Wednesday, June 24, 2009

Herb Allison: The Man of TARP

The first in an series of articles on Barack Obma's Czars.

Upon being elected President -- and during his State of the Union Address -- Barack Obama made it clear that his priorities were "reforming" health care, expanding education, and changing the way people get their energy. These three areas also reflect the earliest appointments Obama made of "Czars." Little did we know, it was only the beginning. The President has since gone on to make 28 such choices covering an equal number of areas, and there appears to be no end in sight of how many more he might have.

Presidents have appointed Czars for years. They are controversial because they do things, in terms of developing policy, without direct Congressional scrutiny. Historically, Czars were separate from the department that covers the same policy issues. This is not the case in the Obama Administration, who has three Czars who are also serve under other cabinet members. One of those is Herb Allison, who is the Assistant Secretary of the Treasury for Financial Stability or affectionately called the "TARP Czar."

Allison was appointed in April and was just confirmed this month to oversee the bailout program. Born in 1946, Allison graduated from Yale University with a degree in philosophy and went on to get a MBA from Stanford after serving four years in the Navy.

Highlights of his career include:

  • Allison started his professional career in 1971 in the investment industry at Merrill Lynch in New York and worked his way up to COO in 1997.

  • In mid-1999 Allison left to become National Finance Chairman of the McCain for President campaign. In spite of this, Allison has long hedged his political bets, with the Federal Elections Commission showing contributions to both Democrats and Republicans.

  • Next, Mr. Allison became President and Chief Executive Officer of the Alliance for Lifelong Learning, Inc. from 2000 to 2002, a joint venture of Oxford, Stanford and Yale Universities, offering online, college-level courses to adults.

  • In addition, Allison has been a director of Time Warner, on the Advisory Board of the Yale School of Management, on the Advisory Council of the Stanford Graduate School of Business, and the Federal Reserve Bank of New York's International Advisory Committee.

  • He was a director of the New York Stock Exchange from 2003-2005. Recently, Allison also chaired the Business-Higher Education Forum and the Vietnam Education Foundation and served on the Business Roundtable, and the Financial Services Roundtable. Furthermore, he served on the Board of Directors of The Conference Board, the Board of Trustees of The Economic Club of New York, the New York State Commission to Modernize the Regulation of Financial Services, the New York State Commission on Education Reform, and the Council of Graduate Schools Advisory Committee.

  • Former CEO of Fannie Mae during the financial crises of September 2009, until he was approved by the Senate for his new position.

The accountability issues surrounding the duties of a position such as this are vast, ranging to measures on how well TARP is working to questions on how the dollars are being spent. There are also the many constitutional issues that have largely been ignored when it comes to the spending of these dollars. In the end, this position demands Congressional scrutiny, the Administration believes it should be hiding in the White House. Is it any wonder why many are concerned about the rise of the Czars?

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

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