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Obama And The TARP

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I always enjoy it when a commentator appearing on a talk show reminds us that President Obama has become a “tool” for the Wall Street bankers.  This theme is usually rebutted with the claim that the TARP bailout happened before Obama took office and that he can’t be blamed for rewarding the miscreants who destroyed our economy.  Nevertheless, this claim is not entirely true.  President Bush withheld distribution of one-half of the $700 billion in TARP bailout funds, deferring to his successor’s assessment of the extent to which the government should intervene in the banking crisis.  As it turned out, during the final weeks of the Bush Presidency, Hank Paulson’s Treasury Department declared that there was no longer an “urgent need” for the TARP bailouts to continue.  Despite that development, Obama made it clear that anyone on Capitol Hill intending to get between the banksters and that $350 billion was going to have a fight on their hands.  Let’s jump into the time machine and take a look at my posting from January 19, 2009 – the day before Obama assumed office:

On January 18, Salon.com featured an article by David Sirota entitled:  “Obama Sells Out to Wall Street”.  Mr. Sirota expressed his concern over Obama’s accelerated push to have immediate authority to dispense the remaining $350 billion available under the TARP (Troubled Asset Relief Program) bailout:

Somehow, immediately releasing more bailout funds is being portrayed as a self-evident necessity, even though the New York Times reported this week that “the Treasury says there is no urgent need” for additional money.  Somehow, forcing average $40,000-aires to keep giving their tax dollars to Manhattan millionaires is depicted as the only “serious” course of action.  Somehow, few ask whether that money could better help the economy by being spent on healthcare or public infrastructure.  Somehow, the burden of proof is on bailout opponents who make these points, not on those who want to cut another blank check.

Discomfort about another hasty dispersal of the remaining TARP funds was shared by a few prominent Democratic Senators who, on Thursday, voted against authorizing the immediate release of the remaining $350 billion.  They included Senators Russ Feingold (Wisconsin), Jeanne Shaheen (New Hampshire), Evan Bayh (Indiana) and Maria Cantwell (Washington).  The vote actually concerned a “resolution of disapproval” to block distribution of the TARP money, so that those voting in favor of the resolution were actually voting against releasing the funds.  Earlier last week, Obama had threatened to veto this resolution if it passed.  The resolution was defeated with 52 votes (contrasted with 42 votes in favor of it).  At this juncture, Obama is engaged in a game of “trust me”, assuring those in doubt that the next $350 billion will not be squandered in the same undocumented manner as the first $350 billion.  As Jeremy Pelofsky reported for Reuters on January 15:

To win approval, Obama and his team made extensive promises to Democrats and Republicans that the funds would be used to better address the deepening mortgage foreclosure crisis and that tighter accounting standards would be enforced.

“My pledge is to change the way this plan is implemented and keep faith with the American taxpayer by placing strict conditions on CEO pay and providing more loans to small businesses,” Obama said in a statement, adding there would be more transparency and “more sensible regulations.”

Of course, we all know how that worked out  .   .   .  another Obama promise bit the dust.

The new President’s efforts to enrich the Wall Street banks at taxpayer expense didn’t end with TARP.  By mid-April of 2009, the administration’s “special treatment” of those “too big to fail” banks was getting plenty of criticism.  As I wrote on April 16 of that year:

Criticism continues to abound concerning the plan by Turbo Tim and Larry Summers for getting the infamous “toxic assets” off the balance sheets of our nation’s banks.  It’s known as the Public-Private Investment Program (a/k/a:  PPIP or “pee-pip”).

*   *   *

One of the harshest critics of the PPIP is William Black, an Economics professor at the University of Missouri.  Professor Black gained recognition during the 1980s while he was deputy director of the Federal Savings and Loan Insurance Corporation (FSLIC).

*   *   *

I particularly enjoyed Black’s characterization of the PPIP’s use of government (i.e. taxpayer) money to back private purchases of the toxic assets:

It is worse than a lie.  Geithner has appropriated the language of his critics and of the forthright to support dishonesty.  That is what’s so appalling — numbering himself among those who convey tough medicine when he is really pandering to the interests of a select group of banks who are on a first-name basis with Washington politicians.

The current law mandates prompt corrective action, which means speedy resolution of insolvencies.  He is flouting the law, in naked violation, in order to pursue the kind of favoritism that the law was designed to prevent.  He has introduced the concept of capital insurance, essentially turning the U.S. taxpayer into the sucker who is going to pay for everything.  He chose this path because he knew Congress would never authorize a bailout based on crony capitalism.

Although President Obama’s hunt for Osama bin Laden was a success, his decision to “punt” on the economic stimulus program – by holding it at $862 billion and relying on the Federal Reserve to “play defense” with quantitative easing programs – became Obama’s own “Tora Bora moment”, at which point he allowed economic recovery to continue on its elusive path away from us.  Economist Steve Keen recently posted this video, explaining how Obama’s failure to promote an effective stimulus program has guaranteed us something worse than a “double-dip” recession:  a quadruple-dip recession.

Many commentators are currently discussing efforts by Republicans to make sure that the economy is in dismal shape for the 2012 elections so that voters will blame Obama and elect the GOP alternative.  If Professor Keen is correct about where our economy is headed, I can only hope there is a decent Independent candidate in the race.  Otherwise, our own “lost decade” could last much longer than ten years.


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The World Holds Its Breath

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January 19, 2009

All over the world, people are waiting with abated breath as the Obama Presidency begins.  Some thought it would never happen.  I have often wondered whether, at the last minute, the Bush-Cheney junta might decide that it does not want to give up its authority.  Would they contrive some sort of “national security emergency” as a pretext for declaring martial law and suspending the Constitution?  Such a tactic would be entirely consistent with what we have seen for the past eight years.  Surely, there must be some provision buried in the so-called “Patriot Act” allowing the Bush-Cheney regime to continue, despite the expiration of its Constitutionally-prescribed existence.  Constitutional restrictions to unlimited executive power have been ignored by the outgoing administration for the past eight years.  Why should now be any different?  My skepticism on this matter will continue until Barack Obama completes his recitation of the Presidential Oath.

In the mean time, there are those who question whether President Obama will really deliver on his promise of change.  From the liberal side of the political spectrum, plenty of opinions have been published (by reputable commentators) expressing apprehension as to what likely will happen and what actually may not happen during Obama’s tenure in the White House.

On January 18, Salon.com featured an article by David Sirota entitled:  “Obama Sells Out to Wall Street”.  Mr. Sirota expressed his concern over Obama’s accelerated push to have immediate authority to dispense the remaining $350 billion available under the TARP (Troubled Asset Relief Program) bailout:

Somehow, immediately releasing more bailout funds is being portrayed as a self-evident necessity, even though the New York Times reported this week that “the Treasury says there is no urgent need” for additional money.  Somehow, forcing average $40,000-aires to keep giving their tax dollars to Manhattan millionaires is depicted as the only “serious” course of action.  Somehow, few ask whether that money could better help the economy by being spent on healthcare or public infrastructure.  Somehow, the burden of proof is on bailout opponents who make these points, not on those who want to cut another blank check.

Discomfort about another hasty dispersal of the remaining TARP funds was shared by a few prominent Democratic Senators who, on Thursday, voted against authorizing the immediate release of the remaining $350 billion.  They included Senators Russ Feingold (Wisconsin), Jeanne Shaheen (New Hampshire), Evan Bayh (Indiana) and Maria Cantwell (Washington).  The vote actually concerned a “resolution of disapproval” to block distribution of the TARP money, so that those voting in favor of the resolution were actually voting against releasing the funds.  Earlier last week, Obama had threatened to veto this resolution if it passed.  The resolution was defeated with 52 votes (contrasted with 42 votes in favor of it).  At this juncture, Obama is engaged in a game of “trust me”, assuring those in doubt that the next $350 billion will not be squandered in the same undocumented manner as the first $350 billion.  As Jeremy Pelofsky reported for Reuters on January 15:

To win approval, Obama and his team made extensive promises to Democrats and Republicans that the funds would be used to better address the deepening mortgage foreclosure crisis and that tighter accounting standards would be enforced.

“My pledge is to change the way this plan is implemented and keep faith with the American taxpayer by placing strict conditions on CEO pay and providing more loans to small businesses,” Obama said in a statement, adding there would be more transparency and “more sensible regulations.”

Meanwhile, there is worldwide concern about what Obama and Secretary of State Hillary Clinton can accomplish in the foreign relations and anti-terrorism arenas.  As discussed in an editorial from the January 18 Times of London:

Mr Obama’s biggest immediate challenge is in Afghanistan.  The president is hoping a troop surge, which he opposed in Iraq, will work. However, the prospect of a military solution in Afghanistan is remote and he may learn that the hard way.  In the meantime, he has to hope Iraq does not flare up again and that the Iran nuclear question remains one for diplomacy rather than military conflict.  His drive for a Middle East peace deal is not the first by a US president and nor will it be the last.

As the sun finally rises over the Obama Presidency, there are still plenty of clouds in the sky.  Does this mean we are in for more turmoil?  Some people might take this as a sign that it’s about to start raining money.

Because He Is A Tool

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November 13, 2008

The “Tool Watch” continues.  In the days after the historic 2008 Presidential election, intrigue abounds as to the future political career of Joe “The Tool” Lieberman.  Lieberman was re-elected to the Senate in 2006 as an Independent candidate (after having lost the Democratic primary to Ned Lamot).  The Tool realized that his betrayal of the Democrats could result in the loss of his many important appointments, should Obama get elected.  Joe had already “sold his soul” to Bush, Cheney and Rove in his quest for re-election.  At that point, he had no choice but to “go for broke” by endorsing John McCain.  However, The Tool went beyond that.  He spoke ill of Obama at the Republican Convention.  He followed McCain around throughout the Presidential campaign, giving rally speeches himself, in addition to serving as McCain’s “nodder” when McCain would question Obama’s patriotism.  The Tool questioned Obama’s patriotism with his own allegations that Obama placed allegiance to the Democratic Party ahead of his allegiance to the country.  The Tool evoked further outrage from Democrats by campaigning for “down ticket” Republicans, while stumping around the country for McCain and Palin.  Now that Obama has been elected President, many Democrats are hungry to avenge The Tool’s malicious acts by stripping him of the appointments earned while in good standing as a member of the Democratic Party.  The most notable of these is his chairmanship of the Senate Committee on Homeland Security and Governmental Affairs.  President-elect Obama has expressed his desire to see Lieberman remain in the Senate Democratic Caucus.  Obama has said nothing about The Tool’s numerous committee and subcommittee memberships or chairmanships.  In keeping with his “No Drama Obama” image, the President-elect appears to have distanced himself from any “blood feuds” involving Lieberman.

My animosity toward The Tool is based on the fact that he is a pathetic ass-kisser.  He knew that his committee appointments would be in jeopardy in the event of an Obama victory.  Accordingly, he didn’t simply endorse John McCain.  He followed McCain around as a stray dog, looking for a new home.  Those of us with the experience of having worked with such people, know that these individuals don’t deserve much in the way of respect.  One of the reasons we enjoy watching “action movies” is because the “ass-kisser” is usually the first person to get killed (by either the hero or the villain).  It seems as though justice and karma are well-served in these movies, when such cretins get their due.

Many people who consider themselves “liberal Democrats” seem anxious to make The Tool an example for future, would-be defectors.  On November 12, MSNBC’s Rachel Maddow expressed her concern that the Lieberman case could set a precedent, regardless of what action the Senate Democrats might take in light of The Tool’s transgressions.  Her November 10 program included an interview with Steve Clemons of The Washington Note website.  Mr. Clemons suggested removing Lieberman from his chairmanship of the Committee on Homeland Security and Governmental Affairs because of the The Tool’s fear mongering on the subject of homeland security throughout the 2008 campaign.  Clemons emphasized the proposition that Lieberman should not be able to use homeland security or national security as a foundation to batter Democrats who want a smarter national security policy.

Rachel Maddow discussed this subject again on November 12, with Indiana Senator Evan Bayh.  Senator Bayh discussed the possibility that Lieberman might be unwilling to suffer the indignity of being stripped of his appointments and thus relegated to the status of backbencher.  Bayh worried that under such circumstances, The Tool  might self-destruct:  resign from the Senate and allow Connecticut’s Republican Governor (Jodi Rell) to appoint a “pure Republican” to replace Lieberman.  To Bayh, this would be a more undesirable alternative than putting up with a traitor.  His logic seems based on the rationale that because Lieberman is such a tool, the Democrats could make him their tool once again.  Bayh suggested a two-part compromise.  First, Lieberman should be allowed to retain his chairmanship of the Committee on Homeland Security with “oversight”.  Bayh pointed out that a committee chairman could be replaced at any time.  If those overseeing The Tool reached the conclusion that he should be ousted, it would only then become appropriate for such action.  The second part of Bayh’s proposed compromise would involve an apology from Lieberman for his antics during the 2008 campaign.  I would like to suggest another alternative.  In the event Lieberman might be unwilling to make such an apology, the Senate Democrats should demand that The Tool have the word “Craftsman” tattooed on his forehead.

Time To Toss The Tool

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November 6, 2008

November 5 (the day after Election Day) left us with a nearly breathless Chris Matthews on MSNBC’s Hardball.  His guests included their correspondent, David Schuster, who had attended the election night speech by Barack Obama in Chicago’s Grant Park.  Schuster described the scene in Grant Park, immediately after the west coast results were announced at 11:00 p.m. (Eastern Time).  Strangers were hugging each other and crying.  This could have only happened in Chicago.  I had been in Grant Park on several occasions to celebrate many a Bulls championship, back in the day when Phil Jackson was coach and Michael Jordan defied the laws of gravity.  The post-championship celebration in Grant Park became a rite of summer:  the weather was just getting nice and Fourth of July was right around the corner.  I still return to Grant Park for the annual Independence Day fireworks show (that actually takes place on July 3) even though I now live a long way from there.  The consensual spirit of Chicago’s people brings life to the theories expressed by Carl Jung.  Myth, archetype and symbol hold important places in the collective soul of that community.

Chicago has its own approach to politics, as well.  The city’s history is rich with tales of “back alley” politics, giving rise to legendary figures and laying waste to contenders.  As a result, I can’t keep my mind off the subject of what might be in store for Senator Joe “The Tool” Lieberman of Connecticut.  The remark by Stephen Colbert during Indecision 2008 on Comedy Central, caught my attention.  After the announcement that Obama had won 64 percent of the vote in Connecticut, compared to McCain’s 35 percent, despite McCain’s unfailing support from The Tool, Colbert wondered:  “Where could the people of Connecticut have learned such disloyal behavior?”  As you may recall:  Lieberman was re-elected to the Senate in 2006 as an Independent candidate (after having lost the Democratic primary to Ned Lamot).  Although they were irked by The Tool’s mercenary act to preserve his own political skin, the Democrats struggled to keep Joe in their “Big Tent”.  The Senate Democratic Caucus (or Conference) currently consists of 49 regular Democrats and 2 Independents, one of whom is Joe “The Tool” Lieberman, who calls himself an “Independent Democrat”.  Prior to the 2008 election, the Democrats had been desperate to maintain their 51-percent majority in the Senate, so they did all they could to make sure The Tool was a happy camper.  All that changed when Barack Obama became the presumptive Democratic Presidential nominee.  Many commentators saw in Obama, not only a winner, but one with long enough coattails to bring more Democrats into the Senate.  The Tool realized that his betrayal of the Democrats could result in the loss of his many important appointments, should Obama get elected.  He had already “sold his soul” to Bush, Cheney and Rove in his quest for re-election.  At that point, he had no choice but to “go for broke” by endorsing John McCain.  However, The Tool went beyond that.  He spoke ill of Obama at the Republican Convention.  He followed McCain around throughout the Presidential campaign, giving rally speeches himself, in addition to serving as McCain’s “nodder” when McCain would question Obama’s patriotism.

It is now time for the Senate Democrats to throw The Tool under The Trash Talk Express, before it departs for that great bus barn in the sky.  It has been widely reported that The Tool is scheduled to meet with Senate Majority Leader Harry Reid, at some point this week.  My familiarity with Chicago politics leads me to believe that on his way to this meeting, The Tool will be alone in a dark alley.  He will reach a spot alongside a blue dumpster and that will be the signal.  Suddenly, Democratic Senators will step out from their positions, in the shadows, to surround him.  The Tool will be cut  … and he will be cut quite thoroughly.  He will be cut from the Senate Committee on Small Business and Entrepreneurship.  He will be cut from the Senate Committee on Homeland Security and Governmental Affairs (where he is Chairman).  He will be cut from the Senate Armed Services Committee.  He will be cut from the Senate Committee on Environment and Public Works, including its Subcommittees on: Clean Air and Nuclear Safety, Private Sector and Consumer Solutions to Global Warming and Wildlife Protection (where he is Chairman).  He will also be cut from the Subcommittee on Public Sector Solutions to Global Warming, Oversight, and Children’s Health Protection. He will be left, writhing on the back bench of the Senate.  “Backbenchers” have no influence to peddle  …  or, perhaps I should say:  They have difficulty raising campaign contributions.

The Tool assumed that by joining himself to McCain’s hip, he could secure the Vice-Presidential nomination or a high-level Cabinet appointment.  This must have appeared as his only route to avoid obscurity.  It didn’t work.

The Tool now has a “date with destiny” somewhere in a dark alley   .  .  .