Nobel Economist Joseph Stiglitz Calls Out Obama on His Wall Street Ties

Discussion in 'Politics & Religion' started by ByLoSellHi, Apr 21, 2009.

  1. http://www.thedeal.com/dealscape/2009/04/stiglitz_calls_out_obamas_wall.php

    Change is all that will be left in your pocket given enough time.

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    Stiglitz calls out Obama's Wall Street ties

    Published April 17, 2009 at 4:30 PM


    Nobel-winning economist and former Clinton adviser and World Bank chief economist Joseph Stiglitz, in a Bloomberg interview, dismissed the government's continued bailout of the financial services industry on the grounds that some of Obama's advisers are in the pocket of Wall Street.

    The Bloomberg story specifically cites National Economic Council Director Lawrence Summers, who, after leaving Harvard University, was a managing director of hedge fund D.E. Shaw & Co. LP, but it doesn't attribute that to Stiglitz. However, the story fails to list other names. Nonetheless, Stiglitz, in his own words, said:

    "America has had a revolving door. People go from Wall Street to Treasury and back to Wall Street," he said. "Even if there is no quid pro quo, that is not the issue. The issue is the mindset."

    As to what that mindset is exactly, Bloomberg never offers an explanation. And the notion of "being in the pocket" is pretty vague, too. Maybe Stiglitz was referring to Treasury Secretary Timothy Geithner, who has never worked on Wall Street, but many on the left attack him for his ties to Summers and former Treasury Secretary and Goldman, Sachs & Co. co-CEO Robert Rubin.

    Nonetheless, there are a number of administration names that have actually collected a Wall Street paycheck, although only a few of them have anything to do with banks:

    * Steve Rattner, member of Presidential Task Force on the Auto Industry, founded private equity firm the Quadrangle Group LLC;
    * Rahm Emanuel, Obama's chief of staff, before running for the House of Representatives spent some time in Chicago at Wasserstein Perella & Co. and Dresdner Kleinwort Wasserstein working for Bruce Wasserstein, who owns The Deal LLC;
    * Stephanie Cutter, Treasury's top spokesperson, did PR for J.C. Flowers & Co. LLC; and
    * Julius Genachowski, Federal Communications Commission Chairman nominee, founded VC firm Rock Creek Ventures, and he is a special adviser at buyout shop General Atlantic Partners, now General Atlantic LLC.

    There are countless examples of politicians entering finance after leaving public life. Two of the high-profile names: President Bill Clinton, who worked with Ron Burkle's Yucaipa Cos., and Vice President Al Gore, who did some work with venture capital firm Kleiner Perkins Caufield & Byers. And on the GOP side, former Reagan and Bush advisers left Washington for Wall Street including:

    * Frank Carlucci, Reagan's last defense secretary, chaired private equity firm Carlyle Group;
    * David Stockman, a former Reagan administration budget director, founded buyout firm Heartland Industrial PartnersLP;
    * Richard Breeden, former George H.W. Bush Securities and Exchange Commission chairman, formed Breeden Partners, an activist hedge fund

    So it's no big surprise that the Washington-Wall Street shuttle is pretty busy.

    The difference is that the Republicans seem to stay in finance, while the Democrats return to politics when the opportunity arises -- perhaps creating that so-called mindset that Stiglitz mentioned. -- Matthew Wurtzel