Barack O'Bailout Feels Occupy Wall Street Protesters' Pain.
Forgive me for being cynical about Washington, the major parties, or anything to do with them right now. Obama just gave a shout-out to the Occupy Wall Street protesters, saying:
"I think people are frustrated, and the protesters are giving voice to a more broad-based frustration about how our financial system works,"
Excuse me, but that's like tossing a match at a house full of kerosene and then saying how much you sympathize with the fire department. The way "our financial system works" is exactly the way people like O'Bailout made it work.
It's not the $700 billion TARP bailout which Barack supported, going as far as issuing a joint statement on September 24, 2008 with John McCain, the Republican nominee, before the vote warning: "The effort to protect the American economy must not fail."
Now is a time to come together – Democrats and Republicans – in a spirit of cooperation for the sake of the American people.
Well sir, when politicians start talking like that I start feeling for my wallet and checking that my watch is still on my wrist.
It's not the GM bailout in which Barack O'Bailout stuck us with 3/5 ownership of a car with sawdust in its transmission, to make it purr like a kitten until the gears locked up. Like any good salesman Barack stuck to his guns that we got a good deal, saying before an auto industry group in November of 2010:
“You remember the voices arguing for us to do nothing...We made the decision to stand behind the auto industry. Today we know that was the right decision.”
GM started posting profits of about a billion a quarter in 2010, and more later. But its hard to see how it could not post a profit given that the taxpayers gave it $50 billion.
GM went along of course, and proudly advertised that it repaid its government loan. But it did it mostly by issuing equity and using yet more tax money to "pay off" the rest. The right-wing National Review's Kevin Williamson said:
[Iowa] Senator [Charles] Grassley blew a righteous head gasket over that shenanigan, the Competitive Enterprise Institute filed a false-advertising complaint in response to GM's dishonest PR campaign, and the stink rose so high that even the New York Times caught a whiff.
Grassley said in an op-ed:
General Motors announced this week that it repaid its multibillion-dollar taxpayer-backed TARP loans. GM even bragged that it was able to “repay the taxpayers in full, with interest, ahead of schedule, because more customers are buying [GM] vehicles.” There was great fanfare, including expensive, around-the-clock GM TV commercials nationwide. But, the hype is not the reality. In fact, GM did not repay the loans with money it earned from selling cars. Instead, GM repaid the TARP loans with money it withdrew from another TARP fund at the Treasury Department.
No, O'Bailout, we might be able to forgive that, seeing as some production would be expected for being the financial services industry's number one recipient of campaign cash over time, more than even Juan McCain. When there is a truly dirty job to be done you don't enlist amateurs. You need Chicago Slick.
The excellent news digger Bill Van Auken at WSWS reported that in 2009, even once safely in office, O'Bailout flew to New York City to raise $3 million in one shot at a Manhattan bash with an entry fee of $30,400 per couple. Four of the seven co-chairs of the event and about a third of the guests came from the big banks and Wall Street.
Van Auken writes:
Behind all the rhetoric about “change,” this is Obama’s most important constituency. In his run for the presidency in 2008, he captured the lion’s share of donations from Wall Street, taking in $15 million from securities and investment firms, $3 million from commercial banks, and $6 million from other financial institutions.
During the 2008 presidential primaries the Los Angeles Times saw fit to note:
Hillary Rodham Clinton and Barack Obama, who are running for president as economic populists, are benefiting handsomely from Wall Street donations, easily surpassing Republican John McCain in campaign contributions from the troubled financial services sector. Democrats are the darlings of Wall Street.
And the citizen watchdog the Center for Responsive Politics tells us:
President Barack Obama has relied more on well-connected Wall Street figures to fund his re-election than he did four years ago when he campaigned as an outsider and an underdog. One-third of the money Obama's elite fund-raising corps has raised on behalf of his re-election has come from the financial sector, according to a new Center for Responsive Politics analysis.
What really hurts is the Housing and Economic Recovery Act of 2008 which passed while Obama was still a senator. This likely contains the worst of the worst of the coming bank bailout costs which have yet to hit. USA Today reports that the extension of an infinite line of credit to the quasi-government giants Freddie mac and Fannie Mae, until recently traded on Wall Street, "thrusts trillions of dollars of risk directly onto taxpayers' shoulders." Richard Yamarone, director of economic research at Argus Research told USA Today in "Taxpayers take on trillions in risk in Fannie, Freddie takeover":
"You can call it a bailout, you can call it a safety net or you can call it a rescue package, but the bottom line is the American taxpayer is left footing the bill."
Even Kevin Williamson writing at the late William Buckley's rag, the arch-business friendly National Review, acknowledges that Fannie and Freddie have "portfolios bursting with the worst kind of junk."
USA Today estimates that Freddie and Fannie combined own or guarantee $5.4 trillion in outstanding mortgage debt. What Fannie and Freddie did, fairly well until the late 70s, is guarantee riskier mortgages to give banks incentives to make loans to more people who otherwise wouldn't qualify. Then Ronald Reagan's "deregulation" in the 80s ripped down the wall between banking and investment functions, leaving Wall Street free to go to Vegas with your demand deposits. Lost that bet? No problem! Freddie here (i.e. taxpayers) will pick up the tab. COME ON SEVEN!
Right-wing Hate Radio likes to repeat the fiction that it was Democratic initiatives alone which caused the crisis, namely the 1977 Community Reinvestment Act. But while CRA raised the stakes at the roulette tables, Reagan and his posse changed who could go to those tables in the first place. In other words, no one is clean here.
Neil Barofsky, the former special inspector general for government financial bailout programs, whom Glenn Greenwald called "one of the most impressive and courageous political officials in Washington", told Congress bluntly that the series of bailouts and bank rescues could end up costing the federal government as much as $23 trillion, what Politico called "a staggering amount that is nearly double nation's entire economic output for a year."
For comparison purposes, the entire US federal budget for a year is about $4 trillion, the current total national debt about $14 trillion.
The respected blogger Dr. Housing Bubble ("How I learned to love SoCal and forget the housing bubble") writes in "Crony Capitalism for Dummies: Housing and Economic Recovery Act of 2008. How the Bailout will not Help you and Cost you Money.":
The problem with our current politicians is this. Democrats with control of the House should have fought harder to simply come out and nationalize the two mortgage giants. If their mission of providing liquidity to the secondary mortgage market and helping provide affordable housing to the American public is so vital, these two should be nationalized, allow shareholders who knew these were quasi-private enterprises take their hit and move on...
Yet the majority of Republicans are playing even a more clandestine game of politics. What the current administration is playing is verbally acknowledging free market capitalism but in reality, what they are doing is nothing more than crony capitalism. Some have called what is currently going on as socialism but socialism by definition is a redistribution of wealth from those at the highest income brackets to the vast majority of those at the bottom.
Where did Obama stand? After George Bush signed HR 3221 making the taxpayers liable to a black hole the depths of which are yet to be plumbed, (and after voting "present" on all important related votes) candidate O'Bailout said:
"I applaud the enactment of the Housing and Economic Recovery Act of 2008, which will finally begin the process of providing relief to homeowners and communities and helping to stabilize the housing market."
Rather than allow the shareholders of Freddie and Fannie to "take their hit and move on," allow FDIC insurance to kick in when banks failed, which is what it is for, he became part of the problem. The silver-tongued orator who hypnotizes millions on simply...HEY &%^ WHERE'S MY WALLET!?
"Two-thirds of the nation's total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928."
Any sympathy Obama professes for the OWS movement without taking his share of responsibility for the crisis hitting the "99%" only gives ammunition to those who would like to sideline the movement as a creation of George Soros and the overtly partisan MoveOn.org There should be no mistake and it should be said very clearly: The Occupy Wall Street protesters do not approve of Barack Obama.
Repeal HR 3221 Housing and Economic Recovery Act of 2008
"Listen I like you. Just do what you're told and you'll be okay, okay?"