Depressing if True

William Greider, writing for The Nation, seems to think that while Republicans have certainly done their best to demonize Elizabeth Warren, there are folks surrounding President Barack Obama who also don't want this candid woman to chair the Consumer Financial Protection Bureau. Greider's information relies on a Very Reliable Source, unnamed, so who can really tell how accurate this is. But based on what I've read about the financial industry and how all those finance guys seem to end up in positions of power around the presidency (including Obama's), I wouldn't be surprised. Here's a quote from Greider:

Tim Geithner, said my Very Reliable Source, really, really doesn’t want Elizabeth Warren in the position where she is sure to be a tough-minded and independent voice on major financial-policy issues. As CFPB director, Warren would also sit on the new “systemic risk” council of regulators who decide very large questions like “too big to fail.” The other regulators can outvote her easily enough, but Warren has an alarming history of personal candor. She says what she thinks, out loud and in public. That naturally disturbs the club members, all of whom have a rank history of making life easier for the big boys of banking.

Warren made her integrity clear when she served as chair of the Congressional Oversight Panel digging into the financial crisis and bailouts. Her investigations turned up alarming facts the bankers and bank regulators wished to avoid. Furthermore, Warren was often dissenting on legislative issues Geithner and team were pushing in the congressional debates on financial reform. Geithner doesn’t tolerate contrary thinkers in his midst; witness the galaxy of Wall Streeters he recruited to run the Treasury department. Geithner is a favorite of the president’s, perhaps because he is absolutely faithful to the financial establishment’s best interests. [William Greider, "Why is Obama Dragging his Heels on Appointing Elizabeth Warren to head CPFB?," The Nation, 27 May 2011.]

I don't know the answer to the question in the title of Greider's article, and I'm no expert. But I've read enough about the economic crisis to know that we can't blame just one political party for all the deregulation that eventually led to the risks that the financial industry took and the financial crisis that ensued. Those at the top seem to cover each other's backs very well. Just sayin'.

David Corn, an editor for Mother Jones and a former editor of The Nation, described the distance between Timothy Geithner and Elizabeth Warren in this article on HuffPost's "Politics Daily," in 2010. Here is a quote from Corn's article: "Elizabeth Warren Vs. Timothy Geithner: A Big Decision for Obama."

As head of the bailout oversight panel, Warren has fiercely called out Geithner and Treasury on a number of fronts: for providing a backdoor bailout to AIG, for botching homeowner relief programs, for failing to get mega-banks to resume lending. Moreover, she's an articulate and thoughtful populist, who applies a Main Street-first perspective toward financial matters and who has been a scourge of credit card companies and banks. Geithner is a member of the Big Finance establishment; he's no crusader.

It would be nice to have an "articulate and thoughtful populist" on one's side.

Lessons Learned about Self-Monitoring?

On Saturday of this past weekend, my husband, son, and I traveled to Franklin, Louisiana, to attend the Franklin Black Bear and Birding Festival. On the banks of Bayou Teche,venders had set up booths of local products and crafts, various conservation groups had prepared displays and games for children in a nearby warehouse, and musicians were scheduled to play for a street dance. We took a pontoon ride into the Bayou Teche Wildlife Refuge managed by the U.S. Fish and Wildlife Service. It was a beautiful day, clear and cool, and on the trip up a canal dug over one hundred years ago for logging, we saw several alligators sunning on the banks as well as several species of egrets. The particular area of the refuge near Franklin that we boated into is closed to motorized vehicles from September 1st to April 15th. That area had just been opened for motorized vehicles, and the gate was open, as the picture at left illustrates.

As we motored slowly down the canal, the U.S. Fish and Wildlife employee steering the boat and directing the tour mentioned that there were no old-growth trees here because the area had been intensively logged at the turn of the last century--that is, from the nineteenth century to the twentieth century. Historical records indicate that from 1890 to 1935, timber companies removed virtually all of the cypress from Louisiana; any old growth remaining was few and far between. The trees one sees now are ones that have regenerated since then. The canal we were traveling on was also left over from the timber industry's work. Canals were dug in the swamps in order to get to the trees and then to drag the trees to waterways where they could be then be floated to timber mills. If you pull up a Google Earth map of Lake Maurepas and Lake Pontchartrain, you can still see straight canals radiating out from the places where cypress had been harvested, dragged into the canals by pullboats, and "cribbed up into booms and pushed like barges" to mills.  [Frank B. Williams: Cypress Lumber King, by Anna C. Burns]

Timber industry supporters today complain about the restrictions on harvesting the cypress that has regenerated since 1935 when Louisiana was just about completely stripped of cypress. But the past history of just about any industry that pulled its resources from the natural world--or just about any industry, for that matter--indicates that industries are unable to monitor themselves. It doesn't matter if it's an industry that harvests the resources of the natural world or the banking conglomerates that sell derivatives.  Management and employees live high on the proceeds until they have exhausted the resources that provide those proceeds--or until the financial enterprise threatens to go bankrupt and take the country down with it and is bailed out by the government. Frank Williams "celebrated his fiftieth year in the lumber business by distributing $100,000 in bonuses among his employees" [Burns]. A few short years later, the cypress industry had exhausted its resources. Other timber industries began liquidating their assets in the 1910s, but the company that Frank Williams established managed to branch out into oil and real estate and thus operates to this day.

In 2006, Goldman Sachs paid "its employees a total of $16.5 billion in compensation," bonuses that, if distributed evenly, would mean "$623,418 for every" one of its 26,467 employees. ["The Goldman Sachs Premium," by DealBook, 18 December 2006] By 2008, it was clear that Goldman Sachs and other financial industries had almost brought the U.S.--and the world--to financial disaster. Millions of Americans have yet to recover. But taxpayers bailed out the financial industry, and those "titans" got to keep their bonuses.

But have we learned this lesson: that industries must be vigilantly regulated for the health,  safety, and welfare of not only ordinary people but the planet? It seems that a lot of us haven't. More on that in another post.

More on the logging of cypress in Louisiana:
Jacobs, David. "Logging Off." Baton Rouge Business Report. BusinessReport.com. 10 September 2007. http://www.businessreport.com/news/2007/sep/10/logging

Cypress Logging in Louisiana, circa 1925 (Part 1 of 2)   YouTube. Archival footage provided by Krantz Recovered Woods, Austin, TX. http://youtu.be/HF3-0NISvs4

Cypress Logging in Louisiana, circa 1925 (Part 2 of 2). YouTube. Archival footage provided by Krantz Recovered Woods, Austin, TX. http://youtu.be/FxSP08zJ5tE