Sunday, October 21, 2012

Glenn Hubbard Must Not Become Treasury Secretary

Glenn Hubbard is a political hack of epic proportions. It would be a disaster for America if Mitt Romney won the presidency and appointed Hubbard as Treasury Secretary or chairman of the Federal Reserve. Hubbard has argued for the Federal Reserve raising interest rates during the the economic downturn.

Hubbard served as chairman of the Council of Economic Advisers during the beginning of the Bush administration. Former Treasury Sec. Paul O'Neill told Hubbard that the surplus needed to be used to shore up entitlements.O'Neill also warned that the surplus would disappear with the tax cuts Hubbard was drafting. Hubbard has convenient amnesia about the conversations O'Neill had with him.

HUBBARD: "I don’t ever recall Paul O’Neill sharing that observation at the time. I will say that early on in the Bush campaign for president, while he was still governor, Social Security reform was an issue that came up in any discussion of budget surpluses. However, it was Governor Bush’s conclusion that, politically, using the surplus for Social Security was not likely to happen."

O'Neill told Ron Suskind of the level of Hubbard's hackery in the book "The Price of Loyalty." Hubbard pushed for tax cuts after the September 11th attacks shook the financial markets and the likelyhood of America paying for war in Afghanistan.

"I believe that any large tax cut proposal that is not a product of consultation with Democratic leadership will begin to unravel the fragile trust and bipartisanship we are currently experiencing," Weinberger wrote. After opposition from O'Neill, Greenspan and former Treasury Secretary Bob Rubin to acting before facts about post-Sept. 11 economic effects became clear, a cut of $48 billion was passed six months later. But an internal administration debate about whether the Sept. 11 attacks should be used to carry forward a partisan agenda had begun.

Hubbard is an extremely unpleasant man who wishes to hide his ties to the financial sector. This scene from the movie Inside Job should give people pause about Hubbard serving again in government.

Hubbard worked as an adviser for Goldman Sachs. Hubbard co-wrote a study with then Goldman Sachs economist William C. Dudley that urged for selling toxic derivatives for mortgages.

“The capital markets have helped facilitate a major transformation of the U.S. mortgage financing system over the past 25 years. … The result has been a dramatic decline in the cyclical volatility of housing activity.”

The short answer is Hubbard and Dudley were encouraging Goldman Sachs to sell garbage mortgage-backed securities to their investors and then bet on mortgages to go bad. The investors lose money, but Goldman Sachs makes a killing.

An example of how big of economic hacks are Hubbard and Dudley. The stupidity of this would be laughable, if it wasn't for the 2008 crash.

“This use of derivatives leads to improved economic performance,” they wrote, insisting, “The capital markets have also acted to reduce the volatility of the economy. Recessions are less frequent and milder when they occur.”

Is there anything this man hasn't been wrong on? Hubbard is now going around claiming Mitt Romney will explain the tax base and create 12 million jobs in 4 years. Hubbard and the Romney campaign are adding the numbers of jobs from three studies to come to the magic number of 12 million. One study says that if China starts honoring U.S. patents it would create two million jobs. Good luck getting China to do that.

If Romney wins, Democrats need to block Hubbard from ever getting confirmed to head Treasury or the Federal Reserve. There isn't a more greedy, fantasy-based and incompetent economist out there. Hubbard is unfit to serve in government.

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