Just a few months ago Jon Corzine was on the short list to be President Obama's Treasury Secretary, but now he's ignoring a request to testify before a House subcommittee investigating the demise MF Global and setting up a showdown that could have major political implications for the president as his 2012 re-election looms.
The president, of course, is weakest when defending his economic record. Say what you want about the Republican obstructionists in Congress, this president is pretty brain dead on the economy and how to get it moving. His solutions are more of the same -- government stimulus like the one that barely worked back on 2009, and class warfare rhetoric about raising taxes on "millionaires and billionaires," which he considers families making $250,000.
If you want to know why the president is so lame on the economy, consider who from the private sector he surrounds himself with for advice: Jeffrey Immelt, the chief executive of GE, which creates more jobs overseas lately than here in the US: Warren Buffett, the billionaire investor who when he isn't lecturing people on the need for higher taxes, uses every loophole imaginable to avoid paying his fair share, and Jon Corzine, who until recently was the CEO of MF Global.
The president and Corzine are known to be pretty close, and it goes beyond the president's visit to Corzine's swanky midtown Manhattan apartment for a fundraiser or the hundreds of thousands of dollars that Corzine, the former CEO of Goldman Sachs and former New Jersey governor, raised for the president this year.
Corzine is also known to be an administration counselor on economics given his many years on Wall Street.
Don't believe me, listen to vice president Joe Biden who said Corzine helped the administration develop its stimulus program (he wanted it bigger than the originally planned $300 billion; the final package was closer to $1 trillion) while referring to him as "the smartest guy I know in terms of the economy."
The president and the vice president will eat those words one way or another in the coming weeks and months. In a business where optics is everything, consider the following: Now that Corzine has ignored his request to testify before a House subcommittee on investigations regarding his role in the bankruptcy of MF Global, he will likely be subpoenaed since Republicans control the majority of the committee.
When he testifies he will likely plead the Fifth Amendment against self incrimination, because of the raft of civil and criminal investigations swirling around MF Global's bankruptcy.
Corzine's biggest problem is that despite his big time resume, he's actually a pretty lousy manager and economist. He was booted from Goldman because of his poor oversight of the firm's risk taking.
Bad oversight of risk taking is just the beginning of MF Global's problems leading to its implosion several weeks ago: Along with its bankruptcy are the messy little details involving as much as $1.2 billion in customer money still missing from the firm.
Taking the Fifth may be the best move for Corzine since any lawyer will tell you such hearings are built-in perjury traps, but it will be bad for the president, showing once again he doesn't understand the economy and surrounds himself with people who are equally inept.
Janet Tavakoli: Jon Corzine Dodges the Fraud Question
Robert Kuttner: Why Corzine Won't Do Time
Corzine Asked to Testify at Senate Hearing on MF Global Collapse
MF Global a month later and still a mystery
Finkelstein Thompson LLP Investigates MF Global Holding Ltd.
Rating Firms' MF Global Role to Be Explored
MF Global customers get hope; Corzine asked to testify
The face of Wall Street arrogance
More than 1000 MF Global workers let go
Corzine Resigns From MF Global
http://www.youtube.com/watch?v=7skACAsPT5g&feature=fvst
Or smart enough to take advantage of the situation for their own personal gain.
I wonder how many politicians actually believe the wall street folk and bankers really, really like them and consider them BFF's.
The other side is even messier and more criminal, so no, I'm not advocating any right wing alternative by any means. I'm just sayin'... We're so screwed.
Here we have a person, who lost to Henry Paulsen when they were at Goldman Sachs in a power struggle. Who is Jon Corzine?