No Tough Love for Wall Street

What an insipid anticlimax! Rising to "a challenge more complex than our financial system has ever faced," Treasury Secretary Timothy Geithner promised on Tuesday to give trillions more to the very folks who profited from that malignant complexity. For all the brave talk about transparency and accountability in the banking bailout, he gave the swindlers who got us into this mess yet another blank check to buy up the "toxic assets" they gleefully created.

According to the Congressional Oversight Panel created by Congress to monitor the bailout, the Bush Treasury Department overpaid by $78 billion of our money in the first 10 purchases of those assets. Yet Geithner tells us "Congress acted quickly and courageously" in throwing that money at Wall Street without requiring any accountability. At the same time, there is still no commitment to directly help what Geithner admits are the millions of homeowners already foreclosed out of their homes, with millions more to come. The leaks from Treasury promise that $50 billion will eventually be allocated directly to helping homeowners, which is a day late and a dollar short in chump change compared to the trillion dollars that Geithner on Tuesday committed to the purchase of more bad bank debt.

The Geithner speech betrayed the buildup to it offered by President Obama in his press conference the day before. I was such a sucker I found myself cheering at almost every line, agreeing that Republicans acted with total irresponsibility in opposing Obama's plan to stimulate an economy that was wrecked on their watch. But then came the hangover reality of Geithner's talk. Instead of the promised transparency we were treated to yet another "trust Big Brother" hustle.

How wonderful that Geithner, who as head of the New York Federal Reserve was in on the first wasted $350 billion, now promises a brand new Web site to help us taxpayers follow the action. It means nothing, given that he specifically ruled out any of the serious means of holding Wall Street accountable.

The New York Times got it right: "... the plan largely repeats the Bush administration's approach of deferring to many of the same companies and executives who had peddled risky loans and investments at the heart of the crisis. ..." Geithner and White House economic czar Lawrence Summers won out over David Axelrod and other Obama advisers more loyal to the wishes of grass-roots voters; "... as intended by Mr. Geithner, the plan stops short of intruding too significantly into bankers' affairs even as they come onto the public dole."

The word dole is usually applied heartlessly to welfare mothers sustained in their dire poverty by meager government handouts, not to the top bankers now ripping off the taxpayers. But as opposed to welfare mothers, who must survive stringent monitoring, the bankers will be largely self-monitoring. No wonder that welfare rolls, because of onerous eligibility rules, are not rising commensurate to the degree of misery out there. There is no such tough love for bankers.

Much has been made of the proposed $500,000 pay cap that applies only to the most senior executives, who, rest assured, have already salted away massive fortunes made while hustling unsuspecting consumers with teaser loans. But there is nothing from Geithner about replacing those top executives, who presided over the disintegration of financial institutions that the taxpayers must now salvage. Nor is there any "moral hazard" pain planned for the shareholders in those Ponzi-scheme companies of the sort reserved for ordinary folks losing their homes.

Believe it or not, I fully expected this morning to write a cheerleading column hailing Geithner's reversal of course. Surely the man who as head of the New York Fed sat idly by while the Wall Street giants he was supposed to be monitoring imploded would have learned the error of his ways. Otherwise why would Obama have appointed him?

I don't have the answer. The Obama of Monday's press conference, a president in the tradition of Franklin Delano Roosevelt, seemingly deeply feeling the average person's pain as he movingly speaks of the laid-off workers of Elkhart, Ind., was absent from the next day's speech by his treasury secretary.

If like me you still get those chatty e-mails from the Obama campaign, it is time to remind them that we voted for the caring community organizer from the streets of Chicago and not some hack carrying water for the predators of Wall Street.

Robert Scheer is editor in chief of Truthdig and author of The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America.

 

Comments

[Roaming]

I voted for Nader. I knew he didn't have a snowball's chance in hell, but at least I can feel good that the guy I wanted would not be rolling over like Obama, who is fast becoming the posterchild for the dying dreams of the people who voted for him as he betrays them in favor of the wealthy and powerful status quo.

[AlinaM]

I keep seeing the man who gleefully told the finance committee members that he made a careless error when he asked for reimbursements for his taxes from the IMF while failing to pay the required self employment taxes. Somehow I cannot get beyond that. It appears that Geithner is unable to get beyond this either. He does not appear to be a credible human being.

[ringeroo]

Per my previous post....co­incidental­ly Ms. Maxine Waters took it to the CEOs on the very issue of credit card interest rates going up simply because they have the power in the small print to do so. See her passionate examination on this and other disparities.

http://www.huffingtonpost.com/2009/02/11/maxine-waters-grills-ceos_n_166117.html

[ringeroo]

Mr. Scheer, I know you have mentioned this on Left Right and Center, but as a warning to all I suggest keeping a close eye on your credit card interest rates. In the past two months mine went up 6% FOR NO REASON. I called and Citibank confirmed my account was in good standing and then the customer service rep started reading me their standard language that it is "due to these troubling times in the economy." I did not take it and was transferred and got my rate returned to my original rate.

BEWARE!

Also, not sure why my electronic payment from my CITIBANK account takes from 2-5 days to post to my CITIBANK CREDIT CARD. SAME BANK! ELECTRONIC.

Maybe they will post a day late and then they can jack up the rate due to late payment. Make payments 5 days before due date. This is probably another scheme.

BEWARE!

[Sean]

No tough love for Wall Street? Are you daft, man? Why, just think of the pain these gentlemen must endure having to pretend to beg for their filthy lucre rather than just stealing it!

[magen]

Why is this soooooooo difficult to understand­..........­..........­..

THE AMERICAN PEOPLE WANT TO KNOW WHERE THEIR HARD-EARNED TAX DOLLARS ARE GOING!!!!!­!!!!!!!!!!­!!!!!!!!!!­!!!!!!!!

We deserve at least that.

[Dude77007]

LET THEM FAIL
We have such short memories. The Country Club Republicans loot some institution every time they get in office. I believe they have really screwed themselves this time. Unfortunately, the taxpayer will continue to bail them out. However, their current financial rip off has been perpetrated on other countries and their financial institutions. Haven't these guys ever heard of Bahrain and Dubai and their emerging financial markets? Unless we buy up their toxic assets also, no country in their right mind will ever trust our banking system again The integrity of US financial institutions is finished and no matter how much we bail them out, they are history on the would scene.
So why bail them out? They will never be a player on the world stage again. About four people went to prison from the S&L debacle and I bet less will go as a result of this rip off

[AnotherMcIntosh]

All too true.

[ProudLiberalDan]

Thank you, Mr. Scheer. This is wonderful.

This is why we need progressive advocates to lobby Congress for progressive principles regardless of what our DLC President wants.

Just because Geitner proposes a plan doesn't mean it will become law. Congress makes the laws according to our Constitution. I call upon the Democrats in Congress to throw Geitner's repeat of Paulson's plan in the circular firing cabinet and come up with their own.

NO MORE BLANK CHECKS for corporate executives who only use it to pad their financial numbers and pay themselves unearned perks and bonuses until we get Health Care Reform and foreclosure relief FIRST.

Side note: The fact that Obama wasn't there was very revealing. He can ditch Geitner when this plan hits with a thud and appoint someone different if wants.

[FearlessFreep]

Tough love is only for the powerless.

[WeTellTheTruth]

There are many people that have "invested" a great deal
of their hero worshiping capacity in Barack Obama.

It will take a while........ but when the truth hits them........ it's going to be painful.

Our political system is as broken as our financial system.

[peterg76]

You'd think if they were going to try the same scam again, they'd at least try to disguise the theft a little better.

[joscallinet]

I am as disappointed as anyone here witnessing the final dissolution of our country. Lucylou has it right - the baddies are still in charge.

I have a sinking feeling that we are witnessing the flushing of the United States of America down the toilet.

[lgillooly]

Until the democrats have a grassroots uprising and call our Congresspeople and Governors like the Ditto head followers of the king of Corporate media Rush Limbaugh, Obama will have to play the Corporate/­Government balance game. Nothing can change until the AmericaN PEOPLE WAKE UP.Most Republican voters believe their party is the Fiscal Consrvative party...not
Most believe there is a Liberal dominated media.....REALLY NOT(5 MEGACORPS OWN THE VAST MAJORITY AND 92 PERCENT OF TALK RADIO IS Corporate owned Limbaugh and wannabes)
They believe their party supports the Military...NOT. R's support the Military Complex,but Democrats support the troops,veterans and their families(see IAVA grades od Senator's voting records)
This complete brainwashing by Corporate media will be hard for them to believe and accept. We all have to speak up and often to get the truth out,otherwise Obama will triangulate like Clinton just to survive and get some good things done.

[frank1569]

The main reason all of the robbing and stealing and lying continues unabated is this: because We The Taxpayers are allowing it to continue. Period. Are we storming the gates? Raising hell in the streets? Committing mass civil disobedience? Does "our" government, or the "finance industry," have any reason whatsoever to fear the consequences of their behavior? Are blog rants and angry emails all we got?

"They" know their audience better than we do. They know that, if all that's already happened hasn't sparked even the hint of a revolt, uprising, whatever - then why stop? They know that soothing words and a public scapegoat here and there will keep us placated. They know that we have become so fat, stupid, lazy and docile, that even saying things like, "We're giving trillions of your money to the thieves who stole trillions of your money so that they can then loan trillions of your money back to you" won't trigger the slightest backlash.

Basically, "they" know that "we" have surrendered.