We are being robbed big-time, but you
can't say we haven't been warned. Not after the release Tuesday of a
scathing report by the Treasury Department's special inspector general,
who charged that the aptly named Troubled Asset Relief Fund bailout
program is rife with mismanagement and potential for fraud. The IG's
office already has opened 20 criminal fraud investigations into the
$700 billion program, which is now well on its way to a $3 trillion
obligation, and the IG predicts many more are coming.
It is often said that the there are
few forces as destructive as the power of bad economics. Rarely has
this been more clearly demonstrated than in the current crisis.
You might think that the reckless, avaricious, giant corporations,
having shrunk the economy, cost millions of jobs and then demanded that
taxpayers be dunned for years into the future for multi-trillion dollar
bailouts, would show contrition, regret, or self-restraint of their
power over Washington.
Goldman Sachs reports better-than-expected profits this quarter. Wells Fargo cleared record profits last week.
The President, understandably, points to signs of hope and encourages
Americans to be optimistic about the economy. But when do we move from
healthy confidence to a confidence game? The banks are reporting
profits thanks to massive infusions of taxpayer bailout funds.
In recent months, Treasury Secretary Timothy Geithner
and other regulatory officials have made much ado about those "toxic"
securities the Wall Street demons concocted by bundling together
thousands of mortgages and dicing them up a dozen different ways to
sell to investors. The big problem, as we've all learned by now, is
that it's next to impossible to figure out what the accursed things are
worth.
As President Obama approaches the 100-day mark of his presidency, he
delivered a
speech
Tuesday at Georgetown University in which he laid out what he sees as
the foundation of a new economy. Using this crisis--and his gift of
oratory--Obama signaled that the fight for the next economy begins
now.
My husband and I just made out a check to the IRS for $5,021. It's more than usual because of solid investment returns in his native Canada, where their quaintly regulated banking system continues to hum along. Normally, though, we don't mind paying our tax bill. We believe that strategic government investment is the way out of this crisis, and we're happy to contribute our fair share.
But this year I cringed as I dropped that check in the mail, thinking about how I might as well have just handed it directly to a Wall Street executive.
"Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs."
In late March, as public outrage over
bonuses paid to executives of bailed-out financial firms exploded,
Citigroup CEO Vikram Pandit met with Senate majority leader Harry Reid.
Accompanying the under-fire CEO to the meeting was Jimmy Ryan, one of
the banking conglomerate's top in-house lobbyists. Ryan was a familiar
face to Reid and his staff. Up until 2003, he was the Nevada senator's
chief counsel, and since then he has remained close to Reid.
