On Monday, Treasury Secretary Henry Paulson and President George Bush announced they would be committing $20 billion in capital and guaranteeing a record $306 billion in risky assets now belonging to CitiGroup, at one time the world's largest and most profitable financial institution. Meanwhile, Obama announced the twin towers of his economic team, Tim Geithner, current head of the New York Federal Reserve, and Larry Summers, former Treasury Secretary under Clinton, to head-up the Treasury and the White House National Economic Council respectively. In our interview with Timothy Canova, Timothy provides a historical analysis of Geithner and, in particular, Summers. He believes that a great deal of the current economic crisis can be put on Summers for his role as Treasury Secretary in the deregulation of the derivatives market, and Geithner for the refusal to re-regulate that market, and in doing so allowing it to grow to unthinkable proportions. He ends by noting that neither Summers nor Geithner have admitted openly that their actions and commitment to deregulation were wrong, something that Alan Greenspan did in a congressional hearing just last month.
BioTimothy Canova is the Associate Dean for Academic Affairs and Betty Hutton Williams Professor of International Economic Law at Chapman University. His research covers the disciplines of law, public finance, and economic history. He has a history of critical writing regarding the deregulation of banking and finance since the 1980s. He has analyzed the meltdown of Continental Illinois, at the time the largest bank failure in American history, and anticipated the collapse of the savings & loan industry. Before the Asian economic crisis began, he was arguing against the liberalization of capital accounts, and then warned of a crisis in the bubble economy. He is a long-time advocate for well regulated financial markets, accountability and the rule of law in central banking. Comments from Registered Members | (Register or log in to make your comment.) | robsethsmith 2008-11-30
"Black helicopter Crowd" - lol - I like that... | Scary Flannels 2008-11-26
Dear ma'am or sir, clearly you did not get my point, although I admit I may have made it in an unnecessarily inflammatory way. I don't support
the "neo-liberalism lite" economics of the Obama team
and I don't support the taxpayer sinkhole that is the bailout as currently structured. (Rather, I prefer that the failed banks be turned into public utilities, owned by the citizens, managed by tri-partite committees composed of commmunity and labor representations, making loans for environmental remediation and post-carbon transition, etc. What I object to is not criticism of Obamanomics, nor criticism of TARP, but rather resorting to lunatic goldbuggery or conspiracy crankery in so doing. And mind you, I don't get any of my news from the corporate networks since I live overseas and don't even have a TV in my apartment. | jpsyst 2008-11-26
So anyone that doesn't like Obama is a "right-wing populists and conspiracy cranks."???
"If this is the leading oppositional force to untamed speculative capitalism, then we're well on our way to a homegrown version of Amerikkkan fascism, courtesy of the Ron Paul gun nuts (although of course they will delusionally insist that they are staunch opponents of totalitarianism)."
Loser. Because anyone that denies the "Change" theme of Obama *has* to be a Ron Paul "gun nut" or "right-wing populist" rather than an informed voter that doesn't get their info from YouTube, MTV, VH1, MSNBC, Fox, or CNN.
It works both ways against McCain. Just because you're comfortable watching stupid videos on YouTube or spending your life away @ Walmart doesn't mean that anyone who doesn't want that lifestyle is a "conspiracy crank" that will lead to "Amerikkkan fascism".
| Scary Flannels 2008-11-26
Heaven help us. TRNN runs an intelligent, credible report on the structural power of deregulated finance capital in overripe American capitalism, and in response receives a hail of "amens" from a smattering
of right-wing populists and conspiracy cranks. If this is the leading oppositional force to untamed speculative capitalism, then we're well on our way
to a homegrown version of Amerikkkan fascism, courtesy
of the Ron Paul gun nuts (although of course they will delusionally insist that they are staunch opponents of totalitarianism). My only comfort is that comments sections typically overamplify the voices of the black helicopter crowd. | SassyFrassy 2008-11-26
NOW THE BAILOUT which gives all businesses a blank check to engage in every conceiveable irresponsible business manner knowing the public will be forced to pick up the tab when the company runs out of money.
This will bankrupt our Nation, people and we will wind up like CUBA.
Guess the DEMOCRATS are not the bargain they wanted everyone to think they are.
| SassyFrassy 2008-11-26
SO here we have it DEMOCRATS BROUGHT ON 911 AND CAUSED OUR MELTDOWN thru their FAULTY LENDING PRACTICES and now are once again all for this FLEECING OF AMERICA thru this bailout bandwagon!
Just found out days ago that this bailout will derail the economy by encouraging businesses to engage in the same kind of IRRESPONSIBLE risky business practices knowing full well that when the irresponsible business practices are overdrawn the PUBLIC WILL once again be left PAYING FOR IT.
WANT TO KNOW what happened to all those SO CALLED ACORN AND DEMOCRATS properties they claimed they wanted? WELL THEY ARE ALL BOARDED UP. MEANTIME our economy is still reeling from the effects of the DEMOCRATS CONSTANT IRRESPONSIBLE ACTIVITIES.
NOW THE BAILOUT which gives all businesses a blank check to engage in every conceiveable irresponsible business manner knowing the public will be forced to pick up the tab when the company runs out of money.
This will bankrupt our Nation, people and we will wind | SassyFrassy 2008-11-26
9 years ago???this one is priceless and worth the read- right out of New York Times
September 30, 1999
Fannie Mae Eases Credit To Aid Mortgage Lending by steven A Holmes where the DEMOCRATS admitted that faulty lending pracitces along with ACORN activities have brought use to the crossroads our Nation is today.
HERE IS WHAT BILL CLINTON HAS TO SAY:
Bill Clinton knows who is responsible for this NATIONAL CRISIS!
PRESIDENT BILL CLINTON: “I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.”
ANNCR: You’re right, Mr. President. It didn’t have to happen | SassyFrassy 2008-11-26
THE MELTDOWN AND THE FLEECING OF AMERICA
Comment: LET'S TALK ECONOMICS--and what has led to our "meltdown"
prior to 911 when DEMOCRATS WERE IN OFFICE the Usa sent our law enforcement to Yeman to arrest Osama bin laden. The Yeman ambassador promptly got into a 'turf battle" with USA law enforcement to claim the USA LAW ENFORCEMENT was "infringing" on YEMAN ambassadors "turf".
So what happened OUR USA LAW ENFORCEMENTS WERE TOLD by DEMOCRATS--to go home empty handed. The DEMOCRAT Administration didn't know at the time their irresponsible actions had paved the way for terriorist to make plans and lay groundwork for 911.
The Wall Street journal at that time printed a small article on it and to the recent it has been discussed but apparantly NOT ENOUGH.
| SassyFrassy 2008-11-26
here is what the ACLU THINKS how stupid AMERICAN'S ARE SPELLED OUT BY NORMAN THOMAS ONE OF THE FOUNDER'S OF THE ACLU
quote American's will never knowingly accept Socialism but under 'liberalism' accept every fragment of the Socialistic agenda; until one day they wake up in a Socialist nation and "wonder" how it all happened. by norman thomas one of the founders of the ACLU.
We need as a nation to make sure we legally and legislatively never leave WASH DC alone until everyone of our freedoms are iron-clad protected.
What we need to investigate is how the DEMOCRATS can count on the USA continuing to be as "stupid as the ACLU THINKS AMEIRCANS ARE' so that the ACLU and DEMOCRATS can further their communistic/socialist/marxist agenda.
feel free to cut paste and comment please
| bugilt 2008-11-25
Maybe he meant a new pair of undies.
Early in the Obama campaign I remember Obama saying we all have to contribute to this change. I only see change in the public relations department being something of change that will help. Transparency starts when you are open to the public. | Uhlinger 2008-11-25
I'd say pwmackay pretty much has it. Only an organized kabbal could be pulling off such things as 9/11, the great transfer of wealth to the richest, the obvious control of our so-called elected officials, and the domination of the media. I remember one poor guy from the National Review saying on one of the Sunday morning shows that there was good evidence it's always been a plutocracy. That was 20 years ago, and I'm sure he never made it to television again. By fomenting choas, controlling the media, and taking advantaging of our own human weaknesses and frailties, they effectively control what goes on and how this country is run. But sometimes we give them a run for their money. | Shaynes14 2008-11-25
THANK you TRNN for showing making this evident.
Ive already passed this video to over 50 of my friends. | pwmackay 2008-11-25
Come on guys....you know there will be no change. He's just another puppet to make the dumbed down population think things will get better while the NWO, the Bilderbergers, CFR etc etc etc continue to control the game. It's about time you guys tackled the truth at the top of the pyramid or you are in reality effectively doing little more than the commercial media controlled by them.
| robsethsmith 2008-11-25
At last! TRNN is waking up to what people like Webster Tarpley have been saying for around a year about Obama and what he REALLY stands for. Rewarding the same old faces for the same failing and tired old policies - 'CHANGE!' - what change? You should interview Tarpley on TRNN, he was warning about the derivatives meltdown way before anyone else on the fringes of the mainstream media... But I'm GLAD you are finally focusing on this Obama scandal! |
Why I support the REAL News (a short message from a supporter)DANNY SCHECHTER, FOUNDER, MEDIACHANNEL.ORG: We have a need to play a role in our world; we have a need to know about our world. And we're not being treated respectfully; we're being treated as if we're a bunch of dummies. A global perspective which has a diverse group of contributors around the world, that's going to be great, exciting television.Obamanomics unveiledVOICEOVER: Markets rallied on Monday after President Bush and Treasury Secretary Paulson announced that they would be committing $20 billion in capital and guaranteeing a record $300 billion in risky assets in order to bail out ailing banking giant Citigroup. On the same day, Barack Obama confirmed the appointments of Tim Geithner to be his Treasury secretary and Larry Summers to head up his National Economic Council when he takes office in January. The Real News spoke to Timothy Canova, writer and professor of economic law at Chapman University in California, in order to get his reaction to the appointments.TIMOTHY CANOVA, INTERNATIONAL ECONOMIC LAW, CHAPMAN UNIVERSITY: Timothy Geithner has been the president of the New York Federal Reserve Bank for the past couple of years. Prior to that, he had been at the International Monetary Fund for a little while, and prior to that, he had been a Treasury Department career bureaucrat. He had been mentored by Larry Summers, who was just appointed by president-elect Obama to be the chair of the National Economic Council. And, in fact, Larry Summers and Robert Rubin and Alan Greenspan were, you could say, three of a kind. In fact, I have here the Time Magazine issue of the three of them on the "committee to save the world." That's troubling, and it is ironic. I mean, these are figures who—Larry Summers in particular, Timothy Geithner a bit less so—who had really been involved in creating a lot of the conditions that led to this financial crisis, and failures being rewarded in many ways right now. I'd say among the most significant things that occurred in the late 1990s happened while Robert Rubin was Treasury secretary, and then his transition to Larry Summers becoming Bill Clinton's Treasury secretary. And during that period of time, the Glass-Steagall Act had been swept away. The Glass-Steagall Act had been passed in the 1930s to keep commercial banks out of the casino economy, out of Wall Street. Then, a year later, in December 2000, while Larry Summers was the Treasury secretary, the Clinton administration deregulated derivatives. Derivatives have now become a major part of this financial crisis that we're in. The size of the derivatives market is mind boggling. And while it sounds great to have insurance—everyone [inaudible] insurance on their own home, for instance—these insurance contracts have become so enormous and they've become tradable [inaudible] that essentially they've become gigantic wagers on the movement of stocks, on bonds, on interest rates, on exchange rates. The size of the credit default swap market alone has been estimated at between $50 trillion and $80 trillion in face value. Then, of course, there are exchange rate and interest rate derivatives which are in the many hundreds of trillions of dollars in face value.INTERVIEWER: See, those numbers are just getting out of the realm of reason. They just don't seem to have any connection to reality, like, a number like $100 trillion. That's bigger than the world economy.CANOVA: That is right. And what made it possible was that, December 2000, Bill Clinton signed away the derivatives market and allowed it to remain deregulated. There's so much uncertainty, not just in the marketplace but among policymakers, that the longer we wait to impose some type of regulation, not for the sake of regulation but for the sake of bringing some kind of transparency to the financial system, I think we're in for a long, tough ride.INTERVIEWER: In Obama's speech today, when he introduced his team, he talked quite a bit about moving in a new direction and reforming the financial system.~~~Courtesy: CNNSEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I've sought leaders who could offer both sound judgment and fresh thinking, both a depth of experience and a wealth of bold new ideas.~~~But it appears that he's tapped the architects of the system to do this. Alan Greenspan admitted recently that there was a flaw in his model.~~~House Oversight Committee HearingOctober 23, 2008REP. HENRY WAXMAN (D-CA), CHAIRMAN, HOUSE OVERSIGHT COMMITTEE: You found a flaw in the reality—.ALAN GREENSPAN, FORMER CHAIRMAN, US FEDERAL RESERVE: A flaw in the model that I perceived as the critical functioning structure that defines how the world works, so to speak.WAXMAN: In other words, you found that your view of the world, your ideology, was not right, it was not working. GREENSPAN: Precisely. No, that's precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.~~~Is there any evidence to believe that Summers and Geithner have made similar updates to their models and to their ideas?CANOVA: Well, Larry Summers [inaudible] The Financial Times of London about the need for a fiscal stimulus. However, there's been no mea culpa, no admission of wrongdoing on his part, as far as the role, the very significant role he played in deregulating derivatives, in sweeping aside the Glass-Steagall Act. The whole idea that these appointments, Larry Summers and Timothy Geithner in particular, are necessitated because they both have experience—it seems a little overblown to make that argument. I mean, there are a lot of other good economists out there who were not implicated in all of this deregulation during the 1990s and the past decade who have plenty of experience, and one name that comes to mind right away is Joseph Stiglits. He was the chair of the Council of Economic Advisors under Bill Clinton, he was the chief economist at the World Bank, and he happens to have a Nobel laureate in economics. There's no shortage of very top quality people that have experience that could have been selected. Selecting these two particular figures is somewhat problematic, and I think they both have their work cut out for them.DISCLAIMER:Please note that TRNN transcripts are typed from a recording of the program; The Real News Network cannot guarantee their complete accuracy. |
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