"TARP on Steroids"

Many readers here likely remember September 29, 2008. For a brief moment, the U.S. House extended a big middle finger at Wall Street - and then, quite predictably, the entire political, media and corporate Establishment went apeshit. Though it only lasted a few days, the standoff helped further controversialize the Troubled Asset Relief Program, and thus ultimately forced the addition of some (albeit mild) restrictions on its power.

Most of us who opposed the TARP as written - and there were not many willing to take that position - were not against taking any action. We were against Congress trampling the Constitution and turning the Treasury Secretary into a king, and we were against simply handing away $700 billion with no strings attached. For this, we were attacked by the Punditburo, which preposterously likened a vote for the bill as a courageous - and necessary - vote for landmark civil rights legislation (I shit you not). And for the most part, the American public has remained opposed to writing blank checks to Wall Street, especially considering the news that these kinds of bailouts have put taxpayers on the hook for trillions of dollars.

And yet, as I show in my new newspaper column out today, the Obama administration, far from backing off or restricting TARP, is quietly moving forward a plan to create an even bigger, more permanent TARP.

In the column, I explain the details of this new bailout, which Rep. Brad Sherman (D-CA) calls "TARP on Steroids." You can find the relevant sections I refer to here in sections 1109 and 1604 of the bill, and you can see Sherman's full analysis of the proposal here. I also encourage you to watch the video clip at the bottom of this post in which Treasury Secretary Tim Geithner - the same Geithner who this week was nailed for secretly giving away billions via the AIG bailout - said the White House would oppose any Democratic amendments that would limit this new TARP on Steroids to $1 trillion. And, you can listen here to my Q&A about this issue with Sherman this week on my AM760 radio show.

I wish I could say I was surprised at this - but this is what you get when an administration packs its top-level economic positions with people connected to the same financial firms that destroyed the economy. Corruption, as we are learning, is not the exclusive domain of one party. The only question is whether or not Congress will stage another September 29th. I sure hope it does.

Read the full column here.

The column relies on grassroots support -- and because of that support, it is getting wider and wider circulation (a big thank you to all who have helped with that). So if you'd like to see my column regularly in your local paper, use this directory to find the contact info for your local editorial page editors. Get get in touch with them and point them to my Creators Syndicate site. Thanks, as always, for your ongoing readership and help contacting local editors. This column couldn't be what it is without your help.

 

Comments

[ProgressiveVoice]

The first Presidential election in which I was eligible to vote was 1980; I didn't vote for Reagan. I listened and heard and witnessed all the Republicans pledged to do, knowing it was likely to lead us to this point. I never fell for the GOP propaganda nor allowed my attention to be diverted by wedge issues, not that I would have been swayed.

I went to college and got my degree, 2 in fact. I haven't worked full time for over two years and see no prospects for the future. I'm almost 50 and about to be kicked out of my (rented) house. I can't renew my vehicle registration until I make repairs to my car, repairs equal to half it's value.

I don't see any reason to continue. I'm not speaking out of depression. It's a rational assessment of the likely outcome of the rest of my life. Unlike some, I don't think a miserable life is better than no life at all. It's unfortunate that everyone has to suffer the destruction caused by supply-sider / conservative / religious right supporters. Atheists could argue it's proof there is no god.

[racetoinfinity]

You're absolutely right abut the TARP and the complicity of the Wall St. team Obama installed in his economic cabinet.

I want to keep emphasizing and publishing the following:

Right now Obama's talking a good game about re-regulating Wall St., but his economic team is in bed with them. It's all pretty speeches; there won't be significant reform (The REPEAL of the two acts that caused this recession, and unless they are repealed - or the regulations they imposed are re-imposed, we'll have another crash inevitably: The Gramm-Leach-Bliley Act of 1999 and The Commodities Futures Modernization Act in 2000 MUST be UNDONE) and I'm afraid the Obama Admin. does not want to, and won't back these crucial reforms.

[wonketteRAWKS]

Thanks for the info and it is outrageous. This should be on the front page, but alas, that will upset the bots. Thus, only 11 or so comments.

[FogBelter]

David, Wall Street and the US Government are responsible for a fraud cloud of 500 trillion plus dollars in derivatives infecting the Global Economy ... a bubble that they can't afford to allow to pop because it would indiscriminately wipe out fortunes and Government treasuries around the world. Even in a best case scenario where they could deflate that cloud in a controlled fashion ... with the help of US Taxpayer dollars ... there will be some huge losers. Currently the situation is like having ten thousand people thinking they have the same right to bite of a ham sandwich.

The cynic in me thinks that Wall Street, the Fed, and the Treasury know that there will be some monumental losers, but they want to use Taxpayer dollars as a sort of throttle in order to insure that payouts are made to a chosen few before the whole Ponzi Scheme collapses.

A scary thought, but then this is Halloween ... Trick or Treat?

[Kassandra]

And all this from the beloved populist Obama who knows exactly what he's doing, even if we don't; creating a plutocracy out of the USA.

I guess it WAS an expansion of corporate "civil rights" wasn't it? And it sure was more than 700billion. We would be in a lot better shape economically if it HAD been 700 billion and Bernanke hadn't printed off our economy for the next 100 years and given it to central banks all over the world. I saw that little smile under the beard when he and Paulson were coming out to tell US in plain view that they were stealing US blind.

So, get ready for the SC to find for Corporate "rights" to anonymously fund elections; the gov to hand US over to the insurance giants in another bailout nobody needs.
This is Shock Doctrine on steroids; taking down the biggest economy in the world and handing it to China.
Unfortunately, it's really too late to do anything about it except pay attention...that' s all we have left anyway...attention.
CHANGE! Believe it!!!!!!!

[mjc]

Oh....I don't think Obama CREATED the plutocracy we live on in this country; certainly the creation has to go back a bit further, if not with Geo Bush then with his good 'ole dad. But Obama was going to be different. He kept talking about change....but even during the campaign there were small indicators that he was merely mouthing the words. The first big indicator of his allegiance to the capitalist corruptors came with his appointment of Geithner...and Summers....and his lean on Rahm Emanuel and Rubin. Indeed, as Sirota has pointed out, WE"VE BEEN HAD!

[Dameocrat]

This stuff can't be stopped unless we purge such people from the Democratic Party. If the primary doesn't work, then writing in or voting third party on such dems is the only way to do it, even if it means losing a term or two.

[jmpurser]

Agreed. As long as we vote for Democrats out of fear of what the Republicans will do if they get power (and it's NOT an unreasonable fear) the Democrats will continue to be the "other" corporate party.

I'm voting third party any time I can from now on and I WILL NOT vote for a Democrat unless they prove they're a progressive. Of course, I will not vote for a Republican under any circumstances.

I may not "win" much but at least I'll stop participating in my own mugging. I will NOT be part of the problem any longer.

[watchTVgetSTUPID]

Wall Street Gekos will conquer America ... even if they have to destroy it in the process.

[mrjames1]

Great read Mr. Sirota, and great links. Watching the country implode, with most people's head still in a fog about what is occurring is surreal. The elites KNOW the system will collapse, so they are looting the store, trying to get as much (soon to be devalued) money as possible. Sad thing is, in today's electronic world, a few transactions and its gone forever (just like bernie did). In the old days, it was hard to move a stolen fortune. To the elite, countries are passe, and they will move on the next victim.

The Gekko's are destroying it, and the people are pacified, hypnotized, and mezmerized by american idol, electronic gadgets, and their own illusion of celebrity too much to care. Perhaps people would notice more if the 35 million Americans on food stamps had to wait in a soup line like the old days...

[Bgorden]

Memo to the financial industry: Thanks for ruining the economy AND ripping off the US Treasury.
In fact, it was so much fun the first time, why don't you do it again? Karl Marx called the proletariat the "gravedigger of capitalism." But then, he lived too early to experience the full brilliance of your actions!
Who needs a proletariat when we have Lloyd Blankfein (fill in your CEO's name here).

It appears the true enemy of capitalism is the business class itself. I know, I know, they weren't ACTUALLY trying to destroy capitalism. It just sort of happened while they were busy making money. Now let's get back to work, before some other crook gets all the swag (or somebody in America gets affordable health care)! Don't worry, the Chinese (Saudis, Japanese) will buy up all the debt.

[desertman]

"It appears the true enemy of capitalism is the business class itself" aided and abetted by the federal government.

[TJCole]

David; Bob Herbert said it best...

"The class war is over, and we lost..!"

We're a government of the bankers, by the bankers, and for the bankers...not the people..!

I say this not to be defeatist but to hopefully anger others to the point of actually doing something organizing and demanding our country back from these corporate plunderers who will pick us dry and then leave us as they take their money overseas, and then do the same thing there no doubt..!

[desertman]

Fernando Aguirre shares in “Part IV” of his book "Surviving the Economic Collapse" how, while studying architecture following the 2001 crisis, a social studies teacher illustrated Argentina’s middle class’ slide into poverty. Quoting the teacher from memory, Mr. Aguierre writes,

“[Those in the] middle class suddenly discover that they are overqualified for the jobs they can find and have to settle for anything they can obtain, therefore unemployment sky rockets: too much to offer, too little demand. You see they prepare, study for a job they are not going to get. You kids, you are studying Architecture because you simply wish to do so. Only 3 or 4 percent of you will actually find a job related to architecture.”

We all sat there, letting it all sink in. After a few months, it all proved to be true. Even the amount of students that dropped out of college increased to at least 50%. They either [saw] no point in studying something that would not make much of a difference in their future salaries, had no money to keep themselves in college, or simply had to drop college to work and support their families.

This reads like a premonition.