There was big news out of the U.S. Senate on Monday evening but the major media were not paying much attention. By approving exposed tax cheat Timothy Geithner as President Obama’s Treasury Secretary, the Democratic Party was confirming and advertising itself as the party of Wall Street.
One day earlier, during an appearance on the CBS “Face the Nation” program, Vice President Joe Biden said the Wall Street Banks may need more than the $700 billion they have already been voted. He sounded sympathetic to their cause.
Wall Street control of the Democratic Party may come as a surprise or shock to those who have been led to believe over the years by the liberal media that the Republican Party is the party of fat cats, rich people, and special interests. But the vote count for Geithner, the President of the Federal Reserve Bank of New York, speaks for itself. Of the 60 votes in favor, 50 came from Democrats (including independent Senator Joe Lieberman). Only four Democrats (including independent Bernie Sanders) voted against Geithner.
Wall Street wanted Geithner because he had already been deeply involved in the bailouts of the big banks and had powerful political connections to such groups as the National Committee on U.S.-China Relations, the Group of Thirty, and the Council on Foreign Relations. In short, this former employee of Kissinger Associates was a Wall Street favorite.
But how could Obama, a controversial figure with a revolutionary Marxist background, communist connections, and socialist worldview, emerge as the favorite of Wall Street interests? The short answer is that he is the perfect front man.
As noted, the American people have been conditioned to believe that the Republican Party is the party of the rich. The Democrats are supposed to be representatives of the working man. Obama has to have figured that he can serve Wall Street and socialism at the same time.
The ploy has worked before. Meticulous researcher Antony Sutton’s 1974 book, Wall Street and the Bolshevik Revolution, documented a link between certain banking interests and the Bolshevik cause. In Obama’s case, it is the China connection that is most relevant. Goldman Sachs, his major Wall Street backer, has had an exclusive financial relationship with the Communist government of China which has benefited both China and Goldman Sachs―but not the United States.
Geithner comes out of the same mold as Henry Paulson, Bush’s Treasury Secretary. In fact, they worked together on the Wall Street bailout. Geithner is not the “change” the people voted for, but if the major media conceal the true facts, then Obama and his Wall Street backers may be able to get away with it. It is almost as brilliant a deception as the pork-laden pro-government “stimulus” bill that has been labeled the “The American Recovery and Reinvestment Act.”
While Senate Democrats were Geithner’s main cheerleaders, Republican Senator Orrin Hatch also spoke in favor of the nomination. “I am aware this nominee is not free of controversy,” he deadpanned. He also disclosed that his office had “received many calls from Utahns” upset over the nomination.
Hatch said, however, that he weighed his tax problems with his “impressive education, experience, and intelligence” and “outstanding record,” and concluded that he should be confirmed. He said that Geithner had a role in “crafting the Government’s response to the financial crisis,” as if this were a factor in his favor.
In a late-breaking development, media are now reporting that Mark Patterson, a registered lobbyist for Goldman Sachs until April 11, 2008, is in line to serve as chief of staff to Geithner. Patterson’s lobbying was first reported by the National Journal. Goldman Sachs has received $10 billion in bailout money.
As we revealed in our AIM Report, Wall Street and the Rise of Obama, the new President has been heavily backed by Wall Street interests, especially Goldman Sachs. More recently, Kenneth P. Vogel of Politico.com documented in a story headlined, “Wall Street Invested Heavily in Obama,” that the list of top donors to the political campaigns of Obama, Vice President Joe Biden and Obama chief of staff Rahm Emanuel “includes many firms at the heart of the financial meltdown―including taxpayer-funded bailout beneficiaries Citigroup, JPMorgan Chase and Bank of America…”
He explained, “The top three corporate employers of donors to the new White House came from the world of high finance: Goldman Sachs, Citigroup and JPMorgan. UBS AG, Lehman Brothers, Morgan Stanley, Bank of America, Merrill Lynch and Credit Suisse Group also were among the top 30.Those nine firms’ executives, employees and political action committees have given a combined $5.1 million to the campaigns of Obama, Biden and Emanuel since 1998, when campaign finance records became searchable electronically.”
Vogel noted that Geithner is “one of several appointees for administration economic posts who are protégés of former Clinton Treasury Secretary Robert Rubin, an Obama adviser and, until recently, a Citigroup director.” Another, he noted, is Gary Gensler, a “Rubin acolyte” and former top Goldman Sachs official who has been picked as chairman of the U.S. Commodity Futures Trading Commission.
As Geithner moves to the Treasury Department, William Dudley, another former Goldman Sachs official, has been selected as the new President of the Federal Reserve Bank of New York. Dudley, who has been head of markets at the New York Fed, is described by Bloomberg News as “an architect” of the Federal Reserve’s role in the Wall Street bailout. During some of his time at Goldman Sachs, he was “Bob Rubin’s senior economic adviser,” one bio says. However, his New York Fed bio makes no mention of the Rubin connection.
On the Senate floor, in speaking about Geithner and his history of tax cheating, Republican Senator Jim Inhofe of Oklahoma said, “It is one of those things that makes people so angry about their government. The man who wants to be in charge of the IRS messed up with his taxes and got a pass from the Senate. Now, for as much as we talk about leveling the playing field, it sure looks as if we do not walk the walk.”
Republican Senator Saxby Chambliss of Georgia said, “A week ago today, last Monday, I was coming through the Atlanta airport, and a gentleman walked up to me and introduced himself. He said: ‘I am a retired Internal Revenue Service employee who was going to send you an e-mail today, and you saved me from having to send you that e-mail. During my tenure at the Internal Revenue Service, I was called upon to fire three separate people who committed exactly the same offense as Mr. Geithner committed.’”
Rejecting Democratic claims that Geithner deserved confirmation because he had financial expertise, Republican Senator John Thune of South Dakota said, “There are lots of smart, talented, and experienced people who got us into this economic mess.”
Democratic Senator Robert Byrd of West Virginia said the tax cheating “seriously undermines Mr. Geithner’s credibility to be the Nation’s top tax enforcement officer. It suggests serious negligence on his part and creates the impression of someone trying to game the system. Mr. Geithner showed poor judgment in waiting so long to pay these taxes, and then doing so only because it became a political necessity. Certainly most American taxpayers do not have that luxury.”
Senator Charles Grassley, the top Republican on the Senate Finance Committee, said, “in the past, nominees who had tax issues as serious as this nominee’s, and some who have had less serious issues, have not attained Senate confirmation. I feel it is improper to judge this nominee by a different standard. I realize that economic times are tough right now, but, if anything, that should be an incentive for us to raise our standards and not lower them. Finally, I believe we also need to treat all people in a consistent manner. The same Internal Revenue Code applies to everyone regardless of whether someone is a well-known Wall Streeter or a student earning minimum wage.”
Grassley added, “Many people around the country who have not satisfied their tax obligations have been caught by the IRS, as this nominee was for tax years 2003 and 2004. Many people end up having their houses seized, bank accounts frozen, and other assets taken by the Government to pay their tax debts. Some people even go to jail.”
Senator Jeff Sessions, Republican of Alabama, said, “I believe the American people want a Secretary of the Treasury who was not in the middle of the problem in New York as head of the Federal Reserve Bank when it occurred and who gave no warning to the American people whatsoever that this was about to happen.”
Senator Tom Harkin, Democrat of Iowa, said, “As president of the Federal Reserve Bank of New York, Mr. Geithner was a key regulator of the large, mostly New York-based financial institutions that have been at the center of this meltdown. Their reckless practices—reckless practices—have brought America’s financial system to its knees, pitching our economy into what could be the longest, deepest recession since the Great Depression.”
Senator Susan Collins, Republican of Maine, said, “How can we tell the taxpayers that they are expected to comply fully with our tax laws when these laws have been treated so cavalierly by the person who would lead the Treasury Department and, ultimately, the Internal Revenue Service, when he was applying them to himself?”
The vote on Geithner follows:
YEAS ― 60
NAYS ― 34
NOT VOTING — 4