S&P: Torches and Pitchforks


The Obama administration retaliates with a fraud suit . . . or is it a fraudulent suit? 

Andrew C. McCarthy writes:  A dour President Obama was in no mood to hear about Wall Street’s troubles. “My administration is the only thing between you and the pitchforks,” he warned a room full of the nation’s banking titans.

They’d been summoned to the White House woodshed over what Dear Leader had decided was excessive compensation for industry execs. The president had been on the job for less than three months, but his community-organizer roots were already showing: the fraudulent narrative — in this instance, “income inequality” — helped along by whatever arm-twisting the occasion required. The narrative camouflages execution of the statist game-plan: (1) government creates problem, (2) government locates scapegoat, and (3) government exploits scapegoat to juxtapose itself as savior — rationalizing more regulation and more power.


The pitchfork imagery leapt to mind this week because Timothy Geithner, Obama’s tax-challenged former Treasury secretary, was back in the news — specifically, the extortion news. Turbo Tim had been in the room back in 2009, absorbing the boss’s lesson in Alinsky-style government-corporate relations. Now we learn, at least according to Standard & Poor’s top honcho, that Geithner made the Obama method his own.

In an affidavit filed in a California federal court, S&P chairman Harold McGraw III alleges that on August 8, 2011 — i.e., when the Obama reelection campaign was gearing up — Geithner tracked him down by phone. The then-secretary was irate because, three days earlier, S&P had downgraded the credit rating of the United States to a notch below triple-A for the first time in history. McGraw had been forewarned by a Geithner associate that the secretary “was very angry at S&P.” When the two men finally spoke, Geithner ripped McGraw for having “done an enormous disservice to yourselves and to your country.” He further warned that S&P’s insolence — er, I mean, S&P’s decision — would “be looked at very carefully” and would prompt “a response from the government.”

That “response” came in the form of a punitive lawsuit, brought by the government against S&P. At least that’s the way S&P sees it, with what appears to be ample reason.

McGraw, it is worth noting, is hardly a tea-partying Obama basher. He runs in the Geithner-trod circles of international finance and, in 2009 — at around the same time the president held his sweat session with the bankers — Obama made McGraw his appointee to the U.S.-India CEO Forum. While there is not likely to be a recording of the phone call with Geithner, it seems a stretch to think McGraw made the whole thing up. The statement submitted in the lawsuit this week is under oath — i.e., subject to penalty of perjury if proven false. McGraw also recalls immediately telling colleagues about it, suggesting there are probably contemporaneous notes corroborating his account….

Read the rest…

National Review Online

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