Skip to comments.Why Obama Allowed Bailouts Without Indictments
Posted on 09/19/2013 1:28:36 PM PDT by RKBA Democrat
The following article by Janet Tavakoli is an excellent reminder of the extraordinarily destructive coup pulled off by financial oligarchs in fall of 2008, when the rule of law was suspended and total theft institutionalized. I have written many times about my experience on Wall Street when the bailouts happened. How I ranted and raved on the trading desk about how TARP marked the end of any semblance of free markets and that there was no turning back. How I was told to take a walk around the block to cool off.
All of the suffering and hardships the majority of Americans are experiencing today are directly related to the coup pulled off by the crony financial oligarchs in the fall of 2008, and all of the media and political minions that helped them do it. People realize we have become a Banana Republic and they have now lost all hope. That said, there should always be hope and we can certainly restore society to better days, but not until we have remove our domestic cancers from their positions in the highest offices of government, finance and corporate America. That is what we must peacefully achieve. Now heres Janet Tavakoli:
In November 2008, President Obama was elected, and he was sworn in January 2009. The country was promised change and reform. Recently two democrats close to the top of President Obamas administration made excuses to me for the lack of financial reform in the United States. Their separately related versions were remarkably similar, so similar they seemed scripted:
The administration made a bargain, and Im not sure it was the right decision. The world was teetering on the edge of collapse. There was a crisis of confidence. There would have been unimaginable consequences. So bad even your imagination cant handle the truth?
It was the lesser of two evils to let a lot of people get away scot free than to risk a collapse in confidence. There were only two choices according to this narrative.
It was better to let a lot of people get away scot free than to have the first African American president take on the establishment while the country was deeply divided and he needed agreement on big things like ending wars, health care, Supreme Court nominees (and LGBT rights). There were lots of battles without taking on the financial establishment. It seems to me that reforming our financial system is a big thing. As for at least two of the narratives big issues: health care costs are zooming up, and it looks as if were rattling our swords for another military conflict.
The president was elected in part on his promise to effect change on the really tough issues, and there was no better time than when the crisis was fresh, and he had a groundswell of popular support.
The most amusing thing about all of this is that people wanted President elect Obama to stick it to the financial oligarchs. Instead, he gave them trillions and offered immunity. More from Janet:
Instead of TARP, handing out money to cover banks losses, we could have forced creditors to accept a restructuring plan. This is what was done during the Great Depression. Creditors, i.e., debt holders including credit default swap counterparties, would have been compelled to accept a restructuring plan. That required partial forgiveness of debt in many cases and/or a debt for equity swap.
The governments bailout plan destroyed capitalism. In a capitalist system, those who stood to gainand already made off with large gainswould have to bear the risk. The bailouts represented a corruption of capitalism. Crony capitalism violates the spirit of democracy established by the Founding Fathers of the republic known as the United States. I expressed these sentiments in a letter to the Financial Times on September 29, 2008.
Treasury Secretary Henry Paulson Was a Section 8
All of this spells dark times for the future of the republic. On September 20, 2008, at the height of the crisis, Henry Paulson, former CEO of Goldman Sachs, and then the 74th U.S. Secretary of the Treasury, did not merely request immunity for actions he was about to take. In his original draft proposal of the Bailout Plan, he requested imperial powers:
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Paulson was not an elected official, yet he requested powers that surpassed those granted to any representative of the citizens of the United States.
Section 8 was formerly a type of discharge issued by the U.S. military that meant one was mentally unsuited for service. The spirit of Hank Paulsons Section 8 continues to dominate the U.S. financial system.
Here’s the link; I’ll get in trouble if I post the pic...
That pretty well summarizes it. Thanks for posting.
If you’re into the art side of satire, check out williambanzai7’s work at Zero Hedge. His geithner/bernank Valentines day card still makes me laugh to think about it.
His picture of Rudolph Von Havenstein today was Ok. He’s done a lot better. http://www.zerohedge.com/contributed/2013-09-19/meet-rudolf-von-havenstein
Obama couldn’t prosecute anyone because that would have given away the Democrats’ role in engineering the economic crash.
LOL! That’s hilarious. I’m gonna have to visit that site more often. Thanks.
It wasn’t a bug, it was a feature.
God bless our kakistocrats. Because they sure won’t be getting any blessings out of me.
BINGO! That’s the real reason in my opinion. The Democrats are part of the corrupt financial system and benefit from hit. This fact always enrages me because they snooker their zombie voters into thinking otherwise.
Look at the job the Dems did on the savings and loan industry. What’re we going to tell our grandkids when they watch, “It’s a Wonderful Life” with Jimmy Stewart.
EXCERPT-- On this, the fifth anniversary of the Lehman Brothers collapse, millions of Americans will be looking back on that terrible Monday and trying to put a figure on the damage that ensued......millions of lost jobs, broken dreams, missed opportunities and forfeited homes.
But there is one number that is hard to dispute: $18 trillion.....18 with 12 zeroes trailing it, or $10 billion for every day since the financial crisis officially began Sept. 15, 2008.....the amount of debt added to the worlds monetary system by the US and the six other major industrialized countries to keep the system afloat in the 1,825 days since Lehman CEO Dick Fuld went into the witness protection program and his Times Square hdq went to black.
$18 trillion we and our children will eventually have to make good on.... And what did we get for that $18 trillion in triage? Subpar growth here at home, and recession in Europe and Japan.
Indeed, all that debt is estimated to have generated just $1 trillion in gross domestic product growth across the globe, according to a chart Deutsche Bank chart published by Zero Hedge. In other words, it is taking $18 in debt to generate $1 of growth.
So where did those trillions go? More than $6 trillion went into the federal deficit, which has grown by that amount since 2009. Most working Americans know that almost nothing of the borrowed trillions has ended up in their pockets.
Ironically, nowhere have the Bernanke bucks rained down more disproportionately than on the 2-mile radius around Lehman Brothers old Midtown headquarters. Eight blocks to the north, on 57th Street, condos are now priced at $70 million, while a few blocks to the east, at the auction house Christies, a Jeff Koons balloon-dog sculpture is priced to sell this fall for as much as $55 million. And the bubble burst when?
In retrospect, the bright-eyed money men must concur that it would have cost a lot less than $18 trillion to have come up with a way to keep Lehman afloat.
Jeff Koons $55 million balloon-dog sculpture
The price tag for the Wall Street bailout is often put at $700 billionthe size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets.
To get a sense of the size of the real $14 trillion bailout, see our chart at web site. Below, a guide to the pieces of the puzzle:
Treasury Department bailout programs
Remember Obama had tight control of Treasury; Obama calculatedly placed his then-COS Rahm Emanuel in a dual role.......in the WH and at Treasury. Obama had a stranglehold on Treasury via COS Rahm Emanuel's dual role
STROLL DOWN MEMORY LANE Soon as they occupied the WH, Obama and the Chi/cons (a) took control of the US Census; (b) Obama placed his COS Rahm Emanuel in control of the US Dept of the Treasury (the IRS). Read on.
THE SMOKING GUN---WSJ REPORT--On Jan 20, 2009 Timothy Geithner was appointed Obama's Secy of the Treasury. But within three weeks, the Obama White House tightened its grip on Treasury. Obama put his COS, Rahm Emanuel, in charge of Treasury---Rahm Emanuel's dual role was an unusual move.
When he got to Treasury, WH COS Rahm Emanuel was so involved in the inner workings that the phrase "Rahm wants it" had become an unofficial mantra among subservient govt staffers, prostrate in obeisance, scurrying to accede to Rahm's wishes, according to Treasury government officials. Reported by WSJ / 05/31/09
More here: http://online.wsj.com/article/SB124113406528875137.html
MOTHER JONES CONT--Money Market Mutual Fund: In September 2008, the Treasury controlled by Obama/Emanuel announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].
Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokeragesas much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion [PDF].
TARP: As part of the Troubled Asset Relief Program, the Treasury controlled by Obama/Emanuel made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid.
Government-sponsored enterprise (GSE) stock purchase: The Treasury controlled by Obama/Emanuel bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac [PDF] to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets."
GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury controlled by Obama/Emanuel may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion ---SNIP---.
LONG READ---go to web site to read more and checkout the shocking financial charts.