Within a Treasury Department audit report released on April 3, we learn – not surprisingly – the review process for government-backed Solyndra loan was rushed thanks to Department of Energy pressure, and the fact the review process itself was undefined.
I’m no international banking financial guru, but this can not be a good sign. The flip side is that other countries – including Japan and the UK – seem to be buying, but at what price?
Secretary Geithner needs sweeping powers to do all kinds of things like take over financial institutions that the government thinks might possibly need taking over. So he needs to move fast … faster than fast. No time to look this deal over … quick. First this on Wednesday
Allowing the Treasury Department to take over a broader range of companies, such as large insurers, investment firms and hedge funds, would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators.
That’s long enough. Now this on Thursday:
The new rules will likely require financial institutions to hold more capital as a buffer against losses and will bolster risk-management standards. All told, the proposals would mean significant expansions of power for the Treasury, Federal Reserve and other regulators.
It isn’t clear which companies would be brought under this umbrella. Administration officials believe they could include banks’ parent companies, insurance conglomerates and certain hedge funds, among others. They said it would depend on a company’s size, leverage, reliance on short-term funding and role in the financial system.
Confused … don’t worry, but don’t dawdle either. Oh … and guess what won’t be regulated. The Democrats favorite cash cow and George Soros money maker … hedge funds.
One area where the U.S. is departing from its European allies is the Obama administration’s approach to hedge funds, private-equity firms and venture-capital funds. Mr. Geithner, in his remarks, said all firms over a certain size should register with the Securities and Exchange Commission and disclose certain information so government officials can determine whether their size or complexity puts the broader economy at risk. But he said the administration doesn’t seek to regulate hedge funds like banks.
So let me get this straight. The one unregulated part of the market, hedge funds, continue unregulated while we pile even more regulation on the regulated. Wait … times up … gotta move fast. More to do.
This is from Thursday’s hearings.
Consumer advocate groups are questioning President Obama’s selection of Neal Wolin as deputy White House counsel for economic affairs. Wolin, who’s position earlier this week was division vice president at The Hartford’s Property and Casualty area, has been very involved with the recent market financial crisis.
The Hartford purchased a small bank in Florida last fall so it could be become eligible for billions in Troubled Asset Relief Program (TARP) funds.
Before joining HIG, Wolin was tied to the Clinton administration for a couple of years, where he was chief legal council at the Treasury Department during a time when the agency was loosening financial regulations.
From the Miami Herald…
Consumer advocacy groups are upset – not just because Wolin was a top executive of a company seeking bailout money, but also because of the regulatory reform Obama promised that includes calls for first-ever federal regulation of the insurance industry.
“It raises questions. He may be a great lawyer, but he has to be walled off from insurance decision-making, and I assume he will be, based on Obama’s statements,” said Robert Hunter, director of insurance for the Consumer Federation of America, a consumer watchdog organization. “If he isn’t, I would be very troubled.” …
Consumer advocates want to know if Wolin will recuse, or distance, himself from any financial matter that affects Hartford.
“That could be an awful lot of stuff,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington (CREW). “It seems like it is very hard for him to both work on economic issues and not work on issues affecting The Hartford. It will be interesting to hear from the administration how they will walk that line.”
Wolin has long-standing ties to the Clinton administration. He was the chief legal counsel from 1999 to 2001 at the Treasury Department, serving under both Secretary Robert Rubin and Secretary Lawrence Summers. Those two men were instrumental in loosening financial regulation, later supported by the Bush administration, that allowed the rapid expansion of unregulated financial products that have come back to haunt the federal government and the global financial system.
Summers now heads Obama’s National Economic Council, and both he and Wolin have Facebook pages on the Internet that link to each other.
Wolin appears to be a late arrival to the Obama team. The Web site www.campaignmoney.com said that Wolin contributed $2,300 to Hillary Clinton’s campaign.
Wolin will take a pretty big pay cut – as many who enter public office do – to work in the new administration.
The Hartford Courant has the local story.
Full disclosure. When I was working at HIG I did meet Neal a couple of times, but I do not think that I worked with him on anything more than meeting planning. I really don’t remember him at all.
Why are liberals are so good at telling other people what to do … but somehow it never applies to them. Charlie Rangle is exhibit A. Latest example … the soon to be Secretary of the Treasury …. The man who will run the IRS … didn’t pay his self employment taxes. The man who worked for the International Monetary Fund said he was confused. The man who will demand you pay your taxes and likely take your home or your business if you don’t … dodged his for years. Outrage.
The second issue involved taxes due while Mr. Geithner worked for the International Monetary Fund between 2001 and 2004. As an employee, Mr. Geithner was technically considered self-employed and was required to pay Social Security and Medicare taxes for himself as both an employer and an employee.
He apparently failed to do so, resulting in Internal Revenue Service audits his last two years at the IMF. As soon as the IRS brought the issue to his attention, he paid the taxes with interest, these people said.
Remember when Biden said this … these guys really tick me off.