments, the form shows.
In total, Mr. Summers made a total of about 40 speaking appearances to financial sector firms and other places, with fees totaling about $2.77 million. Fees ranged from $10,000 for a Yale University speech to $135,000 for an appearance paid for by Goldman Sachs & Co.
The disclosure — in a financial report that is required for federal office holders — comes as Mr. Summers is involved in shaping the Obama administration’s policy decisions on the financial meltdown as well as the broader recession. Among the many decisions the economic team has wrestled with has been whether to step up regulation of hedge funds, one of the most contentious subjects during a summit of world leaders this week. European nations pushed for tougher rules, while the Obama administration preferred a less stringent approach.”
This helps to explain why we are pouring billions of our dollars into these defunct institutions, and why we shouldn’t expect any real change from this administration.