The entire Congress spent a couple of weeks trying to agree on how to spend $800 billion.
Now Geithner, the financial insider who couldn't figure out how to pay his taxes properly, is busting out a plan to spend $1.7 trillion and no one gets to vote on it???
From this NYT article:
It intends to call for the creation of a joint Treasury and Federal Reserve program, at an initial cost of $250 billion to $500 billion, to encourage investors to acquire soured mortgage-related assets from banks.
A second component of the plan would broadly expand, to $500 billion to $1 trillion, an existing $200 billion program run by the Federal Reserve to try to unfreeze the market for commercial, student, auto and credit card loans.
A third component would involve a review of the capital levels of all banks, including projections of future losses, to determine how much additional capital each bank should receive. The capital injections would come out of the remaining $350 billion in the Troubled Asset Relief Program, or TARP.
In my experience, when bureaucrats ask for dough you can count on the high number, and it might go higher. So, $500 B + $800 B + $350 B + $50 B = $1.7 TRILLION!!!
The $800 B comes from "expanding the $200 B program".
And that $50 B to help "renegotiate" mortgages is also a bank handout. If out Congressmen would represent us mortgages could be "crammed down" by bankruptcy judges. The threat of a judicial reduction in mortgage principal should be sufficient to get banks to start negotiating in earnest.
If this doesn't make you angry, check out what the banks are expected to do in return. First there are the much vaunted pay caps:
The $500,000 pay cap for executives at companies receiving assistance, for instance, applies only to very senior executives. Some officials argued for caps that applied to every employee at institutions that received taxpayer money.
And what are we asking them to do for the money? From another NYT article today re:transparency:
Despite running hundreds of pages in length, the government’s current contracts with TARP recipients contain only two vaguely worded sentences describing what the banks pledge to do for the public in return for tax dollars: They must try to "expand the flow of credit to U.S. consumers and businesses" and they must "work diligently" to help homeowners avoid foreclosures. The documents contain no other requirements for disclosure or use of the federal money.
Per the first article Geithner WAS opposed by other members of the Obama administration who wanted tougher restrictions on pay and tighter controls on banks use of the funds.
He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.
Several notables in the financial sphere have come out in favor of nationalization as the best choice, including Nouriel Roubini.
Roubini said the U.S. government should nationalize the biggest banks because losses will exceed assets, threatening to push them into bankruptcy. The banks could be privatized again in two or three years, Roubini said. The professor reiterated his prediction that U.S. financial losses will more than triple to $3.6 trillion and that global equities will fall 20 percent this year from current levels.
These ruined banks SHOULD be temporarily nationalized. Fire the bad managers, wipe out the share holders, and protect the depositors. Then what is left standing after all the bad assets are written down can be re-privatized/returned to the shareholders. This is pure theft, stealing from U.S. taxpayers to save bankers from the consequences of their bad decisions.
WHY did Geithner prevail?
Is Obama getting PLAYED or PAID?
Responding to lack of evidence charges:
PAID:
University of California $1,123,898 Goldman Sachs $955,223 Microsoft Corp $791,342 Google Inc $782,964 Harvard University $779,460 JPMorgan Chase & Co $642,958 Citigroup Inc $633,418 Sidley Austin LLP $565,788 Stanford University $558,184 Time Warner $542,651 National Amusements Inc $536,235 Wilmerhale Llp $522,792 Skadden, Arps et al $505,074 UBS AG $505,017 Columbia University $502,866 IBM Corp $489,842 Morgan Stanley $483,523 US Government $477,506 University of Chicago $456,209 Latham & Watkins $454,599
PLAYED with a hat tip to emsnews for the relationship charts:
Obama's Economic Advisory Board
Robert Wolf
Mark T. Gallogoly
Charles E. Phillips Jr.
L. John Doerr
Penny S. Pritzker