Bailout Failing…Time for Summers?
November 12, 2008
by Amy Siskind
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- Treasury Secretary Henry Paulson
Today at a press conference, current Treasury Secretary Henry Paulson spoke gravely about the bailout that he and Bernanke sheparded through our government a few weeks ago. To make a long story short, the bailout is not working.
The premise of the original bailout was that the government would buy back troubled mortgage securities from our country’s financial institutions in order to free up money for these financial institutions to lend. The program called “TARP” or Troubed Asset Relief Program was heralded by Paulson, Bernanke, President Bush, Rep. Pelosi, Sen. Reid and a host of others as the way forward.
Problem is, the premise on which TARP was based was faulty from the get-go. The same issues that prevented financial institutions from being able to mark-to-market their problem loans, made it equally impossible for the government to arrive at a valid market price to buy these loans. After the drama and national scare campaign that we witnessed starting in mid-September, which led to $700 billion of tax payer money being allocated TARP, today Paulson admitted that not a cent has been spent for this program.
Rather, a visibly shaken Paulson explained that the government has spent almost all of the first $350 billion allocation on buying the equity of our financial institutions. Additionally, many non-banks are trying to become banks in order to get their hands on these funds such as American Express, which yesterday officially became a “bank.” The big three auto makers (GM, Ford and Chrysler) are also on the brink of bankruptcy and are lining up hat in hand looking for part of the $700 billion.
Wall Street meanwhile is losing confidence in Treasury Secretary Paulson. The DOW lost 411 points today and retested its low of October 2008. There is seemingly no good news. Paulson looked like a shadow of himself today and many question why he even gave the press conference when clearly he is at a loss as to what to do.
Enter Larry Summers? Is this the best person that President-Elect Obama can put forward to save us from the pending financial crisis? Summers is an unpleasant distraction that is hardly needed in this time of crisis. There are hundreds of qualfied women and men who could be put forward by Obama who come without baggage. This is a serious time for our country and we need serious and capable leadership.
These banksters have got us right where they want us.
Paulson is a great actor and a soldier of fortune to the end. He was paraded out to divert some attention away from the looting going on behind the scenes.
In this article, Bloomberg news reports on a Freedom of Information Request (FOIA) filed by the news service to demand that the Federal Reserve disclose the recipients of OUR tax dollars. The Fed refused to release the information.
Most people are focused on the $700 Billion bailout but over $2 Trillion has already been paid out and there is absolutely no oversight.
This is the death of capitalism people. We have long lived under the mixed economy of the Federal Reserve and Bretton Woods, but they are going for broke this time.
Oh, and please don’t forget. Obama voted for the bailout.
hmm… link didn’t work
here it is again
http://www.bloomberg.com/apps/.....ngFPgq7r3M
or just search for:
bloomberg foia fed
I thought Obama was all about “change” so why do we keep seeing the old guard on his list of appointments (or list of possible appointments)? Biden as VP was the first sign that Obama is going to appoint the Washington Good Ole Boys and the only change will be what is left in your pocket.
I’m still trying to figure out why so many people believe a single person, a man no less, is going to “fix” the economy, this entwined conglomerate that’s woven and wired globally. Talk about a foundation of patriarchy: one man is going to fix it all. We can’t return to what we had and it is more about adapting to the new reality and the limitations. Our industrial base is too eroded to return to the pipe dream days of people with 40K incomes owning 200K houses, as if Obama can simply recall manufacturing jobs from Mexico and other 3rd world nations. Housing, banking, automotive – when they suffer, non-goods producing elements of the economy are going to pay the price with savaged budgets.
[...] Pelosi , Sen. Reid and a host of others as the way forward. Problem is, the premise on which TARP was based was faulty from the get-go. The same issues that prevented financial institutions from being able to mark-to-market their problem …[Continue Reading] [...]
I hope Obama finds some new blood. These old guys are over the hill. It is bad enough to have to live with Biden when there were so many really strong women in the party.
I think all those “good old boys” got us where we are.
I have very high hopes for Obama to bring in outside the beltway people.
We women are seeing our 401ks disappear and credit card rates going to 35% (Advanta) and they are using this money for the top brass buy outs. Please! They ran the companies into the ground why would they pay them a dime. Jail would be a good place for them for a start or working free for the companies until they get back on their feet. .
I would like to know how many women in small business like me have seen their credit card rates sky rocket for no reason. This is a big issue nobody wants to talk about.
These banks are double dipping. Getting bailout and charging higher rates on their credit cards. None of the money is reaching the American people.
Rebecca,
You are so right on.
Now Reid and Pelosi (and Obama) are pushing for a $50 billion bailout for the big 3 automotive companies. I say hogwash – their products are inferior and their cost structures don’t work – let them go bankrupt and restructure. Think of all the good that could come out of $50 billion being pumped into small businesses who employ most of our country!!!
And, yes, the gov’t buying equity of banks has done nothing to free up credit. We are throwing taxpayers funds into the toilet! And now Pelosi and Reid are asking for another $350-500 billion in additional funds…
goesh on
I agree with you about bringing jobs home to America. They left because of the high tax (35%) I think. Our Federal gov’t needs to lower the tax and make it so that other countries want to make their products here. We have the knowledge and the will of the people.
Free trade is only free trade when all countries pay the same tax to build a product. I for one look to buy American first but it is hard to find these days.
Call Centers are all in foriegn countries for banks and credit cards.
Yet we are giving these very banks big bailouts. It they want to be bailed out bring those jobs back to America. We the American taxpayer are paying the salaries for foriegn employee’s of these banks when our citizens are out of work. Am I missing something here?
You are commenting on banking and the bailout. This web-posting is very informative, scary, but informative.
http://pumasunleashed.wordpres.....aving-you/
I am glad that Summers is not a front-runner. I think that people in government should not be sexist.
If the Obama Administration must go to Old Washington, I wish they would consider Joseph Stiglitz. He is (of course) not female, but he is more liberal than Larry Summers and also has a lot of government experience.
They did mention Sheila Bair last night on the Lehrer News Hour. Apparently she has a lot of fans among economists – maybe Obama will consider her.
Why Larry Summers should NOT be appointed Treasury Secretary:
1. Summers was a main player in financial deregulation, a primary cause of the present economic crisis. Summers sought to silence Brooksley Born, head of the Commodity Futures Trading Commission, who correctly foresaw that unregulated derivatives trading could put other financial markets at risk. While Born attempted to draft regulations to address this risk, Summers and his cronies accused her of fostering a financial crisis. Congress, apparently under pressure from Summers et al, suspended Born’s Commissions’ regulatory authority. Born then left her position as head of the Commission. “It was Larry Summers who called her up and screamed at her,” according to Siskind, who notes that the financial meltdown might have been averted if Summers had listened to Born (a woman).?? http://thenewagenda.net/2008/1.....ew-agenda/
??
2. Andrei Shleifer, a close friend of Summers cost Harvard a $26 million settlement with the U.S. government. A federal court found Shleifer liable for conspiracy to defraud the U.S. Government, after Shleifer violated conflict-of-interest rules by making secret investments in Russia at the same time he was working for a Harvard group contracted by the U.S. Government to advise the Russian government. While Shleifer was being investigated, Summers pushed to have Shleifer promoted to a prominent chair at Harvard. http://www.opednews.com/articl.....6-709.html
WHAT YOU CAN DO:
1. Email Valerie Jarrett, who is part of Obama’s TransitionTeam at vjarrett@barackobama.com to tell her what you think about Larry Summers as Treasury Secretary.
2. Leave a note on Obama’s transition website about your vision—NO to Larry Summers. There are two places you can leave your message:
http://www.change.gov/page/s/yourvision
http://www.change.gov/page/s/contact
3. Sign the Petitions to stop Barack Obama from considering Larry Summers for the Secretary of the Treasury post. The petitions will go to Obama’s Transition Team.
The Nation:
http://salsa.wiredforchange.co.....on_KEY=494
The Open Left:
http://action.openleft.com/page/petition/nosummers
[...] – e.g. curing the root of the problem (foreclosures). This is in sharp contrast to the disastrous TARP in which our government has dumped $350 billion of taxpayer money down the [...]
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