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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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US immigration reform could improve economy, says conservative thinktank

Category : Business

Analysis ahead of new legislation cites greater birth rate and labour force participation to upend anti-immigration arguments

An overhaul of immigration laws could boost economic growth and cut the federal budget deficit, according to new analysis by a conservative thinktank.

The report by the American Action Forum, published on Tuesday, is part of growing strategy by high-profile conservative groups to deploy economic arguments in the battle for immigration reform.

It challenges the view put forward by some conservatives that immigrants would take jobs from US citizens, drive down wages and would add to the deficit by the need for government assistance.

Legislation on comprehensive immigration reform, including a path to citizenship, by the bipartisan “gang of eight” senators could be available as early as this week, according to senator Chuck Schumer, a Democrat from New York.

Research published on Tuesday by the AAF, cites the greater birth rate, labour force participation and entrepreneurial bent among immigrants compared to native-born Americans as key factors that could raise gross domestic product growth by a percentage point every year over the next decade. In what it acknowledges are “ballpark” estimates, it said: “A benchmark immigration reform would raise the pace of economic growth by nearly a percentage point over the near term, raise GDP per capita by over $1,500 and reduce the cumulative federal deficit by over $2.5tn.”

The analysis, by Douglas Holtz Eakin, an economist and president of the AAF, argues that in the absence of immigration, the population and overall economy would decline as a result of low US birth rates. It argues that immigration reform should be evaluated in economic terms and compares the US unfavourably with the UK, Canada and Australia, countries which focused their immigration reforms on economic growth.

Groups such as Grover Norquist’s Americans for Tax Reform and the Hispanic Leadership Forum, which aired ads in March promoting an immigration overhaul, have been gearing up for the next critical phase of the immigration debate, and some are using similar messages to that of the AAF.

Norquist, in an interview with Politico last week, said: “We’re doing it to make sure … that Republican congressman and senators feel comfortable.”

“They look out and hear the guys on talk radio, and they go: ‘Oh my goodness, everybody out there thinks this. That’s not necessarily where I was, but I guess if everybody thinks that way, I’ll either be quiet or go along, or I’ll listen to them so they can convince me.’ They’re now hearing the other side of the issue.”

In addition to the proposals for immigration reform to be put forward by the “gang of eight” senators, a bipartisan group from the House is working on its own version.

If the Senate and House bills pass their respective chambers, they would have to be reconciled and a final version voted on, before being sent to President Barack Obama for signing into law.

Obama pitches clean-fuel car plan in Chicago but signals retreat on Keystone

Category : Business

President unveils $200m-a-year plan to fund research into clean fuels but advisers suggest Keystone pipeline will be approved

Barack Obama’s grand vision of action on climate change shrank to $200m a year to fund research into clean fuel cars, with signs of retreat on the big environmental issues of the day.

Friday’s initiative – hyped in advance by the White House – marked the first move by Obama to make good on the stirring promises of climate action offered in his inaugural speech and state of the union address.

But on the most immediate environmental decision in his in-tray — the future of the controversial Keystone XL pipeline project – White House officials indicated on Friday that Obama’s green and liberal supporters would be in for a disappointment. Officials signalled that the president was inclined to approve the project.

Meanwhile, there were signs that the Environmental Protection Agency was retreating on a move to curb carbon emissions from new coal-fired power plants.

Like other climate actions now in the works, Friday’s announcement of a $2bn research fund was small-bore, or intended to fly beneath the radar of a Congress still dominated by Republicans hostile to environmental protections.

Earlier on Friday, the president’s economic council, in a report to Congress, called for a switch to cleaner fuels to prevent the worst effects of climate change. Meanwhile, the president’s team of scientific advisers are expected to release a finding on the urgency of acting on climate change.

In a visit to Argonne research labs, outside Chicago, the president called on Congress to support his plan to use revenues from offshore oil and gas drilling to fund research into advanced vehicle technologies.

Obama, in describing the Energy Security Trust, put it squarely in the context of his “all-of-the-above” energy strategy, noting that oil and natural gas drilling had risen during his presidency. He said the development of alternative fuels would help America’s energy security and would protect consumers from gas price spikes.

“Let’s take some of our oil and gas revenues from public lands and put it towards research that will benefit the public so we can support American ingenuity without adding a dime to our deficit,” Obama said. “Let’s set up an Energy Security Trust that helps us free our families and our businesses from painful spikes in gas once and for all.”

The Energy Security Trust, as envisaged by the White House, would raise $2bn over the next decade, or $200m a year, for cutting edge research, which Obama said was under-funded by the private sector.

The White House said the money would help fund research into “breakthrough” technologies, such as advanced batteries for electric cars, or biofuels made from switch grass rather than corn ethanol.

Officials chose Argonne Labs because the facility led research into electric car batteries.

As Obama noted, the fund was first proposed by a non-partisan group of former generals and military executives, called Securing America’s Future Energy. However, the original proposal called for a much larger fund, with some $500m in annual investment.

Obama incorporated the idea into his state of the union address, pitching the trust as part of his plan for job creation, arguing that America needed to retain its technological edge to remain competitive in the global economy. White House officials said the fund would free research labs from Congress, and the uncertainties of appropriation cycles.

Even so, the initiative is on a much more modest scale than campaigners had hoped for during Obama’s second term. The White House has all but conceded that there is no chance of moving a climate law through Congress. Officials have also ruled out the idea of a carbon tax, leaving Obama to focus on relatively small-scale projects like the Energy Security Trust.

Obama’s proposal to use oil and gas revenues to fund research that would get cars off gas was also problematic for environmental groups.

The White House said Obama’s proposal would not open up areas where drilling is currently banned. But they are counting on increased production to spin off additional revenues that could be used to fund research. The government currently collects more than $6bn in oil and gas royalties.

There was virtually no reaction from environmental groups to Obama’s announcement.

Meanwhile, White House officials briefing reporters on the plane gave strong indications that the president is inclined to approve the Keystone XL pipeline – which activists have cast as a test of Obama’s commitment to the environment.

A few dozen protesters from the group, which has led opposition to the Keystone XL pipeline, held a demonstration outside Argonne labs on Friday afternoon.

The official dismissed environmental groups’ contention that building the pipeline would open up vast deposits of the Alberta tar sands, and so increase the emissions that cause climate change. “There have been thousands of miles of pipelines that have been built while President Obama has been in office, and I think the point is, is that it hasn’t necessarily had a significant impact one way or the other on addressing climate change,” the official said.

He added that Obama’s environmental policies would more than make up for any negative impacts from the Keystone XL project. “There’s no question of that.”

Environmental groups were also dismayed by a report in the Washington Post on Friday suggesting that the administration may be backing off from its move to curb emissions from new coal plants.

“We’re now in the fifth year of the Obama administration and industrial carbon pollution remains unregulated,” said Larry Schweiger, president of the National Wildlife Federation.

Obama: $85bn budget cuts mean unemployment will rise

Category : Business

President criticises Republicans’ ‘empty victory’ and tells his first second-term cabinet meeting that tough decisions lie ahead

Barack Obama warned at the first meeting of his second-term cabinet on Monday that the $85bn in forced spending cuts will mean difficult budget decisions in the weeks ahead and that unemployment will end up being higher than it needs to be.

Details of the areas to be cut will be rolled out over the next few weeks, but already the Obama administration is claiming that cancellations in overtime for aviation staff is leading to long queues for travellers. The Pentagon has cancelled the deployment of a carrier group to the Gulf despite continuing tensions with Iran.

With no sign of Republicans looking to compromise on the $85bn sequester and the cuts beginning to take on an air of permanence, the White House described it as “an empty victory” for the Republican party. The Republicans are downplaying the impact of the cuts ordered by Obama on Friday after failure of Republicans and Democrats to look seriously for a deal. They describe the cuts as modest, whereas Obama and the White House are predicting the impact will be severe.

Obama, addressing a cabinet that included new members Treasury secretary Jack Lew and defence secretary Chuck Hagel, said: “Obviously, we’re going to be spending some time talking about the potential impact of the sequester on all the agencies and missions across the board. It is an area of deep concern and I think everybody knows where I stand on this issue. We are going to manage it as best we can, try to minimise the impacts on American families, but it’s not the right way for us to go about deficit reduction.”

The president added: “We’re going to do our best to make sure that our agencies have the support they need to try to make some very difficult decisions, understanding that there are going to be families and communities that are hurt, and that this will slow our growth. It will mean lower employment in the United States than otherwise would have been.”

Earlier, at the daily White House briefing, press spokesman Jay Carney said the cuts hit hard areas the Republicans normally seek to protect, namely the Pentagon and border security.

Carney said he was surprised that Republicans were claiming the $85bn as a win. He hoped that they would come to see it as an “empty victory” and realise that their goals of high defence spending and border protection were not being achieved.

“So not only are regular Americans folks suffering from this, but their objectives are being unmet,” Carney said.

The secretary for homeland security Janet Napolitano, speaking at a Politico meeting, said: “Now that we are having to reduce or eliminate basically overtime both for TSA (Transport Security Administration) and for customs, now that we have instituted a hiring freeze … we will begin today sending out furlough notices.”

She said airports are seeing lines at some airports “150 to 200% as long as we would normally expect.”

Boehner on sequester: ‘I don’t think anyone quite understands’ how it ends

Category : Business

US lawmakers on both sides show little room for negotiating way out of possibly devastating spending cuts that kicked in Friday

Billions of dollars in sequester-induced budget cuts appear set to stay for the time being, with leading political figures in Washington indicating no early resolution to the impasse, as they eye next year’s congressional elections.

John Boehner, the Republican speaker of the House of Representatives, said on Sunday he saw no path to agreement with the president over the $85bn in automatic cuts, about half to military spending, that kicked in on Friday after the two sides failed to agree a package of budget reductions and tax rises to tackle the deficit.

“I don’t think anyone quite understands how it gets resolved,” he said on NBC’s Meet the Press.

Pressed on why he does not agree to the president’s demand to increase revenues by closing tax loopholes, Boehner turned the question around and accused Barack Obama of failing to keep his side of the implicit bargain that higher taxes already agreed should be matched with spending cuts.

“The president got $650bn of higher taxes on the American people on January the first. How much more does he want? When is the president going to address the spending side of this?” said Boehner.

“You can’t tax our way out of this problem. We’ve got to deal with the spending side, just like every American family has to.”

Boehner said he made the same point at a “very frank” but polite meeting with the president on Friday.

Obama emerged from the encounter saying he saw little prospect of an agreement with Republicans in Congress in the near future. The president, apparently with one eye on the 2014 mid-term elections, predicted that it will take public opinion to shift the GOP.

“What I can’t do is force Congress to do the right thing,” he said after the meeting. “The American people may have the capacity to do that.”

Obama suggested that voters, sick of lurching from one financial crisis to another, will pressure their representatives.

“After some reflection, as members of Congress start hearing from constituents who are being negatively impacted … that they step back and say, all right, is there a way for us to move forward on a package of entitlement reforms, tax reform, not raising tax rates, identifying programmes that don’t work, coming up with a plan that’s comprehensive, and that makes sense,” he said.

“It’s going to mean hundreds of thousands of jobs lost. That is real. We’re not making that up. That’s not a scare tactic, that’s a fact.”

The president has said he did not know how long it will take for the cuts to shift the Republican position.

“It may take a couple of weeks. It may take a couple of months,” he said.

Gene Sperling, director of the White House National Economic Council, said Obama called a select group of Republican members of Congress on Saturday who may be more likely to consider “tax reform that raises revenues to lower the deficit”. The president also spoke to Democrats open to tackling entitlement spending long-term.

But the Republican leader in the Senate, Mitch McConnell, said his party will not be backing down and remains committed to $1.2tn in spending cuts over the next decade without increasing taxes.

“I’m absolutely confident we’re going to reduce spending the amount of money we promised the American people we would in a law the president signed a year and a half ago,” he told CNN.

“We said we’re open to discussing how to reconfigure those spending reductions without raising taxes … So far I haven’t heard a single Senate Republican say they would be willing to raise a dime in taxes to turn off the sequester.”

A report in the Washington Post on Sunday suggested that Obama had all but given up on attempts to push for bipartisan solutions to problems in Washington. Instead he was focusing on winning back the House in next year’s mid-term elections to force through his remaining agenda.

But McConnell said he does not think voters will be swayed against Republicans.

“The American people look at this and say: gee, I’ve had to cut my budget more than this – probably on numerous occasions over the last four years because we’ve had such a tepid economy now for four long years,” he said.

Boehner said he did not know what the long term effect of the sequester will be.

“I don’t know whether it’s going to hurt the economy or not. I don’t think anyone quite understands how the sequester is really going to work,” he said.

Still, the Republican leaders kept the door open to further negotiation at least on how the sequester cuts are distributed. They are keen to reduce the impact on the military and shift more of the burden to welfare spending which is already severely hit.

“We’re willing to talk to him (Obama) about reconfiguring the same amount of spending reduction over the next six months,” said McConnell.

Boehner said he did not think the spending crisis would reach the point of a government shutdown later this month, and that Congress will approve the funding to keep federal agencies open after March 27.

“We should not have any talk of a government shutdown so I’m hopeful that the House and Senate will be able to work through this,” he said.

Barack Obama: ‘These cuts are not smart’ – video

Category : Business

The US president makes clear his disappointment that the sequester will go ahead

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Kerry will call on Egypt leaders to reform and unlock IMF cash

Category : Business

US Secretary of State set to urge bickering leaders to end the political chaos that is blocking a large international loan

US Secretary of State John Kerry is calling on Egyptian leaders and opposition politicians to forge a political consensus that will allow the country to emerge from economic crisis. Kerry, who is on his first overseas trip as a member of Barack Obama’s cabinet, was scheduled to meet a number of opposition figures and Egypt’s foreign minister on Saturday. He will see President Mohammed Morsi on Sunday.

US officials said Kerry was particularly concerned that Egypt should make the reforms necessary to qualify for a $4.8bn International Monetary Fund loan package. One official said it was extremely important for the new Egypt for there to be a firm economic foundation, which required reaching agreement with the IMF. To get that Egypt must make reforms, like increasing tax collections and curbing energy subsidies.

Agreement with the IMF would also unlock significant US assistance, including portions of the $1bn that president Obama pledged last April. Getting the IMF deal will also be contingent on an end to the political chaos that has wracked the country since Morsi’s election. Kerry will press for all political players to come to a basic agreement on the country’s direction ahead of parliamentary elections that begin in April, the official said.

Liberal and secular Egyptians have complained that Washington is siding with Morsi’s ruling Muslim Brotherhood. The main opposition group, the National Salvation Front, has said it will boycott the upcoming elections. The US official said Kerry would not tell the front what to do, but would stress that they should participate if they want their ideas and values heard and represented. At the same time, the official said Kerry would impress on Morsi the need for inclusiveness and tolerance.

The visit by the US state secretary was marked by protest on Saturday. In Cairo’s Tahrir Square, a small group of anti-Morsi demonstrators held banners reading: “Kerry – member of the Brotherhood” and “Kerry, you are not welcome here”. The protests in the capital were largely peaceful. However, unrelated demonstrations Saturday in the Nile Delta city of Mansoura saw clashes in which at least one person died. Meanwhile in Port Said, a mob torched a police station, according to security sources.

Egypt has been locked in political crisis for months, amid waves of protests against Morsi that have repeatedly turned into deadly clashes and rioting. The opposition accuses the president and the Brotherhood, from which he hails, of dominating power in Egypt, effectively stepping in to the same role as the ousted autocrat Hosni Mubarak and failing to carry out reforms while seeking to instill a more religiously conservative system. Morsi’s administration and the Brotherhood say their opponents are trying to use street unrest to overturn their rule.

Kerry’s visit to Egypt is the sixth leg of a nine-nation dash through Europe and the Middle East. He will travel next to Saudi Arabia, the United Arab Emirates and Qatar.

Scale of sequestration cuts becomes clear as Obama attacks Republicans

Category : Business

Office of Management and Budget report outlines extent of $85bn cuts triggered by failure to reach deal by Friday deadline

The scale and reach of the sequestration spending cuts that will hit the US has been laid bare by government officials who warn that the order for the cuts, which was signed by president Barack Obama late Friday, would be “deeply destructive” to the economy and national security.

The Office of Management and Budget has compiled an official report on the breakdown of the $85bn cuts package, which was triggered by a failure to reach a broader political consensus on deficit reduction. The document reveals a detailed list of how the cuts will hurt spending at every level of government. It shows that research spending at the Department of Agriculture will be hit by $55m of cuts, while $150m will go from the immigration system at the Department of Homeland Security.

The long list of cuts includes relatively smaller sums – like $1m being lost for a dam project on the Colorado River and $6m cut from the Leaking Underground Storage Tank Trust Fund – to larger budgetary swipes, including $30m being removed from cultural exchange programs at the State Department. The Pentagon faces widespread cuts. It is losing some $2.6bn from its Defense Health Program and $3.4bn dollars from the navy’s operation and maintenance budget. The Army faces losing $4.6bn from its equivalent budget.

The OMB issued a stark analysis of the impact of the cuts in a letter to Congress that was issued with the report and signed by Jeffrey Zients, deputy director for management. “The cuts required by sequestration will be deeply destructive to national security, domestic investments and core government functions,” Zients wrote.

On Saturday, Obama warned of a “ripple effect” through the American economy that would cost hundreds of thousands of jobs. Obama said the sequestration was “not smart”. “The pain will be real,” he said in his weekly address. “Many middle-class families will have their lives disrupted in a significant way.”

He added that up to 750,000 jobs could be lost and a half per cent knocked off America’s economic growth this year. “This will cause a ripple effect across the economy. Businesses will suffer because customers will have less money to spend… These cuts are not smart. They will hurt our economy and cost us jobs.”

The sequester originates in a political crisis in 2011, when debates over deficit reduction almost saw the American government default on its debt payments. In order to avert that crisis Democrats and Republicans agreed that unless they struck a deal on shrinking the country’s debt, cuts would be made to federal spending. The idea was that the prospect of cuts to social services would motivate the Democrats and hurting military spending would do the same for Republicans.

Instead, despite Friday’s deadline no grand bargain was struck and the cuts – which neither side had intended to actually happen – are now coming into force. Over the next 10 years they will represent $1.2tn dollars of slashed spending.

The hardest hit part of the government will be the Pentagon, which must dig out some $40bn of cuts between now and September – about 9% of its budget. Defence chiefs have said that the move will delay deployments, such as a recent move of an aircraft carrier to the Persian Gulf, and hurt national security.

But almost every government department, from aviation to the parks service, will be hit, with cuts amounting to about 5% of overall budgets. Only Medicaid and welfare benefits such as food stamps are exempted. The Federal Aviation Authority has said that it will have to close scores of air traffic control towers and the National Labor Relations Boards has given staff 30 days of notice that they could be suspended from their jobs. Over the next few weeks more and more such letters will go out, threatening school services and the smooth running of scores of other government functions.

In his speech, Obama slammed Republicans as being to blame for inaction, saying that their hostility to any sort of extra tax revenues being generated from rich Americans was the root cause of the problem. In recent weeks, and since his victory over Republican challenger Mitt Romney in last year’s presidential election, Obama has not shied away from attacking his opponents as defenders only of the wealthy.

“It’s happening because Republicans in Congress chose this outcome over closing a single wasteful tax loophole that helps reduce the deficit. Just this week, they decided that protecting special-interest tax breaks for the well-off and well-connected is more important than protecting our military and middle-class families from these cuts,” Obama said.

But Republicans want only cuts, on welfare rather than defence, and have insisted on no new taxes. The Republican House speaker, John Boehner, pictured, was adamant at the end of the White House talks Friday that he would not contemplate any new taxes. “The discussion about revenue is over,” Boehner said. That hard line is popular with his party’s right-wing base but has left the party vulnerable to being attacked as being too entrenched in its ideology – especially after Obama’s resounding election victory.

In seeking to lay the blame for the sequester at the door of the Republicans, the Obama administration has run a carefully orchestrated image campaign aimed at focusing on the impact on middle-class American workers and their families. Obama continued that theme on Saturday, saying Republican leaders were out of touch with ordinary people and their own voters. “We just need Republicans in Congress to catch up with their own party and the rest of the country,” he said.

But on Saturday Republicans were still standing firm. In the party’s own weekly address, the congresswoman Cathy McMorris Rodgers attacked “out-of-control government spending” and said there was no point in new taxes, as the money would just be wasted. “Instead of campaigning for higher taxes, the president should lead an effort to begin addressing our nation’s spending problem,” Rodgers said.

But for many observers the fiasco of the sequestration – which has effectively meant both parties are implementing a policy that neither wants and each thinks is damaging – has left many complaining about a broader American political dysfunction. Yet the sequester is just one of several rolling crises that are threatening the smooth running of the world’s biggest economy that is still stuttering to recover from recession.

If Congress does not reach an agreement on a budget for this year by 27 March, the federal government faces the prospect of shutdown. Soon after that, Congress must approve an increase in the federal debt limit: the same move that two years ago created gridlock in Washington and resulted in the sequester. The House of the Representatives is due to vote next week on a deal to prevent a federal shutdown but there is a risk this could end up in a new stand-off between the Republican-controlled House and the Democratic-controlled Senate.

Congress fails to act on sequester – as it happened

Category : Business

Follow live coverage as lawmakers give speeches ahead of scheduled across-the-board cuts, now less than 40 hours away

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House passes short-term debt ceiling extension but spending cuts still loom

Category : Business

Bill extends the borrowing limit for more than three months, but a longer term solution still needed

The House of Representatives voted on Wednesday to extend the US’s borrowing limit for more than three months as the majority of Republicans backed down from their demands for more spending cuts.

The Republican-sponsored bill still needs a Senate vote and presidential approval but is likely to receive both. Democrats said they would approve the bill without changes shortly before the vote, which passed 285-144 with 86 Democrats voting for the bill to make up for the 33 Republicans who objected.

John Boehner, Republican House speaker, included a provision in the bill that will halt Washington lawmakers’ wages if a budget plan is not passed by April 15. “It’s real simple: no budget, no pay,” said Boehner.

Jay Carney, White House spokesman, called the vote a “welcome development” but said the president would prefer a longer term solution.

The compromise avoids an impending budget crisis that Treasury secretary Timothy Geithner warned would do “irreparable” harm to the US economy. Earlier this month Geithner wrote to Congress warning that the US was close to exhausting the measures put in place to extend its borrowing capacity. The government hit its $16.4tn limit on 31 December 2012. “It must be understood that the nation’s creditworthiness is not a bargaining chip or a hostage that can be taken to advance any political agenda,” warned Geithner.

While the vote addresses immediate concerns, the vote to push off debt ceiling decisions until 18 May will not halt upcoming spending cuts or impending clashes over government spending. On 1 March, $110bn in automatic spending cuts are set to take effect. And on 27 March, a stop-gap measure financing government operations expires.

Republican conservatives are preparing for a fresh battle a the end of March. House members including former vice-presidential hopeful Michelle Bachmann who voted against the bill voiced their concerns after the decision. “Giving the president four months of unlimited borrowing authority without a cap on spending is something I cannot support,” said Bachmann.

“I could not vote for a bill that added $4tn to our national debt over the next 10 years,” said Republican congressman Jimmy Duncan of Tennessee.

Senator Rand Paul, seen as a potential presidential candidate, sharply criticised his Republican colleagues in a speech in South Carolina earlier this week saying they had “retreated” in the face of opposition.

“I saw the speaker on TV handing the newly sworn-in president a flag. I am afraid it was the white flag of surrender,” he told the audience, Politico reported.

Jack Lew, Tim Geithner: the treasury’s new boss, same as the old boss | Charles Ferguson

Category : Business

Geithner helped save the banking system from collapse, but then did nothing to reform it. And Lew himself was a beneficiary

The long-anticipated departure of Tim Geithner and the appointment of his successor, Jacob Lew, has brought much discussion of Geithner’s record, his legacy, and the likely trajectory of the Obama administration treasury department under Lew. In considering this question, I found inspiration in our most profound political philosophers. I refer, of course, to The Who, in the finale of their immortal and highly relevant Won’t Get Fooled Again:

“Meet the new boss
Same as the old boss”

Consider first Geithner’s legacy, first as president of the New York Federal Reserve, then as treasury secretary. (Actually, his tendencies were evident even earlier, when he was carrying Larry Summers’ water during the Asian financial crisis of the late 1990s.) As head of the New York Fed during the bubble, Geithner did – well, not much of anything: no regulation, no warnings, no protests about abuses or excesses, nada, zilch. Geithner was in the audience at Jackson Hole in 2005 when Raghuram Rajan, then the IMF’s chief economist, delivered his now-famous warning about systemically dangerous incentives and risk-taking in the financial sector – a warning that Larry Summers slapped down publicly, and about which Geithner never uttered a public word, then or later.

Then came 2008, when, so far as we can determine, Geithner basically did everything that Hank Paulson told him to, and not much else. In fairness, one must concede that Paulson, Ben Bernanke, and Geithner were effective in preventing utter systemic collapse – albeit a collapse caused in large measure by their own earlier actions and inactions. Geithner continued that pattern, and then firmly established it as his legacy, after he took over at treasury.

But what, precisely, is that pattern?

In sum, it was to be intelligently pragmatic, in preventing acute systemic collapse and then returning the financial system, the political system, and the economy to their status quo. So, on the plus side, the Obama administration did not embrace the suicidal austerity path and laissez-faire preached by some, and practiced in some now-devastated European nations.

Banks and financial markets were propped up by the treasury department and by Federal Reserve purchases of over $2tn in securities; the auto industry was saved (or at least General Motors was); and a second Great Depression was avoided. Not to be assumed – and worthy of serious praise.

But what wasn’t done, and Geithner never even tried to do, is equally telling.

No purge of the senior managements and boards of directors of the financial sector, not even those, such as Citigroup and Bank of America, which were totally dependent on federal support for their existence (Citigroup was nearly 40% owned by Geithner’s department). No curtailment of bonuses, no attempt even to tax them. No breaking up of too-big-to-fail institutions, some of which were and remain so complex that they are, as my colleague Charles Morris has said, too big to succeed. No attempt to curtail the toxic lobbying and revolving-door hiring of those same institutions – once again, including several that would not exist except for federal aid. No attempt to develop an evidentiary record to support criminal prosecution for the massive criminality that accompanied the bubble. No attempt to develop an evidentiary record for asset seizures under Rico, the law routinely used to seize the assets of criminal organizations. No serious attempt to rescue millions of homeowners facing foreclosure, or imprisoned in houses that they will never be able to sell for as much as they owe. No attempt to rein in the deeply entrenched culture and incentives that produce toxic financial “innovations” and increasingly frequent crises. A pattern of hiring truly dreadful people, ranging from Goldman Sachs lobbyists to private equity executives who worked with banks to bet against their own securities.

And so, now we have, indeed, “succeeded” in returning to something roughly like the status quo. What is that status quo?

We have an even more dangerously concentrated, politically even more powerful, still highly corrupt, unproductive financial sector; a clear message sent that even a horrific crisis caused by massive criminality yields no punishment whatsoever; insufficient, weak regulatory laws and institutions; an administration largely managed by people who were, and remain, part of the problem; a massively corrupt political system in which opaque, uncontrolled contributions yielded a $3bn presidential election; and even greater economic inequality than when Obama and Geithner took office.

Tim Geithner, upon returning to private life, will surely be rewarded in the typical ways. Perhaps, he will become a banker. If not, president of a university or thinktank, with consulting arrangements, board memberships, and speechmaking to the financial sector bringing him a living wage of five or ten million a year.

And now we will have Jack Lew. What can we expect of him?

I refer you to The Who’s lyrics. For three years before entering the Obama administration, Lew was a Citigroup executive, and for the last year he was the chief operating officer of Citigroup Alternative Investments, which made some money by betting against mortgage securities, but which lost many billions more when the crisis came. That crisis and those losses did not prevent Lew from receiving a handsome bonus, paid after he had been appointed to his first Obama administration job.

But that isn’t his main problem. His main problem is that he has already demonstrated that he’s willing to be a typical political hack, and to give bankers what they want. In congressional testimony, he actually said, with a straight face, that deregulation had not contributed to the financial crisis.

As The Who have warned us …