Lying on the economy, Part II…

Barack Obama has advising him 3 of the major players in creating the financial sector disaster:  Robert Rubin, Lawrence Summers and Timothy Geithner.

During the Clinton administration, Rubin was Treasury Secretary, Summers was his assistant, and Geithner was an undersecretary. This unholy trio lobbied Clinton and Congress  to ditch the Glass-Steagall Act, which prevented banks from entering into the securities market. They were also part of the group that rammed the Commodity Futures Modernization Act through.

Why does this ancient history matter?  Because banks then engage in credit-default swaps and collateralized-debt obligations -— financial instruments that normal people, and a lot of  regulators,  didn’t really understand.  Even the most straightforward explanations of those items warp your brain.  Suffice it to say that they are gambles, plain and simple.  It may help to know Warren Buffett called  them “financial weapons of mass destruction.”

Banks were then able to use derivatives to make their books look better, buy mass quantities of subprime mortgages, and become “too big to fail” institutions.

Geithner went on to become head of the New York Federal Reserve, where he was instrumental in backing the Paulson bailouts, including the infamous AIG bailout. He is now our Treasury Secretary, while Summers is a key economic adviser.  The pair of them were told in a Feb. 28th memo that the AIG bonuses were coming on March 15.

They’re the authors of the new plan, in which we taxpayers essentially buy back from the banks the very same bad assets the Toxic Trio helped create.

Rubin departs  Citigroup in April, having watched its stock go from $50 a share to under $2 in 2 years, but says he will still make himself available to the Obama administration as an adviser.

Ask your liberal friends if this is the change they voted for.