WaMu failed because of run on bank, former regulatory chief says
By Jim Puzzanghera and Clement Tan
John Reich, who was director of the Office of Thrift Supervision, tells a Senate panel that Washington Mutual’s 2008 collapse resulted from a drop in public confidence, not a failure by his agency.
Reporting from Washington — The former head of the chief banking regulatory agency that oversaw failed Washington Mutual told lawmakers Friday that the giant savings and loan collapsed because of a run on the bank, not failures by him or other regulators.
The testimony of John Reich, who served as head of the Office of Thrift Supervision from 2005 to 2009, came as a Senate subcommittee released the results of an 18-month investigation that blasted regulatory supervisors for doing little to halt risky practices at WaMu that bank examiners had identified as early as 2003.
The criticism was echoed by a report this week on WaMu’s collapse, the largest bank failure in U.S. history, by the inspectors general of the thrift agency and the Federal Deposit Insurance Corp.
Reich said WaMu was seized by regulators on Sept. 25, 2008, because of a $16.4-billion run on deposits after the sharp decline in the economy throughout the year and the failure of Lehman Bros. and the bailout of American International Group Inc. just days earlier.
Grappling with the Obama Reality
For people like me — young, college-educated and politically independent “millenials” — Barack Obama was and stilll remains the college-professor-we-wished-became-president, who actually became president of the United States. His “Yes, We Can” campaign tagline and exhortation for young ones to enter public service resonated strongly, but much to the surprise of those who know my politics, I was rooting for Hilary Clinton in the Democratic primaries. It wasn’t so much a vote against Obama than a vote for Mrs Clinton. We all know who won.
Sure, there were concerns over baggage from her husband’s presidency, but she also had the experience and the verve to negotiate the murky waters of Congressional politics, an important aspect of legislative strategy. I thought Obama could have done with some more political experience as either Hillary’s vice-president or Secretary of State, which would then prepare him for a run in 2016. After all, he’s much younger than Hillary. If there were anybody more equipped to clean up the mess created by a spoilt brat who didn’t know better and allowed two wily old foxes to hijack his presidency, it was perhaps a strong and smart motherly figure who would be able to stand up to the egos that dot politics. Simply put, America needs to be rehabilitated.
Those same friends thought I was cynical for thinking that, but politics is cynical. You have to fight cynical with cynical and then somehow rise above that. Not many political progressives are capable of that because they usually get lynched by the GOP for their politics, which are easily cast as “limp” and “gutless” and therefore “bad for America” by their more hawkish opponents. Both Obama and Hillary want to rise above that, but I wasn’t sure if Obama had what it takes to move beyond cynical hell. I was enthralled by the idea of an Obama presidency, but I wasn’t too hot about the reality of it.
On Climate Change, Resignation, Already?
Photo: Flickr/Gerald Simmons
So after much chatter, we are only finally seeing the start of the long climate-change bill fight. Senate Democrats introduced a draft of a climate bill Wednesday that suggests the legislation will include a more ambitious greenhouse gas emissions target than one passed by the House. The New York Times reports:
The measure, sponsored by Senators Barbara Boxer of California and John Kerry of Massachusetts, seeks to achieve by 2020 a 20 percent reduction from 2005 levels of carbon dioxide emissions, compared with 17 percent in the House bill, according to the 801-page draft, which circulated on Tuesday. The House and Senate bills both include a long-term target of an 83 percent reduction by 2050.
Reactions are already flowing in thick and fast, with Andrew Revkin musing about the absence of the C-word. The Senate version is called “Clean Energy Jobs and American Power Act,” while the earlier House one is called “American Clean Energy and Security Act” — in both cases, leaving out any overt reference to “climate”. Revkin acknowledges how that word lacks political traction and laments how “the economics of climate legislation still seems to matter more to many people than what a bill would do to limit environmental risk”.
Poverty Survey May Help Obama’s Case
Photo: Flickr User NESRI
The latest poverty figures released by the Census Bureau today might just serve to buttress some of the main points in President Obama’s Congressional address last night. According to a Reuters report, the bureau reported the U.S. poverty rate rose to its highest level in 11 years in 2008, rising to 13.2 per cent from 12.5 per cent in 2007.
Enlightening America’s Self Interest
Photo: Flickr User Liberal Democrats
Here’s a thought: Even if you think global warming is a sham, wouldn’t the invention of environmentally friendly technologies and the reduction in our carbon emissions STILL be a politically superior thing to be doing, underpinned by a stronger moral case? Sure, the cost of adapting to climate change is immense, but for a country that likes to see itself as a global power, any domestic legislation guided by narrow self interest and a failure to engage in the global process would invariably compromise that reality — especially in a multi or unipolar global polity.
Economic Logic Alone Does Not Make a “Home”
Photo: Flickr User besar bear
What makes a country a home? Is it emotional ties or pure economic self-interest?
Linda Lim posed this question in a Straits Times article published June 19 and it has lingered in my mind ever since, particularly at the Kent Ridge Ministerial Forum held Aug. 31 at the NUS Theatrette.
Singapore’s manpower minister, Ng Eng Hen was the minister in attendance as he suggested how the Singapore graduate can “stand tall in a shrinking world”. He talked about the perceived strengths and weaknesses of the Singapore graduate and suggested we have to improve if we were to take advantage of future opportunities in an increasingly globalised world.
It all sounded so familiar. Ng cached his argument in an unmistakable economic paradigm that has come to characterize the PAP government. But should the only logic that prevails on most occasions be economic in a home? While it is important to embrace this global human flow, is Singapore embracing this at the risk of alienating Singaporeans?
Journalism’s Problem Isn’t Gawker. It’s Advertising.
Washington Post’s Ian Shapira fired the latest salvo in the ongoing debate about paid media content with his thoughtful “rant” over the weekend about Gawker “stealing” his story. But he raised the bar by invoking legal considerations, wondering aloud if Gawker’s (mis)use of his work amounted to copyright infringement.
And now, more believe he, along with many other “conventional” media outlets, may have a case. Harvard University’s Nieman Journalism Lab has stats possibly backing Shapira’s argument. So should the central issue of what constitutes “fair use” determine how things will pan out? It’s not exactly prudent when most debates on that leads down a slippery slope. Besides, technologists have insisted moves made by The Associated Press last week to “protect” its content are backward and will be bad for business in the long run.
But at the end of the day, it is the bottom line that drives business decisions. People such as Clay Shirky and Jay Rosen may eventually be right about the intellectual architecture of the mediascape, but the details of how we actually get there are what matter most. This is really about advertising revenue.
Why the Latest Nigerian Unrest Should Matter More
If the Obama administration is really interested in conducting America’s foreign relations differently, it should take a deep seated interest in the situation in Nigeria right now.
The New York Times reported Nigerian security forces on Thursday confirmed the death of the leader of a fundamentalist Islamic sect in the city of Maiduguri, apparently ending a fierce five-day campaign against the group that may have left hundreds dead across northern Nigeria.
The militant group led by Mohammed Yusuf, known as Boko Haram or Taliban, wants to overthrow the Nigerian government and impose a strict version of Islamic law. It has been blamed for days of violent unrest in which hundreds of people died in clashes between his followers and security forces.
A military spokesman would not say exactly how Yusuf was killed, though it has been widely reported that he was killed after being captured. But in an interview with the BBC’s Network Africa, the Nigerian Information Minister Dora Akunyili said while she was concerned about the death and that the government would find out “exactly what happened,” Yusuf’s demise was “positive” for Nigeria.
The State Department has not commented on the Nigerian situation so far, but such alleged police violence would likely raise tricky questions when Secretary Clinton visits next week, as part of her seven-nation African swing that begins Aug. 5 in Kenya at the 8th U.S. – Sub-Saharan Africa Trade and Economic Cooperation Forum.
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Replicating Singapore in China?
It was one hell of a kicker quote, but it probably summed up the appeal of Singapore’s model of governance for Chinese Communist Party cadres. “The Singapore model of development before democracy is something which suits China,” Lu Yuanli, a Chinese professor who studies Singapore, was quoted by The Straits Times to have said.
When I was back in Singapore on vacation last week, I stumbled on an article that ST carried in its print edition on June 24 about the “Singapore fever” among Chinese government officials. The full article is appended at the end of this entry, because you need to be a subscriber to access ST’s articles online.
Singapore’s system might be premised on too small a scale for China to copy its system entirely, but it can be and has been used as a template by many city officials eager to manage their own cities well. This symbiotic relationship probably started after what the same article called the “Second Wave” of Singapore “fever” after the late Deng Xiao Peng praised Singapore in the early 1990s.
There was the Suzhou-Singapore Industrial Park project that saw some hiccups a few years into its incarnation and then there is the program at Singapore’s Nanyang Technological University that according to the ST article, has trained some 16,000 Chinese city officials.
A Singaporean journalist most recently based in Washington, DC, I am into all things political and economic, particularly stories on how policy affects ordinary people. I also drink tea, love food and films, watch most sports with a vengeance, dig live bands at cafes and always hope to travel more. This is my website and will remain a fairly static online repository of my work.