Tim Carney

Tim Carney on Rick Perry: There’s a Difference Between “Pro-Business” and “Pro-Market”

by Ryan Young on August 18, 2011 · 1 comment

in Economy, Politics as Usual

Washington Examiner columnist (and former CEI Warren Brookes Fellow) Tim Carney has a must-read column today on Texas Governor Rick Perry’s economic policies. They appear suspiciously similar to Bush and Obama’s policies:

“I’m a pro-business governor — I don’t make any apologies about it,” Rick Perry told the crowds in Iowa this week. He’s right, but we can get more specific. Perry is pro-Merck, pro-Boeing, pro-Mesa Wind, pro-Texas Instruments, pro-Convergen, and pro-dozens of businesses that donate to his campaigns and hire his aides as lobbyists.

Perry promises to “get Americans back to work,” but his policies — from backroom drug company giveaways to green energy subsidies — eerily mirror the unseemly big business-big government collusion that has characterized President Obama’s presidency. Judging by his record in Texas, Perrynomics might just be low-tax Obamanomics.

Pro-business politicians are a dime a dozen. What the economy needs to recover are more pro-market politicians. Instead of putting their thumbs on the competitive scales to favor one business or another, Congress and the president should allow an open, competitive market process.

That means the rules of the game would be both clear and few; they would also be consistently enforced. Unlike politicians, markets respect no special interest. If they did, no company would bother with a Washington office.

Consumers do a much better job of picking winners and losers than politicians with campaigning and fundraising on the brain. They should be allowed to try it sometime.

What a shame that few politicians are likely to admit that; such is the curse of “do-something” bias.

Tim Carney Knows How Washington Works

by Ryan Young on January 21, 2011

in Deregulate to Stimulate, Economy, Politics as Usual, Regulation

Former Warren Brookes Fellow Tim Carney’s latest Washington Examiner column, “Bail them out, regulate them, then work for them,” is a must-read.

Amy Friend, a former staffer for Sen. Chris Dodd, played a large role in writing the Dodd-Frank financial regulation bill. And she just got a new job at a lobbying firm. Tim explains:

There are two types of people on K Street: access people, who can get you in the door; and policy people, who know what’s on every page of every relevant bill and regulation. Friend is the latter. While business will dry up for other Dodd alumni on K Street, Friend is valuable because — to quote one Republican lobbyist — “she knows what’s on page twenty-three-[bleep]ing-hundred of that bill,” and every other page, too.

In other words, Friend didn’t just write a landmark piece of legislation — she wrote her meal ticket.

Tim doubts that Friend is corrupt. But her story is very common in Washington. Lobbying wouldn’t be such a booming business if regulation wasn’t too. And the revolving door between the Hill and K Street can be very profitable, even when no corruption is involved. Most people forget that regulators act just as self-interestedly as the people they regulate.

LibertyWeek 73: Understanding ‘Obamanomics’

by Richard Morrison on December 14, 2009

in CEI Projects, Podcast

Your hosts Richard Morrison and Jeremy Lott team up with special guest co-host Tim Carney to bring you Episode 73 of the LibertyWeek podcast. We start with the climate crisis in Copenhagen, the legislative tightrope on health care legislation in the Senate and the passing and legacy of economist Paul Samuelson. We continue with the latest pork-filled spending bill and conclude with an interview with Tim Carney, author of the new book Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses (available online and at fine booksellers everywhere).

R.I.P. Bob Novak: 1931-2009

by Gary Howard on August 18, 2009

in Odds & Ends

We have recently learned about the passing of esteemed columnist Robert Novak.  Kenneth Tomlinson has a column paying tribute to Novak today at Human Events online that may sum up how many feel about him.

Throughout my life, I followed Bob Novak journalism like I followed the careers of my favorite sports figures. Later, as editor-in-chief of Reader’s Digest, I would become one of Novak’s nominal bosses, though the fact was that every time I worked with him or was associated with him in any way, it was I who felt privileged. Few journalists have ever affected this country like Bob Novak.

Tim Carney, a former CEI Warren Brookes Journalism Fellow and former Novak reporter, also has a column about Novak today Human Events.  He had  this to say about his former boss:

For many of us, though, Novak’s resistance to the calls for conformity, his constant openness to new ideas and facts, and his willingness to change his mind set a crucial example.

Novak was a friend to CEI’s founder and president Fred Smith, a mentor to a few of CEI’s current and former employees and allies, as well as a journalist well-respected by both sides of the political divide.  Condolences go out to his family.  He will be missed.

Stop Thief! NYT steals Examiner’s AIG scoop with no attribution

by John Berlau on April 17, 2009 · 1 comment

in Bailout Watch, Culture, Politics as Usual, Sanctimony

One week after Washington Examiner ace investigative reporter Timothy P. Carney broke the blockbuster story reporting that American International Group’s post-bailout CEO Edward Liddy owned a large stake in Goldman Sachs. a top recipient of the AIG bailout, the New York Times has decided that this is news “fit to print.” But for some reason, the so-called paper of record didn’t think it was “fit” to give any credit to the original source of this story.

Almost all of the significant details in the Times story  by Mary Williams Walsh, posted last night on its web site, were reported in Carney’s column in the Examiner a week ago (and elaborated on in my post in Open Market): The fact that Liddy — who was installed in his position by former Treasury Secretary Hank Paulson (and with the approval of  then-Federal Reserve Bank of New York President Tim Geithner, a detail not in the Times story!) — still owns more than 27,000 shares of Goldman Sachs that its valued at more than $3 million; and that this represented a potential conflict of interest because Goldman was a counterparty of AIG that got $13 billion from the taxpyer-funded bailout.

The Times even talks to the same AIG spokeswoman, Christina Pretto, who originally confirmed these details for Carney. But the story doesn’t once reveal to Times readers that all this information had already been broken by the Examiner.

It is highly doubtful the Times hadn’t known of the Examiner piece. Earlier, at the prominent financial blog site Ritholtz.com, prominet risk analyst Chris Whalen wrote a commentary on the issue citing both Carney’s piece and my analysis in Open Market.

The Times’ appropriation in its covering of what I had described to Carney as a “looting” of taxpayers and AIG shareholders can, in a sense, be called thievery on top of thievery.

LibertyWeek 38: Pirate Warriors on Deck

by Richard Morrison on April 13, 2009

in CEI Projects, Podcast

Your hosts Richard Morrison and Cord Blomquist are joined by special guest co-host Jeremy Lott for a very swashbuckling Episode 38 of LibertyWeek. We start with the rescue of Capt. Richard Phillips from Somali pirates by the U.S. Navy and Special Forces, look into the murky finances of AIG CEO Edward Liddy in Scandal Watch, and figure out what ISPs are up to in Technology News. We also get an update on how West Virginia is about to become even more Wild and Wonderful, and finally we answer the call for wealthy, multilingual volunteers in Olympic News.

AIG CEO Liddy owns millions in stock in bailout beneficiary Goldman — Tim Carney blockbuster in DC Examiner

by John Berlau on April 10, 2009

in Bailout Watch, Features, Odds & Ends, Politics as Usual

Everyone should read the blockbuster exclusive in today’s Washington Examiner in which Timothy P. Carney confirms that American International Group CEO Edward Liddy — appointed to his position at the behest of Hank Paulson and Tim Geithner after the government takeover of AIG in September — still owns more than $3 million in stock in Goldman Sachs, one of the biggest beneficiaries of the AIG bailout.

I am privileged to be quoted in this article that both breaks news and puts it into an informative policy context. The dogged investigative reporting conducted for this piece by Carney, a former Warren T. Brookes Journalism Fellow at CEI, should be enough to garner him several awards, and in my opinion this piece and likely follow-ups may be Pulitzer Prize-worthy material.

A couple weeks ago, after the brouhaha about the “retention” bonuses paid to the AIG Financial Products employees, Liddy’s calm demeanor before Congress and the media helped diffuse the situation. He emphasized that he was making a nominal $1-a-year salary and argued he was doing the CEO stint merely as a public service. Liddy wrote in a recent Washington Post op-ed that “my annual salary is $1. My only stake is my reputation.”

But Carney found that Liddy was not telling the whole story about his real stake in the AIG bailout. Namely that Liddy, as Carney notes, has “an acute financial stake in one of AIG’s counterparties—namely, his $3.2 million personal investment in Goldman Sachs.” And under Liddy’s direction, AIG disbursed nearly $13 billion from the taxpayer bailout money to Goldman, in a move many say is more disturbing than the employee bonuses that were the source of the recent controversey.

Everyone from former AIG CEO Maurice “Hank” Greenberg to liberal Rep. Brad Sherman, D-Calif., have expressed outrage that Goldman and other banks were compensated at full value for their derivative contracts. Goldman had bought billions in credit deafalt swaps from AIG. Had AIG gone into bankruptcy, Goldman and other counterparties would have almost certainly had to take a “haircut” on the contracts due to declining market conditions.

In the article, Carney generously writes that “there is no reason to believe Liddy is influencing AIG actions to unfairly benefit Goldman.” Yet Liddy had to be aware that many were saying Goldman may not have survived the hit if AIG substantially reduced payment. He resigned his position from Goldman’s board of directors when he became CEO of AIG, ostensibly to avoid conflict of interest, but has not seen fit yet to sell his more than 27,000 shares in Goldman stock, which he is listed as holding in the firm’s 2008 proxy statement. Carney reports that “an AIG spokeswoman confirmed for the Examiner that Liddy still owns all these shares.”

Carney points out the paradox of “strange public-private chimeras like AIG spawned in this age of bailouts.” When it bailed out the firm, the government took an 79.9 percent stake in AIG, making AIG in one sense a government entity. Yet, as Carney points out, this “situation represents a potential conflict of interest that would never be allowed in a government agency.”

It also likely wouldn’t fly in a purely private company, where directors and shareholders are on guard against executives’ “related party transactions” that aren’t in the company’s best interest. Yet, because he is running a public-private hybrid, Liddy lacks accountability to both to private shareholders and government ethics rules

Former Treasury Secretary Paulson, himself a former Goldman Sachs CEO, has a lot to answer for in forcing out AIG CEO Robert Willumstad and bringing on Liddy to replace him. So does Geithner, who was heavily involved in the AIG bailout as president of the Federal Reserve Bank of New York. Why did they not insist that Liddy divest his holdings or find someone who didn’t have this conflict?

Above all, this shatters the illusion that the government can magaically take over a company, fire the CEO, and run it more efficiently for the taxpayers. I have written before on Open Market that Obama’s firing of Rick Wagoner was not the first time the government forced out a CEO. Even before Paulson ousted Willumstad after the bailout, then- New York Attorney General Eliot Spitzer effectively forced out longtime AIG CEO Greenberg on baseless charges that have almost all been dropped. Greenberg built up AIG successful 35-year tenure, and has testified that the issuance housing-related credit defaut swaps at the center of the firm’s problem exploded in the months after he left.

As I tell Carney in concluding paragraph of the story, “The whole AIG experience demonstrates the fallacy that the government can efficiently sack CEOs and replace them.”

Carney on the “Year of the Bailout”

by Ivan Osorio on January 2, 2009 · 2 comments

in Bailout Watch, Economy, Politics as Usual

Following Iain Murray’s farewell to 2008′s bailout-o-rama, Former CEI Brookes Fellow Tim Carney, in his Washington Examiner column, bids farewell to “The Year of the Bailout”:

Americans used to get exorcised any time the federal government considered bailing out private interests. When Chrysler got a $1.5 billion loan in 1979 (about $4.25 billion in today’s dollars), there was an outcry. When the Clinton administration bailed out Wall Street bankers in 1994 with a bailout of the Mexican peso, it was scandalous.

But as 2008 wound down, we got bailouts so large and in such rapid succession that we never had time to catch our breath.

Unfortunately, there’s probably more to come.

For more on bailouts, see the site (co-sponsored by CEI) BeyondBailouts.org.

Happy New Year!