Wednesday, November 12, 2008
Joe Lieberman Back In The News As A Major Question Mark: Dump Him Or Demote Him, Or Do Nothing?
Posted by ed. dickau at 5:15 PM
Joe Lieberman Back In The News As A Major Question Mark: Dump Him Or Demote Him, Or Do Nothing? It Is Unbelievable How Many Excuses People Can Come Up With For Doing Nothing And Tolerating His Arrogant Bullshit!
Just keep in mind that “Judas Joe” is done in Connecticut in the next election. Not even a “Miracles Of Biblical” proportions can save him. He will probably take Dodd down with him, and what does that tell you the folks of Connecticut will be sending to Washington as replacements. "The Nutmeg State" is going to be a Midterm Elections war zone!
But First!
FROM RALPH LOPEZ:
Here it is, the Cliff Notes version of Vince Bugliosi's "Prosecution
We'll find out this week if the Democratic Party will boot Joe Lieberman from its ranks, and we have a chance to help them make the right decision.
Since losing the Connecticut Democratic primary, Senator Lieberman has threatened to leave our ranks and even joined the Republican Convention to attack Barack Obama in a keynote speech. The long and the short of it is that he is no Democrat. As such, it's high time the Democratic Caucus took appropriate action and stripped him of his committee chairmanship.
Members of the Senate Democratic Steering and Outreach Committee will be deciding if Lieberman keeps his chairmanship this week, so we need to take to the phones and let them know that we want him out of the caucus.
To make phone calls to get rid of Joe Lieberman, go here:
http://tools.advomatic.com/7/kickjoe
Our voices can make a real difference here. The members of the Steering and Outreach Committee know that they can't turn their back on their base. If enough of us take action, we can sway this decision, which may already be leaning our way.
Thank you,
Jane Hamsher, Firedoglake Action
By Andy Bromage
oe Lieberman and Connecticut Democrats have endured a loveless marriage for years, but now the party's filing for divorce.
Three Democrats — George Jepsen of West Hartford, Audrey Blondin of Litchfield and Myrna Watanabe of Harwinton — are circulating a resolution that censures Lieberman for his betrayal of the party, and the Democratic State Central Committee will vote on it next month.
Their logic is simple: Joe's support of McCain/Palin was the final F-You to the party Lieberman's been cheating on for years.
Political analysts get it — the Dems are pissed off — but say removing Lieberman from his committee post would be short-sighted and censuring him would be just "silly."
Lieberman himself met behind closed doors with Senate Majority Leader Harry Reid last week to discuss his future, and emerged to tell reporters he's considering his "options."
Here's what Dems and politics watchers are saying about the Lieberman condundrum:
George Jepsen
Former state Senator, former State Democratic chairman, Ned Lamont campaign chairman
"It's perfectly appropriate for Connecticut Democrats to express their outrage at the way Joe has conducted himself. [Senate Democrats] should take away his chairmanship. Occasionally in politics you need to do the right thing. Why you'd keep someone in a recognized leadership position who just supported McCain/Palin is beyond me. What does it mean to have a party that tries to forge a cohesive set of ideals and move forward when you reward that kind of incredible behavior?"
Audrey Blondin
Former Litchfield Selectwoman
Democratic State Central Committee, District 30
"Joe is no longer a Democrat. He can register Republican, independent, Party of Joe, whatever, but he's making a mockery of the state Democratic Party and somebody needs to say that.
"Absolutely, he should be stripped of the committee chairmanship. How can he retain his leadership position nationally in the Democratic Party? He went in the face of every Democrat across the nation.
"We have to look at our potential loss of influence [if Lieberman is removed], but honestly how many times has Joe been back in the state since he ran for president? He's basically been an absent senator. Connecticut has already lost with this."
Myrna Watanabe
Harwinton Democratic Town Chair
Democratic State Central Committee, District 8
"Joe should be stripped of his chairmanship and basically beyond that, he needs to be ignored. This man was supported by loyal Democrats for what, 20, 30 years? I met people who followed him, who went to New Hampshire and Iowa with him, who supported him before that in all the positions he ran for. He thumbs his nose at all those people.
"Basically, we're impotent. I don't believe we have a recall mechanism. It would be fun, but even if we did, it probably wouldn't fly. Let's put it this way, in terms of talking to people about this [censure] resolution, some people scream and yell and holler, I supported Joe against Ned, I had signs on my lawn, I did this and that, I hate his guts, that miserable S.O.B. But they might not vote to censure him."
Ken Dautrich
Professor of public policy, University of Connecticut
"It's a big mistake if Harry Reid decides to remove Lieberman from his chairmanship. They don't know when they are going to need him. Typically in off years, the president's party loses [seats in Congress] and they could need him to maintain the majority. They should try to appease Lieberman to the extent possible. The smart thing to do is welcome him back. Not an easy thing to do for politicians who just won a victory and have big egos. The time to impose discipline is when Lieberman is up for re-election and pour loads of money into the Democrat's campaign. Don't do it when he's still a force to be reckoned with.
"There's no real detriment to Connecticut if he loses the chairmanship. We're very well represented in the Congressional delegation with [Sen. Chris] Dodd, and even on the House with Rosa [DeLauro] and [John] Larson. They are really influential. I don't think we'll be spared any pork money or any important influence when it comes to military bases.
"The censure resolution is kind of a gotcha thing. You were a bad boy. Now we're going to punish you. It's silliness and reeks of partisan politics and the kind of negativity that really turns voters off. What gets accomplished through a censure vote? What people care about right now is getting the economy going and a whole bunch of policy issues. They will see it as Democrats spanking Joe Lieberman instead of figuring out problems."
Martha Aasen
Former Westport Democratic Town Chair
Democratic State Central Committee, District 26
"Joe Lieberman said a while ago that he'd like to see a Democratic president of the United States and that's not exactly what he's done. He's not only stood behind John McCain figuratively, but physically. Every time you looked there was Joe Lieberman behind John McCain. You don't go out campaigning for the other side. I don't think he deserves to chair the committee he heads up. But you can't kick someone out of the party. He's a registered Democrat in Stamford. What matters in the Senate is where you are in the pecking order and I don't think he's going to walk out of this unscathed."
P.S. If you haven't yet, please also sign out petition to the Senate Democratic Steering and Outreach Committee: http://action.firedoglake.com/page/petition/nomorejoe
Despite his vigorous support of John McCain’s White House bid, Senate Dems last week let Joe Lieberman keep his homeland security chairmanship for the time being, The Hill’s J. Taylor Rushing relates.“Homeland security needs to be . . . devoid ofpartisan politics. As an Independent, Sen. Lieberman is just right for that job,” gather’s Anthony Del Pellegrino weighs in. “Lieberman, as chairman for the last two years, barely used his committee to actually explore domestic security policy,”Washington Monthly’s Steve Benen counters. “Strip Lieberman of the Homeland Security gavel, but give him something else — anything that doesn’t deal with security,” Washington Note’s Steve Clemons counsels.
Feds: The background of prez-elect Barack Obama’s pick to head DHS will reveal a lot about how his nascent administration views the future of the troubled agency, United Press International’s Shaun Waterman surveys. James Lee Witt, “the man that Bill Clinton credited with turning around FEMA, may get a shot at doing the same thing with [DHS],” The Associated Press’ Andrew DeMillo mentions. A veteran Customs inspector arrested in Texas helped traffickers smuggle in about 3,000 pounds of cocaine over five years, The New York Times’ Andrew Becker cites from an indictment. The victim of a 2003 terror strike in Indonesia, has joined the federal government in a role that allows her to help other victims of overseas attacks, TheWashington Post’s Carrie Johnson recounts.
In transition: “This subject is borderline taboo, but I don’t think I was the only one momentarily gripped by terror when Obama walked on to that stage in Chicago” last Tuesday night, Post columnist Anne Applebaum writes — as The Chicago Sun-Times notes the Secret Service barriers now surrounding the prez-elect’s Hyde Park home. “DHS has been preparing for the change in administrations for the past 18 months . . . , naming career employees to fill the No. 2 or No. 3 spots in every division,” NPR’s Pam Fessler spotlights. “The Bush administration had only 30 percent of its national security appointees in place nearly eight months after inauguration. In these times, such a lapse should not be repeated,” Clinton transition chiefWarren Christopher recommends in the Los Angeles Times.
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Bloomberg Federal Reserve Transparency Suit
Bear Stearns Risk Manager to Guard New Henhouse: Caroline Baum
Commentary by Caroline Baum
Nov. 10 (Bloomberg) -- Let’s say you were the chief risk officer of the former Bear Stearns Cos. in the two years preceding the bank’s collapse in March.
And let’s say, just for argument’s sake, that the postmortems revealed Bear to have had too much risk and too little management of it. The only way JPMorgan Chase & Co. would agree to acquire Bear was with a $29 billion sweetener from the Federal Reserve for some of the less-palatable assets.
Following the acquisition of Bear Stearns by JPMorgan, you would expect said chief risk officer to:
a) Retire quietly to his country home;
b) Open a “consulting” business, allowing him to deduct the costs of a home office at the country home;
c) Land a plum job offer from another Wall Street bank;
d) Land a job as a bank supervisor at the Federal Reserve.
If you picked a, b or c, you would be incorrect. The correct answer is d.
Michael Alix, chief risk officer at Bear Stearns from 2006 until its demise in March, was named senior vice president in the Bank Supervision Group of the New York Fed on Oct. 31.
It’s not unusual for Wall Street to reward its own, offering rogue traders -- the ones who escape criminal prosecution -- new jobs at different firms. But the Fed? At a time when its balance sheet is exploding with increasingly risky assets?
Losing a big wad of money is something of a badge of honor on Wall Street, a sign of being a “player.”
Second-Act Poster Boys
Who can forget Howie Rubin, who lost $377 million for Merrill Lynch & Co. in 1987 stripping mortgage-backed securities into IOs and POs (for “interest-only” and “principal-only”). Rubin sold the IOs, stuffed the POs into his desk, according to press reports at that time (apocryphal accounts, according to Michael Lewis in “Liar’s Poker”), and took a bath on the POs when interest rates rose, auguring a slowdown in prepayments.
It was the largest loss on a single trade in history at that time.
Rubin, a graduate of Salomon Brothers’ vaunted arbitrage desk, was fired by Merrill, only to surface a few months later at Bear Stearns Cos., where he built a mortgage-trading powerhouse.
While we’re on the subject of Salomon, John Meriwether is the poster boy for second acts on Wall Street. Long-Term Capital Management lost $4 billion on arbitrage trades in 1998 -- another once-in-a-century event -- necessitating a Fed-orchestrated capital infusion of $3.6 billion from Wall Street’s big banks.
A year later, Meriwether was back, opening JWM Partners with $250 million in capital.
Rogues’ Gallery
Some rogue traders find life after Wall Street, reinventing and retooling themselves for other métiers. Nick Leeson, who brought down Barings Plc, Britain’s oldest bank, in 1995 with a $1.4 billion trading loss, served 3 1/2 years of a 6 1/2 year sentence in a Singapore jail for fraud. He went on to earn a degree in psychology, open a gallery, write two books, join the Galway United football organization, become its chief executive and trade for his own account.
Leeson is also available, for a fee, to share his wisdom on all things financial, not to mention insights into the psychological profile of fellow members of the rogues’ gallery, such as Jerome Kerviel.
Kerviel, you will recall, was a low-level employee at Societe Generale who managed to lose 4.9 billion euros (the equivalent of $7.2 billion at the time) earlier this year on “unauthorized” trades in European stock-index futures.
After a short, pretrial jail stay, Kerviel was hired in April by Lemaire Consultants & Associates, a French firm specializing in computer security.
Inside Information
The parallels to Alix’s employment as a senior adviser in the New York Fed’s Bank Supervisor Group are obvious. Kerviel’s edge, if you can call it that, was his familiarity with back- office risk-management systems, enabling him to evade risk controls.
In other words, if you want a crack IT person, hire a computer hacker. Similarly, if you want to know what shenanigans the banks are up to, hire someone with first-hand experience.
Now, I don’t know Mr. Alix. Neither he nor the New York Fed would comment on his employment, which was bound to raise eyebrows.
“He may have discovered things internally, and no one listened to him,” says Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware in Newark.
In other words, Alix and his team may have done their jobs splendidly, using sophisticated models to predict potential losses. If traders and portfolio managers used pie-in-the-sky prices for complex derivatives or chose to disregard the risk- managers’ advice, the result is what we’re witnessing now.
Employer of Last Resort
Why not avoid the publicity and let Blackrock hire him? Blackrock Financial Management Inc. was retained by the New York Fed to manage the portfolio of Bear Stearns’s former assets.
“Maybe the Fed has better benefits,” Elson says.
Or look at it another way. Wall Street isn’t hiring. The Fed, which has assumed Wall Street’s traditional role of allocating credit, may be the only game in town.
(Caroline Baum, author of “Just What I Said,” is a Bloomberg News columnist. The opinions expressed are her own.)
To contact the writer of this column: Caroline Baum in New York atcabaum@bloomberg.net.
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