Obama's Economic Team
Essay by people • May 12, 2011 • Research Paper • 1,495 Words (6 Pages) • 2,087 Views
Introduction
The 2008 market collapse has caused much grief in the past few years. Families are
having their homes foreclosed, people are losing their jobs right and left, and the financial
markets are unstable. Much of the blame for this catastrophe belongs to banks that earned
billions of dollars in profits producing and selling financial investments that nosedived along
with the housing market, Wagering on securities fixed to the housing market violated the law by
misleading clients who bought these junk securities known as "collateralized debt obligations"
Investors were buying into these toxic items without knowing the firm who sold them the CDO's
would benefit if they fell in value. Credit rating agencies such as Moody's Investors Service
and Standard & Poor's manipulated the credit ratings of these mortgage-backed securities
because of the bank industry's pressure. Since the bank industry pay the credit rating firms for
their ratings, there was competitive pressure to place a high rating on a product the bank industry
was pushing. Due to this conflict of interest, credit rating agencies were issuing the best rating
called a Triple-A rating on these securities imminent of disaster. These unregulated activities
were misleading to the United States Government and to their customers. When the floor gave
out from under these mortgage backed securities, the American taxpayer was left to bail out the
same banks, insurance companies and investment firms that were responsible for the whole
mess.
Now that we know how the crash happened, a big issue is who is in charge of national
economic policy now? Who did President Obama appoint differently so that something like
this is less likely to happen again? The answer: Not as much as you think. Some of the same
people who were asleep at the wheel then are still holding the reins of power. There is another
important factor such as previous employment when it comes to economic political appointees,
whether it be from a financial institution or a education institution. In the documentary film
"Inside Job" by Charles Ferguson, Robert Gnaizda describes President Barack Obama's
administration "a Wall Street government." To explain the veracity of this statement, one must
examine background and credentials of the important figures within the Obama administration.
Obama's Economic Team
Ben Bernanke is currently serving a second term as Chairman of the Federal Reserve after being
reappointed by Barack Obama in early 2010. He has been Chairman of the Fed since 2006 under
the Bush administration. Prior to his leadership days at the Federal Reserve, he was the Chair of
the Economics Department at Princeton University from 1996 to 2002. The Federal Reserve is in
control of monetary policy and banking regulation and supervision within the nation.
(Federal Reserve, 2011)
William C. Dudley is the president and chief executive officer of the Federal Reserve
Bank of New York after replacing Timothy F. Geithner who was sworn in as Secretary of the
Treasury in January 2009. (Federal Reserve Bank, 2009) Dudley was the
chief economist at Goldman Sachs for 10 years. He served under the Clinton administration as
Assistant Secretary of the Treasury from 1997-1999 and then Undersecretary Treasury from
1999-2001. (Council on Foreign Relations,2009)
Timothy Geithner is currently Secretary of the Treasury after a nomination by
President Obama and confirmation by the Senate in early 2009. Geithner has had an unusual rise
to power, coming mainly from foreign affairs. Unlike many of his contemporaries, he does not
have a doctorate in economics nor an M.B.A. , only a master's degree in international economics
from Johns Hopkins. (Benen, 2008)
He was the ninth president and chief executive officer of the NY Federal Reserve Bank since
2003. Though he has been mistakenly been identified as a Goldman Sachs employee, he has
never been under their employ. (Sorkin, 2010)
Rahm Emanuel was Obama's Former Chief of Staff from 2008 to 2010. His
connections stem back to Goldman Sachs while being chief fundraiser for Clinton's
1992 reelection campaign, in which he raised over a hundred thousand dollars from
Goldman Sachs. Later on during his congressional races, he would receive almost
seventy-five thousand dollars from them. Later on, Emanuel would work with former Goldman
Sachs CEO Henry Paulson to bail out the familiar investment and securities firm. (Carney, 2008)
Gary Gensler worked for the Bush Administration as Assistant Secretary of the
Treasury from 1997 till 1999, then promoted to Undersecretary of the Treasury from 1999 to
2001. Formerly under the employ of Goldman Sachs, as Partner and Co-head of Finance. Now
he is the Commissioner of the Commodity Futures Trading
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