Michael Hirsh

Stories by Michael Hirsh

  • Is the SEC Opening the Floodgates?

    The civil suit brought against Goldman Sachs by the Securities and Exchange Commission on Friday involved just a single transaction and a single executive, and in a conference call with reporters, SEC Enforcement Director Robert Khuzami refused to say how widespread his investigation is. But that doesn't make the case any less significant. Securities-fraud charges related to the subprime debacle have been few and far between until now (plenty of mortgage originators have been indicted, but Wall Street has remained mostly unscathed). By naming the most prestigious firm on Wall Street and a world-famous hedge fund—Paulson & Co.—known for making some of the biggest profits by shorting subprimes, the SEC has signaled that there may be a lot more indictments to come. ...
  • Get Ready for a Replay of Health Care

    After months of awkward bipartisan feelers over financial reform, it’s bench-clearing time at last. That’s pretty much what’s happened over the last few days, especially since Senate Minority Leader Mitch McConnell launched the GOP’s strategic assault on Democratic reform bills by calling them bailouts of Wall Street—eagerly parroting the line put out by GOP pollster Frank Luntz—and Banking Committee Chairman Chris Dodd responded by saying his patience is at an end. On another front, Sen. Blanche Lincoln, chairwoman of the Agriculture Committee, appeared to end her own efforts at compromise with Republican Saxby Chambliss over the regulation of derivatives; she wrote a letter (read it here) assuring progressive Democratic colleagues, Maria Cantwell, Byron Dorgan, and Dianne Feinstein (along with moderate GOP Sen. Olympia Snowe) that she was fully behind a tough bill, one that excludes most exemptions for derivatives “end users.”...
  • Behind the GOP 'Commitment to America'

    Sixteen years after the Gingrich revolution, Rep. Kevin McCarthy is concocting his own multipoint plan to win over America and take back the House.
  • Wall Street's Euro Scams

    Lobbyists are quietly working to ensure the secret derivatives deals behind the euro crisis stay secret.
  • Obama's Budget Delivers Middle-Class Fixes, But Not Nearly Enough

    Set aside the size of the deficit for the moment. (Not that the Republicans will, but after what Obama called their “decade of profligacy” they don’t have much credibility on this issue.) Yes, the budget deficit is unsustainable, but there’s really not much to be done about it in this year of deep recession. The fundamental question is, what will this and subsequent budgets do to regrow America’s middle class? A better question, actually, is do we still have a middle class? Because what we had thought was the middle class in recent years was, we now know, largely an illusion, an inside-the-Beltway fantasy idea kept alive by mountains of household debt. Credit cards. Mortgage refinancings. No-doc loans. That’s all gone with the wind. What’s left? A population that’s either under water or barely keeping its head out of it. The point is: unless we create a new middle class, there will be no chance for us to grow out of this deficit or this crisis.The president’s budget delivers a spate...
  • Barack Hussein Hoover?

    Barack Obama really needs to decide who he wants to be when he grows up. He came into office with Franklin D. Roosevelt as a role model, seeking to save the American economy and the world from another Depression. In some ways, in fact, Obama wanted to outdo FDR: he appointed a Treasury secretary, Tim Geithner, who has consistently warned against making the same mistakes that Roosevelt and the Fed made in 1937, when they cut back on spending and tightened rates before the country had pulled out of its downturn. Now, at a time when many economists say the jobless recovery will remain just that unless there is more federal stimulus, Obama is saying he does, actually, want to go back to 1937, or maybe even 1933. He wants to be Herbert Hoover and focus on deficit reduction.Let’s give Obama the benefit of the doubt and assume that his sudden focus on the projected $1.35 trillion deficit is just more political theater at a time when the president is desperately scrambling to win back the...
  • The End of Wall Street as We Know It

    After ignoring Big Paul for a year, Obama finally listened. The result is the end of Wall Street as we know it.Surrounded by economic heavyweights called into the White House, President Obama announced today before the TV cameras that he wasn’t announcing anything new. At least that’s what his top administration officials indicated to the media in a “background” phone call intended to put the best possible spin on things.  The administration officials declared that the new—whoops, I mean, additional—proposal today was in the spirit of what they themselves had already put forward last June and what the House and Senate, in consultation with the Obama-ites, had already inserted in their bills.That’s the official story. It’s utter nonsense. The actual story is that today’s proposal is totally new, far more radical than anything Obama and his top officials, mainly chief economic adviser Larry Summers and Treasury Secretary Tim Geithner, have proposed in the past. Indeed, they’ve been...
  • Jim Jones's Secret Trip to Pakistan

    Only hours before President Obama took off for Asia on Thursday, his national-security adviser landed in Pakistan on an unannounced trip to meet with senior Pakistani officials, a White House official said. Jim Jones is "going to continue the discussions that Secretary [of State Hillary] Clinton had" on her own recent visit, said the official, who would talk about the trip only on condition of anonymity. Jones plans to fly on to Asia afterward to join the president on his nine-day trip to Japan, Singapore, China, and South Korea....
  • Iran Reverses Itself on Oct. 1 Geneva Concessions

    After Iran agreed to nuclear concessions on Oct. 1, President Obama said it was a "constructive beginning." But now, U.S. officials and Western diplomats say, Tehran is backtracking. With a year-end deadline approaching to show progress on nuclear talks, the U.S. and its European allies are likelier to call for more sanctions. Tehran's reversal began, NEWSWEEK has learned, at an Oct. 28 discussion between Iran's chief nuclear negotiator, Saeed Jalili, and Javier Solana, the top Western negotiator, says a European diplomat who was briefed on the internal talks but would speak only on condition of anonymity. Jalili insisted the U.S. and Western powers negotiate from a vague, four-and-a-half-page proposal Tehran submitted Sept. 9 that didn't raise the topic of Iran's nuclear program at all (it only generally addressed "security and economic" issues). At the time, the Obama administration called the proposal unacceptable. The diplomat describes it as "a lot of blah-blah," adding, "They...
  • Volcker: Bernanke Didn't Go Far Enough

    Paul Volcker saw Barack Obama as an "agent for needed change" when the former Federal Reserve chairman endorsed him for president in January 2008. But lately Volcker has been feeling a bit ignored by the White House, and thinks that Obama isn't changing Wall Street enough to avert another subprime disaster. Last week the current Fed chief, Ben Bernanke, came up with a proposal to make big banks behave: he pledged to change the way the nation's top 28 banking companies pay their executives, removing incentives for short-term gains and "working to ensure that compensation packages appropriately tie rewards to longer-term performance."But Bernanke didn't go nearly as far as Volcker says we should. Volcker wants to keep major commercial banks that enjoy federal-deposit guarantees away from big-time speculative trading. "They shouldn't be doing risky capital-market stuff," Volcker told NEWSWEEK before the Fed announcement. But, he adds, the president "obviously decided not to accept" his...