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USTR Nominee Froman Called 'One Of The Most Egregious Examples Of The Way The Revolving Door Works Between Gov't And Business'

from the that-doesn't-bode-well dept

After posting a bit about Michael Froman, the new nominee for USTR, I was already skeptical that he’d be any improvement over the predecessor, Ron Kirk. After all, Froman was deeply involved in three of the worst free trade agreements that the US has negotiated over the past few years, which more or less set the model for the ambitious and dangerously misguided ACTA and TPP agreements. However, some others have pointed out that it may be even worse, highlighting a Felix Salmon blog post from 2009, in which he calls Michael Froman out as being an “egregious example” of the revolving door problem we’ve highlighted between regulators and the businesses they regulate.

[Michael Froman’s] one of the most egregious examples — up there with Bob Rubin, literally — we’ve yet seen of the way the revolving door works between business and government generally, and between Citigroup and Treasury in particular.

That’s troubling, to say the least. Salmon points to a Matt Taibbi piece for Rolling Stone that highlights some very questionable activity on the part of Froman, including keeping his job at Citibank while helping to select the economic team for Obama’s first term… the very folks who would be in charge of regulating Citibank.

Leading the search for the president’s new economic team was his close friend and Harvard Law classmate Michael Froman, a high-ranking executive at Citigroup. During the campaign, Froman had emerged as one of Obama’s biggest fundraisers, bundling $200,000 in contributions and introducing the candidate to a host of heavy hitters — chief among them his mentor Bob Rubin, the former co-chairman of Goldman Sachs who served as Treasury secretary under Bill Clinton. Froman had served as chief of staff to Rubin at Treasury, and had followed his boss when Rubin left the Clinton administration to serve as a senior counselor to Citigroup (a massive new financial conglomerate created by deregulatory moves pushed through by Rubin himself).

Incredibly, Froman did not resign from the bank when he went to work for Obama: He remained in the employ of Citigroup for two more months, even as he helped appoint the very people who would shape the future of his own firm….

That piece also talks about Froman’s role in getting Timothy Geithner his job at Treasury, right after Geithner helped craft the bailout of Citibank that basically put all the risk on the Fed and didn’t require any Citi concessions or exec changes, despite their own culpability in making a ton of bad investments.

Geithner, in other words, is hired to head the U.S. Treasury by an executive from Citigroup — Michael Froman — before the ink is even dry on a massive government giveaway to Citigroup that Geithner himself was instrumental in delivering. In the annals of brazen political swindles, this one has to go in the all-time Fuck-the-Optics Hall of Fame.

Wall Street loved the Citi bailout and the Geithner nomination so much that the Dow immediately posted its biggest two-day jump since 1987, rising 11.8 percent. Citi shares jumped 58 percent in a single day, and JP Morgan Chase, Merrill Lynch and Morgan Stanley soared more than 20 percent, as Wall Street embraced the news that the government’s bailout generosity would not die with George W. Bush and Hank Paulson.

I was hopeful that perhaps we’d get a USTR who was in favor of openness and transparency, but it looks like Froman may be the quintessential example of a backroom dealer, who already has a reputation for pushing through bad trade agreements.

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Comments on “USTR Nominee Froman Called 'One Of The Most Egregious Examples Of The Way The Revolving Door Works Between Gov't And Business'”

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24 Comments
Not an Electronic Rodent (profile) says:

Re: Re:

i wonder how far the people will be pushed before they actually start to say something about the way the government is screwing them over and also helping industry to do the same?

“Saying something” only counts when it affects the outcome – when your “democratic voice” (i.e. vote) only gets to pick one of 2 or 3 people who will do exactly the same, it’s not terribly effective.

Not an Electronic Rodent (profile) says:

Re: Re: Re: Re:

When too few people are in contention for an election, it is far too easy for external forces to steal the election on specific areas!

Indeed, that’s another way of saying “The interests of entities with millions to spend are not the same as the majority” and that’s rather unlikely to change any time soon don’t you think?

out_of_the_blue says:

Mike continually surprised that Rich corporatists are bad.

As mentioned last week by me, Froman was at Citigroup, that’s all you really need to know about his views on the rest of us.

But this is one of Mike’s most enduring and conspicous characteristics: every day he writes about what evils The Rich are doing or trying to do, and yet he can’t or won’t generalize from the abundant instances that The Rich as a class are each and every one as evil as their wit and daring allow. I’m sure it’s because he was born into the 1%, but even so, he ought to notice that as a practical matter it’s just simpler to assume that everyone Rich and powerful is a total rat. And the few times you’re wrong will either be a pleasant surprise or won’t matter.

RD says:

Re: Mike continually surprised that Rich corporatists are bad.

Shut the fuck up, troll! No one wants to hear your Pro Big Govt/Business/Copyright I’ve-got-a-hard-on-about-attacking-Mike ranting!

tl;dr, auto-report. Because: if it’s good enough for ootb to only read the headline and go off on a rant attack…

The Groove Tiger (profile) says:

Re: Mike continually surprised that Rich corporatists are bad.

“can’t or won’t generalize”

Oh, so all this is about out_of_the_blue complaining that some aren’t quick to stereotype others. This explains a lot. He can’t accept that a blogger somewhere says “this rich guy is bad, that rich guy is bad”, no, he won’t shut up until it’s “the Rich(TM) are bad! all of them! blarghablargha!”

Rikuo (profile) says:

Re: Mike continually surprised that Rich corporatists are bad.

Assume only makes an ass out of u and me.

Generally, most rich people are assholes, but not all. Look at Bill Gates. For all the slimy tactics he pulled during the 90’s, he has since then donated billions (with a B) to charity and gone around convincing other billionaires to do the same.
People like you scare me. I can see you in some sort of class-based revolution (hmm, in fact, now that I think about it, what you write sounds like it was lifted straight from Karl Marx? You a commie?) attacking rich people with no thought for whether they might be innocent.

And yes, it DOES MATTER when a situation is proven wrong. It means your cast-iron view of the world is mistaken, not 100% true.

Anonymous Coward says:

Re: Mike continually surprised that Rich corporatists are bad.

He won’t generalize about a people or class for a very good reason. Want to understand it? Think about the generalizations about blacks, Hispanics, Native Americans and Jews. Why did I pick those groups? Because they are among the most terrorized peoples in the US. When you generalize, you marginalize. That’s part of your problem, your head being too small to hold larger concepts.

special-interesting (profile) says:

The USTR agency is changing the leadership from Ron Kirk to Michael Froman so what effect does that have on the current operations?

Treaties nowadays don’t seem to have that ?preservation of peace, culture and society? kind of feel to them? How do we compare TPP, TRIPS or ACTA measure on the level of the Bern Convention? Why do we trade away our freedoms and Public Domain Rights away along with trade agreements? What we gain is not positive at all but a real loss of personal expression.

Freedom and Expression (Freedom of Expression) are NOT on the bargaining table. These people must know that they do not have the right to trade away these things that are boldly written in the Constitution. Why would the leadership of the USTR agency risk the legacy work of their lives in future Constitutional conflicts with current questionable special interest skewed interpretations?

Have called these weirdo trade agreements unconstitutional before and either the constitution wins or it doesn’t. Who cares about whether the literal, clear writing of first preamble and the Bill of Rights will win out over the poorly written slipshod corporate protectionism special interest infested impossible to be interpreted without some complaisant judge and jury (complaisant because they did not throw the treaty our whole for being obviously unconstitutional.)

Trade negotiations using Freedom and Expression as bargaining chips seems more like a slave trade agreement. Seriously. What aware and intelligent person would trade away their Intellectual Rights for anything let alone some out-sized media firms profit margin?

Has the term ‘to big to fail’ become overused? Ideas are not property! The term ‘Intellectual Property’ should be abolished with the abhorrence equal to some former political regimes.

Why does anyone consider intellectual property to trump/steal-from Intellectual Rights?! Its not a bargain a free individual or country should ever consider. Its a no-win deal from every aspect. NOBODY benefits and even the short sighted firms/corporations profit will decline in an anthill based society’s diminishing return economic profile.

The US seems bent on making their precious trade agreements irrelevant with including so many clauses that force a countries domestic law to conform to some silly trade agreement. Where does a trade agreement need to have such authority? The USTR agency authority seems way over its mandate without the convening of a full Constitutional Congress to back up such blatant signing away of basic Constitutional Rights.

This is more than just a large country bullying smaller Least Developed Countries. How does the ?no roll back? clause affect other members of the treaty in later negotiations? Consider the US position if the courts wised up and actually considered the Constitution to be valid and threw it out along with some other ill advised treaties?

It sounds more and more like a trap/back door attempt to further perpetuate special interest protectionist legislation temporarily benefiting only a few large multi national corporations.

Reactionary,

Change in government takes some time. Even if the top leadership of the Executive Branch and the majority of the Congressional Branch are replaced by men and women who have read and keep close to the heart the constitution it will take time to replace all the special interest influenced appointees in the various agencies and offices.

What is important is that the process be started… Any time soon now? Hahaha Its at least possible. Vote wisely. The system is allowed to exist and influence candidates/law/treaties/etc only because of our voting habits. We typically only vote for one of two pre decided candidates and ignore all the other parties.

The other parties are vilified so successfully by the two dominant parties that most consider them as ‘unviable’ but thats likely only demonization using whatever media opportunities available to poison the publics viewpoint. Its important that people know that the media news is just only a viewpoint and often not even close to correct or right.

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