Posted on 4/23/2010, 3:06:09 PM by AngelesCrestHighway
Speaking to an audience of big business and big labor executives (including Goldman Sachs’ Lloyd Blankfein, Bank of America’s Bruce Thompson and SEIU’s Andy Stern) at New York’s Cooper Union, President Barack Obama noted “the furious efforts of industry lobbyists to shape” the financial regulation bill “to their special interests.” Obama then admitted, “I am sure that many of those lobbyists work for some of you. But I am here today because I want to urge you to join us, instead of fighting us in this effort.” Obama should have saved his breath. Wall Street and big labor lobbyists have already joined forces to make sure the current Senate legislation has become a Wall Street Bailout Bill.
The Wall Street bill is a smokescreen.
It does not prevent future bailouts at all.
If the government wants to do something constructive then let them regulate and break up Fannie Mae and Freddie Mac first.
The government needs to clean up its own act before it starts telling other businesses what they can and can’t do.
A BLUEPRINT FOR COERCION
By DICK MORRIS
Published on TheHill.com on April 20, 2010
How odd that when the president’s largest corporate donor, Goldman Sachs, gets indicted it is seen in the wonderful world of Washington as catalyzing his efforts to modify Wall Street regulation. Goldman’s employees, of course, gave Obama just shy of $1 million — a total exceeded only by the faculty and staff at the University of California — making them the second largest bundle of donors to the Obama campaign.
There are so many reasons to oppose Obama’s financial regulation bill.
Some Republicans have focused on the fact that it sets up a TARP II fund that starts the bidding at $50 billion. In making such an offer to back up firms that are too big to fail, the bill guarantees:
a) that the big firms will feel free to make whatever risky bets they can get away with since their downside (i.e., backside) is covered;
b) that the bigger firms eclipse the smaller ones (as Fannie Mae and Freddie Mac did to the mortgage industry) because of their implicit federal guarantee; and
c) that more firms crowd to get under the $50 billion umbrella and that it expands into an even larger bailout.
Other Republicans complain, correctly, about the power the secretary of the Treasury is given under the bill to seize any financial institution he deems too big to fail and thinks is at risk of insolvency. They rightly worry about the constraint this provision imposes on business growth and the dictatorial powers it gives the administration to fire management, replace directors, liquidate stock value and sell off parts of the companies they seize.
But we also need to worry about how the power to seize on the one hand and bail out on the other will be used by this administration. Already, we have seen how Obama and Geithner did not hesitate to throw their regulatory weight around to force bondholders to take a pittance in very partial repayment of their loans to General Motors. We can imagine how much political clout these new powers will give to Obama.
With political action committees and bundling by financial firms playing an ever larger part in campaign finance and issue advocacy advertising, will any large financial institution feel free to let its executives work against Obama’s reelection? Will they not worry that he could take them over in a twinkling of an eye? Or will they be so anxious to come in out of the rain of competition to nestle under the bailout umbrella that they won’t want to risk antagonizing Obama?
Particularly after the Citizens United case, anything that inhibits corporations from participating politically limits political debate and slants it toward the administration. In the very debate now under way, are financial corporations not already pulling their punches so as not to alienate a president whose hand can feed them or seize them as he wishes?
Yes, George W. Bush acquired vast new powers for the executive branch of government in the Patriot Act and the war on terror. But there is no record of his intentionally misusing them to intimidate political opponents. But Obama has a more ruthless mind. His war on Fox News shows how this thin-skinned president keeps track and takes names. We can well imagine a Nixonian enemies list of financial institutions earmarked for special regulation and intensive oversight, not for their economic performance, but for their political views.
Let’s remember the days of JFK phoning steel-company executives to force a roll-back in their price increases while Attorney General Bobby threatened increased antitrust scrutiny. Equipped with the powers about to be conferred in the financial regulation bill, such government tyranny could be even more dangerous.
Some seem willing to confer these powers if only a bankruptcy judge signs off on the takeovers and seizures. But the administration, which appoints the judges in the first place, can shop for a compliant one like a prosecutor looking for a jurist to issue a search warrant.
Fidel Castro and Hugo Chavez could only marvel at giving the government such powers.
PLEASE FORWARD THIS E-MAIL TO FRIENDS AND FAMILY
Republican Congress Needed to Save Economy
Uncertainty surrounding the economy means we could be headed for an economic catastrophe. Congressional elections in 2010 can play a major role in shaping recovery if we can elect a Republican Congress.
It’s our only hope and no rino’s allowed
Excellent post...I will foward it.
Thank you! I think all freepers should forward that post to all their friends and family no matter what political persuasion they are.
Maybe it might wake some people up finally.
And those that won’t wake up are probably deader than a doornail anyway and are beyond all help.
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