mykeystrokes.com

"Do or Do not. There is no try."

“Jeb Bush’s Big Lehman Brothers Problem”: Jeb Won’t Tell You What Jeb Did Exactly While Working On Wall Street

Jeb Bush says he released 33 years of tax returns this week because he wants to be the most transparent candidate to run for president in 2016. But if that’s really the case, why is he continuing to obfuscate some of his most lucrative and potentially controversial business dealings he had before announcing his candidacy, like his work as an “adviser” for investment bank Lehman Brothers?

So, if Jeb won’t tell you what Jeb exactly did while working on Wall Street, in the interests of transparency and disclosure, I will try.

Not much is known about what Bush actually did for Lehman—the firm that went belly-up in 2008 and sparked the wider financial crisis, and Barclays, the bank that purchased Lehman out of bankruptcy and continues to work out of its midtown Manhattan headquarters. He began working for the former after his term as Florida governor ended in 2007, and continued working for the latter until the end of 2014, when he decided to run for president.

The two banks were his biggest sources of income in recent years: Bush earned more than $14 million working for Lehman and then Barclays, which based on my understanding of simple math accounted for nearly half of the $29 million he made after he left government. Yet in Tuesday’s disclosure, and even in many of his public comments, Bush has downplayed his work for the two banks.

“I also was hired as a senior advisor to Barclays where I advised their clients on a wide range of global economic issues with a mind towards navigating government policies,” he writes in an essay that accompanied the tax returns. It is the only sentence that refers to his time at Barclays. And he doesn’t mention Lehman at all.

In recent weeks I’ve interviewed numerous Wall Street executives about Jeb Bush, and his role at both firms. What emerges is a portrait of a bank “adviser” who operated more like a high-level investment banker.

A spokeswoman for Bush declined to provide specifics about his work for the banks other than point to various media accounts, including those by this reporter. But Bush, according to people with direct knowledge of his activities, helped the firm look for business from well-heeled clients, including everyone from hedge funds to billionaire investors like Carlos Slim Helu, the Mexican business magnate widely regarded as the world’s richest man.

And, in at least one instance, he appears to have been Lehman’s go-to man for an emergency investment during the 2008 financial crisis.

In his seven years working for both banks, Bush was paid handsomely for this work, but he was also thrust into several awkward situations. A couple of years ago, he met with executives from the Minneapolis-based hedge fund Whitebox Advisors, a major Barclays client. Bush was supposed to be providing high-level insight into economic issues for the big hedge fund, which was one of a handful that correctly predicted the mortgage meltdown that eventually led to Lehman’s collapse.

But according to people who were present, the meeting soon turned uncomfortable when Whitebox’s chief executive, Andrew Redleaf, began to openly browbeat Bush on his brother’s record as president, including his handling of the Iraq War.

A spokeswoman for Redleaf declined to comment but would not deny the account; a spokeswoman for Bush had no comment.

One investment banker who has direct knowledge of Bush’s work for Lehman and Barclays says over the past seven years, the former governor has had “dozens and dozens and dozens” such meetings with clients and prospective clients of Lehman and Barclays. One of those clients included Slim, the Mexican billionaire, which looms as one of the most controversial aspects of Bush’s private business dealings. This is because, if accurate, it shows how closely Bush worked with Lehman officials during the firm’s final days.

According to former Lehman executives and various news reports, Bush met with Slim to ask him to make an investment in the firm in the summer of 2008. The investment never happened, and Lehman, famously, filed for bankruptcy in September of that year.

Bush campaign spokeswoman Kristy Campbell seems to deny at least some of this account. “Governor Bush met with Carlos Slim. It was regarding a specific telecom project,” she said in an email. “It was not regarding [a] general Carlos Slim infusion of cash to save Lehman Brothers.”

She would not deny, however, that this investment could in some way have helped prop up Lehman Brothers. In fact, Campbell also refused to outright deny past media reports, including this one in The New York Times, which cites emails explaining how Bush was involved in something called “Project Verde,” a firm-wide effort to get an investment from Slim and potentially help save Lehman from collapse in 2008.

Indeed, former Lehman executives say senior executives at the firm had discussed using Bush as a direct conduit to policymakers—including those reporting to his brother, who was president during the financial crisis—as Lehman was sinking further into insolvency and regulators balked at including the firm in their broader bailout packages.

Campbell says Bush never intervened with people reporting to his brother. “I do want to be very explicit on one point: Governor Bush was never asked to contact his brother’s administration regarding Lehman, and if he had been asked, would not have done it,” she said in an email.

Don’t expect to find any of what I’m reporting here when Bush releases a more detailed financial disclosure form in a few weeks with federal election officials. Given Lehman’s role in the 2008 financial meltdown, it’s easy to see why the former governor would like people to focus on what he billed the other day as the “broken tax system that’s one of the most convoluted and anti-growth in the world” rather than the work he did that earned him millions and forced him to pay into that broken tax system.

It’s of course hard to argue that Bush shouldn’t earn a living from his contacts in business that he made in government (Bush stated he never lobbied on behalf of a company) or inherited through his family connections. This is especially true when you consider the hyper-sleaze of Hillary Clinton, the likely Democratic nominee, who became a mega millionaire almost overnight by constructing possibly the most conflicted political-business-charity machines in modern political history.

But as an avowed small-government conservative, you would think Bush would know all about corrosive effects of crony capitalism, where executives at the big banks sit at its epicenter, ready to call in favors from politicians who in turn can help make those executives make a lot of money. For that reason, it’s time for Jeb to fess up about all the work he did for Lehman and Barclays. Only then can he brag that he’s acting “in the spirit of transparency.”

 

By: Charles Gasparino, The Daily Beast, July 3, 2015

July 5, 2015 Posted by | Financial Crisis, Jeb Bush, Lehman Brothers | , , , , , , , | 1 Comment

“Which Interests Does He Have In Mind?”: Jeb Bush Says He’s Going To Tackle Special Interests In Washington. Don’t believe Him

Jeb Bush didn’t just release 33 years of his tax returns this week. He also had his campaign create a snappy online presentation, complete with graphs, to help everyone understand them. In the accompanying narrative there was one line that caught my eye. While he may have made millions after leaving the Florida governor’s mansion, Jeb wrote, he didn’t debase himself by doing any lobbying. “That was a line I drew and it was the right one. And it’s a line more people should be drawing in Washington, D.C., where lobbying has become our nation’s premier growth industry. And this culture of special interest access is a problem I plan to tackle as President.”

I don’t know about you, but I’m eager to hear more. How exactly will Bush tackle the culture of special interest access? Does he have some strict new rules in mind to lock the revolving door between government and business? Or will it be merely the power of his personal integrity that will keep those dastardly special interests from getting what they want?

Bush might surprise us, but if I had to guess I’d say this is something he’ll pay lip service to during the campaign, but then do little or nothing about if he actually becomes president. He’d be following a well-worn path if he does — candidates always say they’re going to change Washington’s culture and reduce the power of special interests, but somehow they never do.

That’s in large part because the institutions, norms, and relationships of Washington, D.C., are so firmly entrenched that one administration can’t do too much about them. And whatever kind of reform a president might have in mind, it’s always secondary to the policy goals any administration has, so it’s easy to put it to the side in favor of more pressing issues.

While some might like to shut the doors of the Capitol to lobbyists, that’s impossible — their work is protected by the First Amendment, which after mentioning freedom of religion, speech, the press, and assembly, says that we all have a right “to petition the Government for a redress of grievances.” And though there’s plenty of petitioning going on and plenty of grievances crying out for redress, there has actually been a slight decline in the number of registered lobbyists in recent years: While the number peaked at 14,829 in 2007, last year it fell to 11,800. The drop may be due to any number of reasons, but one lobbyist friend told me he was leaving the business because a divided government means there just aren’t enough bills being passed to lobby about.

Even when they make a sincere effort, presidents have trouble transforming Washington culture. When Barack Obama took office, he announced that no registered lobbyists would be allowed to serve in his administration. That probably helps explain the reduction in registered lobbyists, since many Democrats hoped to get a job with the administration one day, but few people believe the rule has seriously diminished the influence of special interests. After all, the administration found over and over that people it wanted to hire had lobbyist pasts, so it kept making exceptions.

On the flip side, there are public-spirited people who claim they have been shut out by the administration for being the kind of registered lobbyists we would presumably want more of. We’re talking about people who lobbied for causes like domestic violence prevention and environmental protection.

Which brings up the question: How special does an interest have to be before it’s problematically special? When we hear that term, it’s always said with disdain, assuming that somebody’s getting something they don’t deserve. In practice, though, we think of only the interests we don’t like as the ones who shouldn’t have influence.

You could look at it this way: You just need to pick the constellation of special interests you prefer, and vote accordingly. Would you rather that labor unions, environmental groups, and civil rights organizations had the ear of the government, or oil companies, anti-abortion groups, and the NRA? They’re all special interest groups to one degree or another, even if they all believe that what’s good for them is good for America. Chances are that if you dislike a politician for being beholden to special interests, what really turns you off is which interests she listens to.

Of course, that tells only part of the story. Some of the most effective special interest influence is exercised in ways that don’t make headlines, on behalf of interests most people know little about, and much of that isn’t partisan. For years before the financial crisis of 2008, the banking industry was acknowledged by many as the single most effective special interest lobby in Washington, in part because the congressional committees that had oversight of the industry were basically in the industry’s pocket — and that applied to both Republicans and Democrats.

The truth is that special interests are always going to get what they want to at least some degree, because that’s just the nature of special interests. When you have a particular interest in something — let’s say you’re a defense contractor who really wants the government to fund your new fighter plane — you’re going to marshal all kinds of resources to make it happen. The rest of us may have a diffuse interest in the plane not being built, if it’s a boondoggle. But we probably won’t organize to fight it, and our voices won’t be heard by those making the decision.

I’m not arguing for cynicism, or saying that every administration is equally steeped in the kind of legalized corruption that is endemic to Washington. But when a politician tells us he wants to get rid of the special interests, we ought to ask him which interests he has in mind, and exactly how he’s going to go about it. Because chances are it’s little more than posturing.

 

By: Paul Waldman, Senior Editor, The American Prospect; Contributor, The Week, July 2, 2015

July 5, 2015 Posted by | Jeb Bush, Lobbyists, Special Interest Groups | , , , , , , , | Leave a comment

“Jeb Bush Didn’t Build That”: He Made His Money The Bush Way, By Trading On His Family Name

The article of the day is this detailed exploration of Jeb Bush’s complicated history in business by Robert O’Harrow and Tom Hamburger, which explores Bush’s talent for hooking up with people who turned out to be fraudsters and con artists and looks at how he became rich during the times when he wasn’t serving in public office. What does this history tell us about the kind of president Bush would be? We have to be careful about how we answer that question.

Bush likes to tout his experience in business as one of the reasons he’s well-qualified to be president, so the kind of experience he had is certainly worth examining. But as of yet, he hasn’t really shared the insights he gained about the economy that are unavailable to those who have not been so deeply involved in the world of commerce. And while it’s certainly interesting that he found his way to partner with multiple “dubious characters,” as the article describes them, there’s not much reason to believe that he was some kind of shady operator himself. But he did make his money the Bush way: by trading on his family name and the perception that because of who his father was (or later, because of who his brother was), he would have far-reaching influence that could help other people make money. For instance:

For a time, Bush also sat simultaneously on the boards of six corporations, including health industry giant Tenet Healthcare, earning as much as $3 million in fees and grants of stock, according to a Post analysis of financial documents. He also made more than 100 speeches at $50,000 or more per appearance, according to a New York Times report.

In June 2007, Bush signed on as an adviser to Lehman Brothers, the financial services giant. When Lehman was on the verge of collapse during the mortgage-meltdown crisis the next year, Richard S. Fuld Jr., Lehman’s beleaguered chief executive, asked Bush to use his cachet and reach out to Mexican billionaire Carlos Slim Helu, then the second-richest man in the world, the New York Times reported.

That effort failed. When the London-based Barclays bank bought Lehman’s North American operations, Bush moved to that firm as a senior financial consultant. He made $1 million a year, the Times said.

I’d be interested to hear the conservatives who are outraged by Hillary Clinton making millions in speaking fees explain how this kind of thing is completely different. After all, in both cases, people tossed large sums of money at the politician in question not because of his or her skills, but because of his or her identity. Again and again, companies found it in their interest to have Jeb Bush as a partner, consultant or board member, and it wasn’t for his technical expertise in their particular line of work. For instance, I’m pretty sure I know about as much about manufacturing prefabricated building panels for emergency housing as Bush did in 2007, i.e. nothing, but nobody’s offering to pay me $15,000 a month for “advice” on their prefabricated building panel business, as a company called InnoVida did for Bush.

That doesn’t make him a criminal. If a bunch of corporations wanted to put me on their boards, where I’d make millions for doing almost nothing, I might take them up on it, too. It’s only problematic if Bush thinks that experience has really taught him how the economy works.

I’ve long held that there are few more ridiculous characters in politics than the person who comes before the voters and says, “Vote for me, because I’m not a politician, I’m a businessman” (there are a couple of them running against Bush in the GOP primaries). It’s akin to someone saying, “I’m the person who can fix your leaky pipes, because I’m not a plumber, I’m a podiatrist.” Bush isn’t quite like those people, because he’s not offering his business experience as the sum total of his preparation for the presidency. But if he’s going to say that his business experience gives him a valuable perspective on matters economic that will produce different decisions than those other candidates make, let’s hear how.

As of yet, Bush hasn’t released a detailed economic plan. He has said that if he’s elected, he’ll have the economy growing at a consistent rate of 4 percent per year, which would make him far and away the most economically successful president in recent American history. In other words, at the moment his plan is essentially, “Elect me, and it’s puppies and rainbows for everyone.”

It’s possible that when he finally releases the details, Bush’s program will be so creative and transformative that it will blow everyone’s mind — and only a guy who had worked making deals for water pumps in Nigeria and real estate in Florida could have devised it. On the other hand, it might be pretty much what every other Republican advocates: cut taxes, cut regulations, await glorious new dawn of prosperity. I know which one I’m betting on.

 

By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, June 29, 2015

July 3, 2015 Posted by | Economic Policy, GOP Presidential Candidates, Jeb Bush | , , , , , , , , | Leave a comment

“Voodoo, Jeb! Style”: Mr. Bush Imagines That He Is Privy To Secrets That Have Evaded Everyone Else

On Monday Jeb Bush — or I guess that’s Jeb!, since he seems to have decided to replace his family name with a punctuation mark — finally made his campaign for the White House official, and gave us a first view of his policy goals. First, he says that if elected he would double America’s rate of economic growth to 4 percent. Second, he would make it possible for every American to lose as much weight as he or she wants, without any need for dieting or exercise.

O.K., he didn’t actually make that second promise. But he might as well have. It would have been just as realistic as promising 4 percent growth, and considerably less irresponsible.

I’ll get to Jeb!onomics in a minute, but first let me tell you about a dirty little secret of economics — namely, that we don’t know very much about how to raise the long-run rate of economic growth. Economists do know how to promote recovery from temporary slumps, even if politicians usually refuse to take their advice. But once the economy is near full employment, further growth depends on raising output per worker. And while there are things that might help make that happen, the truth is that nobody knows how to conjure up rapid productivity gains.

Why, then, would Mr. Bush imagine that he is privy to secrets that have evaded everyone else?

One answer, which is actually kind of funny, is that he believes that the growth in Florida’s economy during his time as governor offers a role model for the nation as a whole. Why is that funny? Because everyone except Mr. Bush knows that, during those years, Florida was booming thanks to the mother of all housing bubbles. When the bubble burst, the state plunged into a deep slump, much worse than that in the nation as a whole. Taking the boom and the slump together, Florida’s longer-term economic performance has, if anything, been slightly worse than the national average.

The key to Mr. Bush’s record of success, then, was good political timing: He managed to leave office before the unsustainable nature of the boom he now invokes became obvious.

But Mr. Bush’s economic promises reflect more than self-aggrandizement. They also reflect his party’s habit of boasting about its ability to deliver rapid economic growth, even though there’s no evidence at all to justify such boasts. It’s as if a bunch of relatively short men made a regular practice of swaggering around, telling everyone they see that they’re 6 feet 2 inches tall.

To be more specific, the next time you encounter some conservative going on about growth, you might want to bring up the following list of names and numbers: Bill Clinton, 3.7; Ronald Reagan, 3.4; Barack Obama, 2.1; George H.W. Bush, 2.0; George W. Bush, 1.6. Yes, that’s the last five presidents — and the average rate of growth of the U.S. economy during their time in office (so far, in Mr. Obama’s case). Obviously, the raw numbers don’t tell the whole story, but surely there’s nothing in that list to suggest that conservatives possess some kind of miracle cure for economic sluggishness. And, as many have pointed out, if Jeb! knows the secret to 4 percent growth, why didn’t he tell his father and brother?

Or consider the experience of Kansas, where Gov. Sam Brownback pushed through radical tax cuts that were supposed to drive rapid economic growth. “We’ll see how it works. We’ll have a real live experiment,” he declared. And the results of the experiment are now in: The promised boom never arrived, big deficits did, and, despite savage cuts to schools and other public services, Kansas eventually had to raise taxes again (with the pain concentrated on lower-income residents).

Why, then, all the boasting about growth? The short answer, surely, is that it’s mainly about finding ways to sell tax cuts for the wealthy. Such cuts are unpopular in and of themselves, and even more so if, like the Kansas tax cuts for businesses and the affluent, they must be paid for with higher taxes on working families and/or cuts in popular government programs. Yet low taxes on the rich are an overriding policy priority on the right — and promises of growth miracles let conservatives claim that everyone will benefit from trickle-down, and maybe even that tax cuts will pay for themselves.

There is, of course, a term for basing a national program on this kind of self-serving (and plutocrat-serving) wishful thinking. Way back in 1980, George H.W. Bush, running against Reagan for the presidential nomination, famously called it “voodoo economic policy.” And while Reaganolatry is now obligatory in the G.O.P., the truth is that he was right.

So what does it say about the state of the party that Mr. Bush’s son — often portrayed as the moderate, reasonable member of the family — has chosen to make himself a high priest of voodoo economics? Nothing good.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, June 19, 2015

June 21, 2015 Posted by | Economic Growth, Economic Recovery, Jeb Bush | , , , , , | Leave a comment

“Does Jeb Bush Know Anything?”: There’s Something A Little Odd About Running A “Who’s To Say?” Campaign

Jeb Bush has worked in politics for 35 years, and has been a potential presidential candidate for at least 10, but there’s still so much he doesn’t know. He doesn’t know what’s causing climate change. He doesn’t know whether the Iraq war was a good idea. He doesn’t know if a racist shot up a church because black people were in there. There’s something a little odd about running a “Who’s to say?” campaign for a job that by definition answers that question with “me.”

On Friday, Bush said of the Charleston church shooting, “I don’t know what was on the mind or the heart of the man who committed these atrocious crimes. But I do know what was in the heart of the victims.” We don’t have all the facts about this terrible crime. But the alleged shooter, Dylann Roof, appears to be an open book. He wore the flags of the racist governments of Rhodesia and apartheid South Africa. He used racial slurs. He said he wanted to start a “civil war.” So while Jeb is technically right that you can never know exactly what’s in another person’s head at any moment, there’s enough evidence of Roof’s motivations to hazard a guess. But not Jeb, not even when a Huffington Post reporter caught him in a hallway and pressed him on the question:

Huffington Post: Mr Bush do you believe the shooting was racially motivated?

Bush: It was a horrific act and I don’t know what the background of it is, but it was an act of hatred.

Huffington Post: No racially motivated?

Bush: I don’t know! Looks like to me it was, but we’ll find out all the information. It’s clear it was an act of raw hatred, for sure. Nine people lost their lives, and they were African-American. You can judge what it is.

You can judge, just please don’t make Jeb Bush do it!

In many cases, admitting your own ignorance is an act of bravery. For Jeb Bush, it’s probably the opposite. Today’s Republican presidential candidate has to take conservative positions to win the nomination and then, just a few months later, moderate them to appeal to swing voters. So you could imagine he might see an advantage in a different tactic: claiming you just don’t know what to think in the primary and then come to an understanding in the general.

Whatever the reason, “I don’t know” is one of Bush’s favorite phrases. Here are some of the many things he should probably know about but doesn’t.

On whether the federal government should enforce laws against marijuana in states that have legalized it:

“In medical marijuana states? I don’t know. I’d have to sort that out.” – August 15, 2014.

On whether man is causing climate change:

“I’m a skeptic. I’m not a scientist. I think the science has been politicized.” – July 8, 2009.

“I don’t think anybody truly knows what percentage of this is man-made and which percentage is just the natural evolution of what happens over time on this planet.” – May 21, 2015.

On whether he would have invaded Iraq, knowing what we know now:

“Yeah, I don’t know what that decision would have been, that’s a hypothetical.” – May 12, 2015

On whether “religious freedom laws” that allow discrimination against gays are a good thing:

“I don’t know about the law, but religious freedom is a serious issue, and it’s increasingly so, and I think people that act on their conscience shouldn’t be discriminated against, for sure.” – March 19, 2015.

On whether the Florida legislature should compromise and accept the Medicaid expansion:

“I don’t know. That’s their job, frankly. Expanding Medicaid without reforming it is not going to solve our problems over the long run.” – April 16, 2015.

On whether Hillary Clinton should turn over the private server that stored her State Department emails:

“I don’t know. I don’t know what the laws are. I think being clear and transparent in a world of deep disaffection where people don’t trust folks is the right thing to do.” – March 26, 2015.

On a potential Sarah Palin presidential candidacy:

“I don’t know what her deal is.” – February 24, 2010.

On the quality of his own potential candidacy:

“I have no clue if I’d be a good candidate, I hope I would be.” – December 14, 2014.

On the quality of his own potential presidency:

“I think I could serve well as president, to be honest with you. But I don’t know that either.” – December 14, 2014.

 

By: Elspeth Reeve, Senior Editor, The New Republic, June 19, 2015

June 21, 2015 Posted by | Charleston SC Shootings, GOP Primaries, Jeb Bush | , , , , , , , , | 2 Comments