In what is becoming a major case of he said, she said, Fed Chairman Ben Bernanke today denied reports that he bullied Bank of America CEO Ken Lewis into the ill-advised purchase of Merrill Lynch:
http://news.yahoo.com/s/ap/us_bernanke
This is interesting in that former Treasury Secretary Hank Paulson admitted under subpoena in December that he was pressured by Bernanke to deliver the threat to Lewis. This is what Bernanke had to say about that:
"I did not tell Bank of America's management that the Federal Reserve would take action against the board or management" if they decided to invoke a clause in the acquisition contract in an attempt to stop the deal, Bernanke told the House Oversight and Government Reform Committee. "Moreover, I did not instruct anyone to indicate to Bank of America that the Federal Reserve would take any particular action under those circumstances."
The problem is, Paulson's account jives with Lewis's, and Bernanke is the odd man out. Why it matters is that there could eventually be criminal charges if it is determined that the public was purposely misled about the condition of Merrill Lynch.
This is starting to get good.
you're like a bad version of Gawker. where does Bernanke "call Paulson a lair"? please stop this nonsense.
The last quote was indirectly calling Paulson a liar, "Moreover, I did not instruct anyone to indicate to Bank of America that the Federal Reserve would take any particular action under those circumstances."
Paulson said he was pressured by double B to threaten Lewis. Today, BB said he didn't instruct anyone Paulson to indicate to BofA lewis that the Fed would take any particular action [fuck BofA] under those circumstances [killing the deal].
For fuck's sake, inform yourself before you post.
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Does anybody think this will contribute to serious aversion to appointing former Wall Streeters to federal posts (beyond that caused by the public's overall aversion to financiers)? What about new standards for resolving conflicts of interest (ie - putting assets into blind trusts, having to be x years removed from jobs, etc.)?
Obama's done a nice job surrounding himself with people from high finance, namely Rahm Emanuel and Larry Summers. I'd say that because so many of our nation's best are attracted to finance, there's no way to shut out bankers from federal posts while still tapping the best as our leaders. Nobody can convince me that Paulson, among other motives, wasn't looking out for Goldman Sachs, so how do you really establish impartiality?
I'd say this is just another reminder that the impossibility of impartiality is a negative externality inherent to democracy. There's too much 'rent' and deadweight loss in our government.
Wow...you sound like the white haired old guy from the second matrix
Are you serious? The people running our country are FAR from the brightest. They are just the wealthiest and most powerful families. Yes Bernanke is a very intelligent man, looking at his credentials, but do you really think he sets the policies on his own for the best interest of the country? And do you really think Obama was simply democratically chosen to be the president? The bankers (the Fed) really run the country. They have since 1913. The bankers have always corrupted Washington. Why do you think the Fed is so opposed to being audited (HR 1207). They have a lot to hide.
You lost me with all the big words, but were you actually agreeing with me???
You can understand my confusion.
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I definitely agree with you on the interesting part.
My point was simply that all of this government involvement in the economy - banks especially - is confounded by former bankers being in the government, especially those from GS. We can't really be certain if there're acting in our best interest. But we can't rule out having bankers as policy makers because so many of the brightest gravitate to finance.
I haven't read much on the BoA/ML negotiations, but every summary and account I've heard about Lehman shows it was an extremely political and personal process; both Bernanke and Paulson have had waaaaay too much subjectivity about who lives, who dies, and who gets what. The BoA/ML situation is fishy, and I don't think there is one among Bernanke, Paulson, and Lewis with clean hands; my hunch is that the difference between Lehman going under and ML being saved was whatever was on Goldman's books that day.
I was supportive of the initial efforts to support banks and distressed companies, but now I think we should let nature take it's course and allow weak businesses to fail, no matter how big. If something is too big to fail, it's too big. You tell the banks that they're all screwed and likewise for the companies they finance, and I guarantee you'll start seeing creative, efficient, private solutions that don't burden the taxpayer.
http://www.forbes.com/2009/06/25/bernanke-bofa-merrill-business-washing…
Forbes explicitly saying "someone's lying", either Paulson or Bernanke
My god yesman, drive down to the 7-11 and get a big gulp of kool-aid?
There's nothing "inherent" about impossibility of impartiality to democracy as a political system. What's the alternative form of government that is less susceptible to that?
Ultimately this whole thing is going to be a wash - if either Bernanke or Paulson see anything more than a slap on the wrist, I'd be pretty shocked.
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