Please don’t tell me that these reports
in the business press touting Sallie Krawcheck as a front-runner for
chairman of the SEC or even a possible candidate to be the next Treasury
secretary are true. Who is she? Oh, just another former Citigroup CFO,
and therefore a prime participant in the great banking hustle that has
savaged the world’s economy. Krawcheck was paid $11 million in 2005
while her bank contributed to the toxic mortgage crisis that would cost
millions their jobs and homes.
Sallie Krawcheck. (AP/Mark Lennihan)
Not that you would know that sordid history
from reading the recent glowing references to Krawcheck in the New York
Times, the Wall Street Journal and Bloomberg News that stress her
pioneering role as a leading female banker—a working mother no less—but
manage to avoid her role in a bank that led the way in destroying the
lives of so many women, men and their children. Nor did her financial
finagling end with Citigroup, as Krawcheck added a troubling stint in
the leadership at Merrill Lynch and Bank of America to her résumé.
A woman who would be an excellent choice as
the most experienced as well as principled candidate to head the SEC or
Treasury is Sheila Bair, former head of the FDIC, who labored to
protect consumers rather than undermine them. Indeed, her outstanding
book “Bull by the Horns,” chronicling her fight in the last two
administrations to hold the banksters accountable, should be required
reading for the president and those who are advising him on selecting
his new economic team.
The SEC is supposed to supervise the banks
rather than abet them in their chicanery. And although the Treasury
Department has been a captive of Wall Street lobbyists for most of the
modern era, one would expect something better from the second coming of
Barack Obama. Those are key appointments in determining whether the
president can turn around the still-moribund economy by channeling the
spirit of Franklin D. Roosevelt. Or will he
continue
to plod along on the course set by George W. Bush, bailing out the
banks while ignoring beleaguered homeowners and the many other victims
of this banking-engineered crisis?
Obama was given a pass on the economy by
voters only because Mitt Romney was an even more craven enabler of Wall
Street greed. But the outlines of the Bush Wall Street payoff remain in
place, with the Federal Reserve continuing to bail out the banks with
virtually free
money
and the purchase of $40 billion in toxic mortgage-based bonds every
month to add to the more than trillion dollars in that junk that the Fed
previously had taken off the banks’ books.
The money printing by the Fed is at the
heart of the massive debt crisis. But it has been great for the bankers,
with compensation at the 32 largest banks slated to hit an all-time
high of $207 billion this year, according to a Wall Street Journal
estimate. This reward for ripping off the public is almost three times
the amount the federal government spends on education. Once again the
bankers are blessed for their failures, receiving such wildly excessive
compensation despite the fact that banking revenue is down 7.2 percent
over the last two years.
A prime example is Krawcheck’s old bank,
Citigroup, whose new CEO this week announced that the company has been
forced to engage in a major retrenchment, eliminating 11,000 jobs and
closing 84 branches. The bank has been deeply troubled ever since the
housing meltdown it helped trigger first began, and it was saved from
bankruptcy
only by a direct infusion of $45 billion in taxpayer money and a
commitment of an additional $300 billion in underwriting of Citigroup’s
bad paper.
The ugly tale of America’s Great Recession
is inextricably entwined with the deplorable practices of Citigroup, the
too-big-to-fail bank made legal by Bill Clinton’s signing off on
reversing the Glass-Steagall law that prevented the merger of investment
and commercial banks. The first beneficiary of the revised law was the
newly created Citigroup, saved from bankruptcy a decade later by the
taxpayers.
I shouldn’t be surprised that Krawcheck
would be considered a viable nominee for a central position in managing
our economy. After all, her colleague in the top ranks at Citigroup
during the years of financial depravity, Robert Rubin, is considered a
significant adviser to the Obama administration, and his protégés, led
by Treasury Secretary Timothy Geithner, are still directing policy. It
was Rubin who pushed through the reversal of Glass-Steagall, an act of
betrayal of the public interest that was rewarded with obscene amounts
of money when he ultimately took the job of leading the bank he made
legal.
The very fact that these folks remain
influential, as witnessed by Krawcheck being considered to head the SEC
rather than being the subject of one of its much-needed investigations,
gives further evidence of the enduring but ultimately terminal illness
of crony capitalism.
© 2012 TruthDig.com
Robert Scheer is editor of
Truthdig.com and a regular columnist for The San Francisco Chronicle.
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