As others have noted on these blogs, Mike Lux has provided me with, perhaps, the most succinct words written, on a personal level, as to where I'm coming from when I explain why I'm against the current administration's misguided (IMHO) bailout efforts: "
Helping Obama Succeed by Pushing Back."
If you haven't already, I would strongly suggest that you read his entire diary to obtain its full context; but, here are three graphs...
Helping Obama Succeed by Pushing Back
By: Mike Lux
Mon Apr 06, 2009 at 16:00
As I have written several times over the past several months, I think the most important thing progressives can do over the next four years is to help President Obama succeed. Through most of our country's history, if a President didn't succeed, it was bad for himself and his party, but not necessarily for the country. But there have been a couple of times in American history - in the 1860s during the Civil War period and in the 1930s/40s during the Great Depression and World War II - when a President's success was fundamental to our country's success. I believe that our economic crisis is profound enough that now is just such a time.
--SNIP--
Paul Krugman, Dean Baker, Jamie Galbraith, Rob Johnson, George Soros, Leo Hindery, and a variety of other economists and business leaders, who in recent months and years more accurately predicted what was going to happen to the economy than anyone in the government, have convinced me that the Geithner/Summers plan for dealing with the banking and insurance industries is deeply flawed and will not work to help fix our economy. This plan goes to the heart of whether President Obama has a successful Presidency. My belief is that Obama is a smart and progressive guy who will eventually figure out a better path, one that puts these big banks into receivership and break them apart. In the meantime, all of us troubled by the banking plan need to keep pushing him on these issues, for example by joining thousands of our fellow citizens at A New Way Forward rallies on April 11th, and will continue to work with progressive economists, and activists to get better ideas on what to do about our broken banking system into the public debate.
I hope all progressives will do everything they can to help pass the Obama budget, health care, climate change, immigration agendas, and the rest of his progressive transformational policies. But on this banking plan, let's join together to push President Obama in the right direction.
Actually delivered just hours ago, much was also written on these blogs in advance of The Congressional Oversight Panel's report on the TARP program: "Assessing Treasury's Strategy: Six Months of TARP."
Here's the Committee's intro webpage blurb (see link, immediately above):
The April oversight report for COP is entitled "Assessing Treasury's Strategy: Six Months of TARP." In this report, COP offers a preliminary look at Treasury's strategy and offers a comparative analysis of previous efforts to combat banking crises in the past.
Over the last six months, Treasury has spent or committed $590.4 billion of the TARP funds. Treasury has also relied heavily on the use of the Federal Reserve's balance sheet which has expanded by more than $1.5 trillion (not including expected TALF loans) in conjunction with the financial stabilization activities it has undertaken beyond its monetary policy operations. This has allowed Treasury to leverage TARP funds well beyond the funds appropriated by Congress.
The total value of all direct spending, loans and guarantees provided to date in conjunction with the financial stability efforts (including those of the FDIC as well as the Treasury and the Federal Reserve) now exceeds $4 trillion. This report reviews in considerable detail specific criteria for evaluating the impact of these programs on financial markets.
The report has some pretty amazing comments in it--expandijng significantly upon pre-distribution coverage of it--which are quite critical of our government's current efforts to manage our economy, in general.
It's powerful stuff. Incredibly, the report's also quite Progressive in its entirety. It mirrors the positions of quite a few economists (i.e.: Krugman, Stiglitz, et al) who've come under some rather intensive (and, IMHO, totally undue) criticism here in the metaworld by some who seem to have a difficult time discerning many (true) Obama supporters' lack of support for just one plank of our new President's efforts with their otherwise-full embrace of the man for his nearly perfect execution of his job since January 20th. (For the record, I consider myself to be a member of this group, as well.)
Here are some one-liners from the latest (post-report-distribution) story on The Oversight Committee's report, now running on Bloomberg Media: "Congressional Panel Suggests Firing Managers, Liquidating Banks."
Congressional Panel Suggests Firing Managers, Liquidating Banks
By Robert Schmidt
April 8 (Bloomberg) --
"...All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets," the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.
--SNIP--
Warren, in an interview on Bloomberg Television, said yesterday that while "things may be getting a little better" under Geithner, the Treasury still needs to be more transparent about how it is spending the taxpayers' money.
"We still have a long way to go, a very long way," she said.
--SNIP--
In the report, Warren's panel said "it is possible that Treasury's approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth."
--SNIP--
Still, it said a bank liquidation would be "least likely to sap the patience of taxpayers" and "provides clarity relatively quickly" to the markets.
"Allowing institutions to fail in a structured manner supervised by appropriate regulators offers a clearer exit strategy than allowing those institutions to drift into government control piecemeal," the report said.
The story also notes that pursuing criminal charges against some financial services business' managers may be warranted.
Here's a dissenting comment in the report that John Sununu endorsed:
"We are concerned that the prominence of alternate approaches presented in the report, particularly reorganization through nationalization, could incorrectly imply both that the banking system is insolvent and that the new administration does not have a workable plan," the two wrote.
So, if you're having a hard time with folks like myself because we're supporting Warren's sentiments in a document such as this--one which is very critical of both Treasury Secretary Tim Geithner as well as our government's efforts with regard to the bailout in general--take heart because you're not alone. Former White House Chief of Staff and New Hampshire Senator John Sununu and super neocon Congressman Jeb Hensarling--the two Republican members of the Oversight Panel--stand by you 100%. They have formally disagreed with just about everything in it.
According to the conflated rationale of some, I guess that means they stand behind our President 100%, too.