http://www.bloomberg.com/apps/news?pid=20601087&sid=atJMmClVjevU
Paulson Bank Rescue Proposal Is `Crazy,' O'Neill Says
By Brendan Murray
Oct. 1 (Bloomberg) -- Former U.S. Treasury Secretary Paul O'Neill said the $700 billion bank-rescue proposal under negotiation in Washington is ``crazy,'' with potentially ``awful'' consequences for the world's largest economy.
``Doesn't this seem like lunacy to you?'' said O'Neill, who was President George W. Bush's first Treasury chief, from 2001 to 2002, in a telephone interview today. ``The consequences of it are unbelievably bad in terms of public intrusion into the private sector.''
O'Neill's objections mirror those of Republicans in the House of Representatives who rejected the plan in a Sept. 29 vote. The former Treasury chief said he's lobbying for an alternative solution that would offer guarantees for troubled assets, stopping short of purchasing the debt.
``Is anybody thinking there?'' asked O'Neill, who also served as deputy budget director in the Ford administration. ``It's too late, it's not going to make any difference and it's aggravating as hell when there's a better idea and you can't even get it in play,'' he said, recognizing little success so far in pitching his own proposal.
O'Neill, 72, was fired after an almost two-year tenure marked by strains with White House officials and comments that roiled markets.
`Just Like Cash'
His plan to deal with the crisis would start with a ``discounted cash-flow analysis'' of distressed instruments that are clogging the financial system. The government would guarantee the assets, paring back the support as principal and interest payments were made, he said.
``That should take care of the liquidity problem because if they have a government guarantee at a specified level they should trade just like cash,'' O'Neill said.
He likened his solution to the Treasury's decision Sept. 19 to guarantee domestic money-market funds for a year to try to stop a run on what traditionally have been among the safest of investments.
To replenish capital in banks, the government should make 20-year loans to institutions and charge 2 percentage points above the government's borrowing rate, he said. Regulators could count the loans as part of the banks' capital base, he added. Paying the premium would give banks an incentive to retire the government loans faster, he said.
O'Neill said he has tried to shop his ideas to congressional leaders including Joint Economic Committee Chairman Charles Schumer; Senate Banking Committee Chairman Christopher Dodd; and Senator Richard Shelby, the ranking Republican on the Banking Committee.
Senate Vote
``None of them are returning phone calls,'' O'Neill said. ``I honestly don't think they really understand it and they're so much in a bubble that it's impossible to penetrate it.''
Meanwhile, the Senate is set to vote tonight on a modified version of the $700 billion rescue plan the House rejected two days ago. The House may vote again Oct. 3.
``If they pass this thing, it's awful what the consequences are going to be in terms of an ongoing federal relationship that doesn't need to exist with the institutions,'' O'Neill said. ``Are we going to insist on having a federal representative on boards of directors to protect our investment?''
The main component of the legislation now under consideration is giving the Treasury secretary authority to purchase distressed mortgage-related assets with an amount of money equivalent to about half of Canada's annual gross domestic product.
``We have no capacity in the federal government and it's not possible to create a capacity to manage a $700 billion property portfolio,'' said O'Neill, who was chairman of Alcoa Inc., the largest U.S. aluminum producer, from 1987 to 2000. ``It's crazy. It's like we've lost our moorings.''
To contact the reporter on this story: Brendan Murray at brmurray@bloomberg.net
Showing posts with label Paul O'Neill. Show all posts
Showing posts with label Paul O'Neill. Show all posts
Wednesday, October 8, 2008
Friday, September 21, 2007
Greenspan Spills the Beans on Oil
http://consortiumnews.com/2007/091607a.html
Greenspan Spills the Beans on Oil
By Ray McGovern
September 16, 2007
For those still wondering why President George W. Bush and Vice President Dick Cheney sent our young men and women into Iraq, the secret is now “largely” out.
No, not from the lips of former Secretary of State Colin Powell. It appears we shall have to wait until the disgraced general/diplomat draws nearer to meeting his maker before he gets concerned over anything more than the “blot” that Iraq has put on his reputation.
Rather, the uncommon candor comes from a highly respected Republican doyen, economist Alan Greenspan, chairman of the Federal Reserve from 1987 to 2006, whom the president has praised for his “wise policies and prudent judgment.”
Sadly for Bush and Cheney, Greenspan decided to put prudence aside in his new book, The Age of Turbulence, and answer the most neuralgic issue of our times—why the United States invaded Iraq.
Greenspan writes:
“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.”
Everyone knows? Would that it were so. But it’s hardly everyone.
There are so many, still, who “can’t handle the truth,” and that is understandable. I have found it a wrenching experience to conclude that the America I love would deliberately launch what the Nuremburg Tribunal called the “supreme international crime”—a war of aggression—largely for oil.
For those who are able to overcome the very common, instinctive denial, for those who can handle the truth, it really helps to turn off the Sunday football games early enough to catch up on what’s going on.
There they could have seen another of Bush’s senior economic advisers, former Treasury Secretary Paul O’Neill on Jan. 11, 2004, discussing The Price of Loyalty, his memoir about his two years inside the Bush administration.
O’Neill, a plain speaker, likened the president’s behavior at cabinet meetings to that of “a blind man in a roomful of deaf people.” Cheney and “a praetorian guard that encircled the president” would help Bush make decisions off-line, blocking contrary views.
Cheney has a Rumsfeldian knack for aphorisms that don’t parse in the real world— like “deficits don’t matter.” To his credit, O’Neill picked a fight with that and ended up being fired personally by Cheney. In his book, Greenspan heaps scorn on the same Cheneyesque insight.
O’Neill made no bones about his befuddlement over the president’s diffident disengagement from discussions on policy, except, that is, for Bush’s remarks betraying a pep-rally-cheerleader fixation with removing Saddam Hussein and occupying Iraq.
Why Iraq? 'Largely Oil'
O’Neill began to understand right after Bush’s inauguration when the discussion among his top advisers abruptly moved to how to divvy up Iraq’s oil wealth.
Just days into the job, President Bush created the Cheney energy task force with the stated aim of developing “a national energy policy designed to help the private sector.” Typically, Cheney has been able to keep secret its deliberations and even the names of its members.
But a Freedom of Information Act lawsuit forced the Commerce Department to turn over task force documents, including a map of Iraqi oilfields, pipelines, refineries, terminals, and potential areas for exploration; a Pentagon chart “Foreign Suitors for Iraqi Oilfield Contracts”; and another chart detailing Iraqi oil and gas projects—all dated March 2001.
On the 60 Minutes program on Dec. 15, 2002, Steve Croft asked then-Defense Secretary Donald Rumsfeld, “What do you say to people who think this [the coming invasion of Iraq] is about oil?” Rumsfeld replied:
“Nonsense. It just isn’t. There—there—there are certain............. things like that, myths that are floating around. I’m glad you asked. I—it has nothing to do with oil, literally nothing to do with oil.”
Au Contraire
Greenspan’s indiscreet remark adds to the abundant evidence that Iraq oil, and not weapons of mass destruction, was the priority target long before the Bush administration invoked WMD as a pretext to invade Iraq.
In the heady days of “Mission Accomplished,” a week after the president landed on the aircraft carrier, then-Deputy Defense Secretary Paul Wolfowitz virtually bragged about the deceit during an interview.
On May 9, 2003, Wolfowitz told Vanity Fair:
“The truth is that for reasons that have a lot to do with the U.S. government bureaucracy, we settled on the one issue that everyone could agree on, which was weapons of mass destruction as the core reason...”
During a relaxed moment in Singapore later that same month, Wolfowitz reminded the press that Iraq “floats on a sea of oil,” and thus added to the migraine he had already given folks in the White House PR shop.
But wait. For those of us absorbing more than Fox channel news, the primacy of the oil factor was a no-brainer.
The limited number of invading troops were ordered to give priority to securing the oil wells and oil industry infrastructure immediately and let looters have their way with just about everything else (including the ammunition storage depots!).
Barely three weeks into the war, Rumsfeld famously answered criticism for not stopping the looting: “Stuff happens.” No stuff happened to the Oil Ministry.
Small wonder that, according to O’Neill, Rumsfeld tried hard to dissuade him from writing his book and has avoided all comment on it. As for Greenspan’s book, Rumsfeld will find it easier to dodge questions from the Washington press corps from his sinecure at the Hoover Institute at Stanford.
Eminence Grise...or Oily
But the other half of what Col. Larry Wilkerson, Colin Powell’s former chief of staff at the State Department, calls the “Cheney-Rumsfeld cabal” is still lurking in the shadows.
What changed Cheney’s attitude toward Iraq from his sensible remark in 1992 when then-Defense Secretary Cheney defended President George H.W. Bush's decision in 1991 not to follow up the expulsion of Iraqi troops from Kuwait with the ouster of Saddam Hussein and the conquest of Iraq.
“How many additional American casualties is Saddam worth?” Cheney asked in August 1992. “Not that damned many. So I think we got it right...when the president made the decision that we were not going to go get bogged down in the problems of trying to take over and govern Iraq.”
Then, there were Cheney’s revealing, damning remarks as Halliburton's CEO?
“Oil companies are expected to keep developing enough oil to offset oil depletion and also to meet new demand,” Cheney said in autumn 1999. “So where is the oil going to come from? Governments and the national oil companies are obviously in control of 90 percent of the assets. Oil remains fundamentally a government business. The Middle East with two-thirds of the world’s oil and the lowest cost is still where the prize ultimately lies.”
Not only Cheney, but also many of the captains of the oil industry were looking on Iraq with covetous eyes before the war.
Most forget that the Bush/Cheney administration came in on the heels of severe shortages of oil and natural gas in the U.S., and the passing of a milestone at which the United States had just begun importing more than half of the oil it consumes.
One oil executive confided to a New York Times reporter a month before the war: “For any oil company, being in Iraq is like being a kid in F.A.O. Schwarz.”
There were, to be sure, other factors behind the ill-starred attack on Iraq—the determination to acquire permanent military bases in the area, for one. But that factor can be viewed as a subset of the energy motivation.
In other words, the felt need for what the Pentagon prefers to call “enduring” military bases in the Middle East is a function of its strategic importance which is a function—you guessed it, a function of its natural resources. Not only oil, but natural gas and water as well.
In my opinion, the other major factor in the Bush/Cheney decision to make war on Iraq was the misguided notion that this would make that part of the world safer for Israel.
Indeed, the so-called “neo-conservatives” still running U.S. policy toward the Middle East continue to have great difficulty distinguishing between what they perceive to be the strategic interests of Israel and those of the United States.
Why Are Americans Silent?
Could it be that many Americans remain silent because we are unwilling to recognize the Iraq war as the first of the resource wars of the 21st century; because we continue to be comfortable hogging far more than our share of the world’s resources and will look the other way if our leaders tell us that aggressive war is necessary to protect that siren-call, “our way of life,” from attack by those who are just plain jealous?
Perhaps a clue can be found in the remarkable reaction I received after a lecture I gave two and a half years ago in a very affluent suburb of Milwaukee. I had devoted much of my talk to what I consider the most important factoid of this century: the world is running out of oil.
Afterwards some 20 folks lingered in a small circle to ask follow-up questions. A persistent, handsomely dressed man, who just would not let go, dominated the questioning:
"Surely you agree that we need the oil. Then what's your problem? Some 1,450 killed thus far are far fewer than the toll in Vietnam where we lost 58,000; it's a small price to pay... a sustainable rate to bear. What IS your problem?"
I asked the man if he would feel differently if one of those (then) 1,450 killed were his own son. Judging from his abrupt, incredulous reaction, the suggestion struck him as so farfetched as to be beyond his ken. “It wouldn’t be my son,” he said.
And that, I believe, is a HUGE part of the problem.
Ray McGovern works with Tell the Word, the publishing arm of the ecumenical Church of the Saviour in Washington, DC. A former CIA analyst, he is now on the Steering Group of Veteran Intelligence Professionals for Sanity. His e-mail is RRMcGovern@aol.com.
Greenspan Spills the Beans on Oil
By Ray McGovern
September 16, 2007
For those still wondering why President George W. Bush and Vice President Dick Cheney sent our young men and women into Iraq, the secret is now “largely” out.
No, not from the lips of former Secretary of State Colin Powell. It appears we shall have to wait until the disgraced general/diplomat draws nearer to meeting his maker before he gets concerned over anything more than the “blot” that Iraq has put on his reputation.
Rather, the uncommon candor comes from a highly respected Republican doyen, economist Alan Greenspan, chairman of the Federal Reserve from 1987 to 2006, whom the president has praised for his “wise policies and prudent judgment.”
Sadly for Bush and Cheney, Greenspan decided to put prudence aside in his new book, The Age of Turbulence, and answer the most neuralgic issue of our times—why the United States invaded Iraq.
Greenspan writes:
“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.”
Everyone knows? Would that it were so. But it’s hardly everyone.
There are so many, still, who “can’t handle the truth,” and that is understandable. I have found it a wrenching experience to conclude that the America I love would deliberately launch what the Nuremburg Tribunal called the “supreme international crime”—a war of aggression—largely for oil.
For those who are able to overcome the very common, instinctive denial, for those who can handle the truth, it really helps to turn off the Sunday football games early enough to catch up on what’s going on.
There they could have seen another of Bush’s senior economic advisers, former Treasury Secretary Paul O’Neill on Jan. 11, 2004, discussing The Price of Loyalty, his memoir about his two years inside the Bush administration.
O’Neill, a plain speaker, likened the president’s behavior at cabinet meetings to that of “a blind man in a roomful of deaf people.” Cheney and “a praetorian guard that encircled the president” would help Bush make decisions off-line, blocking contrary views.
Cheney has a Rumsfeldian knack for aphorisms that don’t parse in the real world— like “deficits don’t matter.” To his credit, O’Neill picked a fight with that and ended up being fired personally by Cheney. In his book, Greenspan heaps scorn on the same Cheneyesque insight.
O’Neill made no bones about his befuddlement over the president’s diffident disengagement from discussions on policy, except, that is, for Bush’s remarks betraying a pep-rally-cheerleader fixation with removing Saddam Hussein and occupying Iraq.
Why Iraq? 'Largely Oil'
O’Neill began to understand right after Bush’s inauguration when the discussion among his top advisers abruptly moved to how to divvy up Iraq’s oil wealth.
Just days into the job, President Bush created the Cheney energy task force with the stated aim of developing “a national energy policy designed to help the private sector.” Typically, Cheney has been able to keep secret its deliberations and even the names of its members.
But a Freedom of Information Act lawsuit forced the Commerce Department to turn over task force documents, including a map of Iraqi oilfields, pipelines, refineries, terminals, and potential areas for exploration; a Pentagon chart “Foreign Suitors for Iraqi Oilfield Contracts”; and another chart detailing Iraqi oil and gas projects—all dated March 2001.
On the 60 Minutes program on Dec. 15, 2002, Steve Croft asked then-Defense Secretary Donald Rumsfeld, “What do you say to people who think this [the coming invasion of Iraq] is about oil?” Rumsfeld replied:
“Nonsense. It just isn’t. There—there—there are certain............. things like that, myths that are floating around. I’m glad you asked. I—it has nothing to do with oil, literally nothing to do with oil.”
Au Contraire
Greenspan’s indiscreet remark adds to the abundant evidence that Iraq oil, and not weapons of mass destruction, was the priority target long before the Bush administration invoked WMD as a pretext to invade Iraq.
In the heady days of “Mission Accomplished,” a week after the president landed on the aircraft carrier, then-Deputy Defense Secretary Paul Wolfowitz virtually bragged about the deceit during an interview.
On May 9, 2003, Wolfowitz told Vanity Fair:
“The truth is that for reasons that have a lot to do with the U.S. government bureaucracy, we settled on the one issue that everyone could agree on, which was weapons of mass destruction as the core reason...”
During a relaxed moment in Singapore later that same month, Wolfowitz reminded the press that Iraq “floats on a sea of oil,” and thus added to the migraine he had already given folks in the White House PR shop.
But wait. For those of us absorbing more than Fox channel news, the primacy of the oil factor was a no-brainer.
The limited number of invading troops were ordered to give priority to securing the oil wells and oil industry infrastructure immediately and let looters have their way with just about everything else (including the ammunition storage depots!).
Barely three weeks into the war, Rumsfeld famously answered criticism for not stopping the looting: “Stuff happens.” No stuff happened to the Oil Ministry.
Small wonder that, according to O’Neill, Rumsfeld tried hard to dissuade him from writing his book and has avoided all comment on it. As for Greenspan’s book, Rumsfeld will find it easier to dodge questions from the Washington press corps from his sinecure at the Hoover Institute at Stanford.
Eminence Grise...or Oily
But the other half of what Col. Larry Wilkerson, Colin Powell’s former chief of staff at the State Department, calls the “Cheney-Rumsfeld cabal” is still lurking in the shadows.
What changed Cheney’s attitude toward Iraq from his sensible remark in 1992 when then-Defense Secretary Cheney defended President George H.W. Bush's decision in 1991 not to follow up the expulsion of Iraqi troops from Kuwait with the ouster of Saddam Hussein and the conquest of Iraq.
“How many additional American casualties is Saddam worth?” Cheney asked in August 1992. “Not that damned many. So I think we got it right...when the president made the decision that we were not going to go get bogged down in the problems of trying to take over and govern Iraq.”
Then, there were Cheney’s revealing, damning remarks as Halliburton's CEO?
“Oil companies are expected to keep developing enough oil to offset oil depletion and also to meet new demand,” Cheney said in autumn 1999. “So where is the oil going to come from? Governments and the national oil companies are obviously in control of 90 percent of the assets. Oil remains fundamentally a government business. The Middle East with two-thirds of the world’s oil and the lowest cost is still where the prize ultimately lies.”
Not only Cheney, but also many of the captains of the oil industry were looking on Iraq with covetous eyes before the war.
Most forget that the Bush/Cheney administration came in on the heels of severe shortages of oil and natural gas in the U.S., and the passing of a milestone at which the United States had just begun importing more than half of the oil it consumes.
One oil executive confided to a New York Times reporter a month before the war: “For any oil company, being in Iraq is like being a kid in F.A.O. Schwarz.”
There were, to be sure, other factors behind the ill-starred attack on Iraq—the determination to acquire permanent military bases in the area, for one. But that factor can be viewed as a subset of the energy motivation.
In other words, the felt need for what the Pentagon prefers to call “enduring” military bases in the Middle East is a function of its strategic importance which is a function—you guessed it, a function of its natural resources. Not only oil, but natural gas and water as well.
In my opinion, the other major factor in the Bush/Cheney decision to make war on Iraq was the misguided notion that this would make that part of the world safer for Israel.
Indeed, the so-called “neo-conservatives” still running U.S. policy toward the Middle East continue to have great difficulty distinguishing between what they perceive to be the strategic interests of Israel and those of the United States.
Why Are Americans Silent?
Could it be that many Americans remain silent because we are unwilling to recognize the Iraq war as the first of the resource wars of the 21st century; because we continue to be comfortable hogging far more than our share of the world’s resources and will look the other way if our leaders tell us that aggressive war is necessary to protect that siren-call, “our way of life,” from attack by those who are just plain jealous?
Perhaps a clue can be found in the remarkable reaction I received after a lecture I gave two and a half years ago in a very affluent suburb of Milwaukee. I had devoted much of my talk to what I consider the most important factoid of this century: the world is running out of oil.
Afterwards some 20 folks lingered in a small circle to ask follow-up questions. A persistent, handsomely dressed man, who just would not let go, dominated the questioning:
"Surely you agree that we need the oil. Then what's your problem? Some 1,450 killed thus far are far fewer than the toll in Vietnam where we lost 58,000; it's a small price to pay... a sustainable rate to bear. What IS your problem?"
I asked the man if he would feel differently if one of those (then) 1,450 killed were his own son. Judging from his abrupt, incredulous reaction, the suggestion struck him as so farfetched as to be beyond his ken. “It wouldn’t be my son,” he said.
And that, I believe, is a HUGE part of the problem.
Ray McGovern works with Tell the Word, the publishing arm of the ecumenical Church of the Saviour in Washington, DC. A former CIA analyst, he is now on the Steering Group of Veteran Intelligence Professionals for Sanity. His e-mail is RRMcGovern@aol.com.
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