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
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.