Conservatives say the Dodd Finance Bill means Wall Street Bailouts Forever. Progressives say the Dodd bill “makes bailouts impossible.” Who’s right? Well lets ask Treasury Secretary Timothy Geithner who described the bill this way in The Washington Post: The Senate bill gives the government the authority to wind down the firm with no exposure to the taxpayer. No more bailouts. Instead, we will have a bankruptcy-like regime where equityholders will be wiped out and the assets will be sold. “No more bailouts.” Sounds nice. But what does “bankruptcy-like regime” mean?
President Obama met today with members of Congress to jawbone them on the pending financial reform bill. A key part of his message: “we must end taxpayer bailouts.” Few statements are less controversial than that. Nobody wants to see more bailouts. But wait a second. Doesn’t the very legislation he’s plumping for — and which will soon be voted on in the Senate — itself provides for bailouts. When asked that by a reporter just before the meeting, the President hedged, saying only “…I am absolutely confident that the bill …
So President Obama wants to slap a tax on banks, but should you really care? Absolutely. Those taxes are going to wind up costing YOU money, whether you’re a customer, a bank employee or an investor, according to the non-partisan Congressional Budget Office (CBO). As ABC News reports, the CBO wrote a letter yesterday to Sen. Chuck Grassley (R-IA) in which it highlighted that the American people will bear the true brunt of the President’s proposal. From the CBO’s letter: [T]he ultimate cost of a tax or fee is not …
It is fun and politically profitable to attack banks and bankers, especially in the wake of a bailout program estimated to have cost American taxpayers some $150 billion. Given this, the plan floated yesterday by the Obama Administration to charge a “fee” (read tax) on financial institutions to cover losses under the TARP program is understandable. That doesn’t make it sensible. The plan will do nothing to force those responsible for much of TARP’s losses — primarily AIG, General Motors, and Chrysler – to reimburse the Treasury one cent. That …
If President Barack Obama’s New Year’s resolution was for the federal government to stop taking majority ownership in private corporations, he’s off to a bad start (or he decided to get one more in before 2010). Yesterday, the government indicated it will provide $3.8 billion in additional aid to GMAC and increase its stake in the company from 35% to a whopping 56%. As The Washington Post reports, the federal government now has ownership stakes in GMAC, Fannie Mae, Freddie Mac, General Motors, and American International Group – and holds …
It’s been used to buy one car company, give another to union allies, punish non-union workers, undermine the bankruptcy code, enrich Wall Street at the expense of Main Street, keep unionized Zombie firms from dying, and generally terrorize the world economy. Now the left in Congress wants to use it again, this time as a slush fund for a third round of stimulus funding. The AP reports: Democrats are looking to tap as much as $70 billion in unused funds from the Wall Street bailout to pay for new spending …
It’s official: U.S. taxpayers did not get a good deal when they bailed out AIG last year. That was the conclusion of a report released yesterday by Neil Barofsky, the federal government’s special inspector general for TARP. The conclusion is no surprise: no one holds up the $170 billion bailout of the insurance giant as an example of government at its best. But, the Inspector General’s report puts new teeth on the charge, and pins much of the blame on Timothy Geithner, then president of the New York Fed. The …
Two House committees this week approved derivatives legislation that composes a significant part of the Obama Administration’s Financial Services reform plan. Remarkably, for a plan crafted significantly by uber-liberal Barney Frank (Chairman of the House Financial Services Committee), the bill is notably less bad than the Administration’s original proposal, but still is flawed. The House Agriculture Committee also added amendments to the bill. Heritage noted before that derivatives market participants are rapidly changing their business practices and structures in a voluntary, cooperative effort, albeit under government sponsorship. The biggest danger …
Today, the New York Times published the resignation letter of Jake DeSantis, an executive vice president of the American International Group’s financial products unit. In it, Mr. DeSantis describes government mismanagement, broken promises, and the tale of his own upbringing from humble roots. The letter clearly demonstrates the pitfalls of having the U.S. Congress as your new boss and the problems that go along with knee jerk reactions in Washington. We give it to you here, in its entirety. DEAR Mr. Liddy, It is with deep regret that I submit …
After over a year of the Bush-Obama Bailout Parade, there were some encouraging statements coming from the Senate last week. Sen. Jim Inhofe (R-OK): Should we be mad at the executives who are involved in this and who ran a once-great company into the ground? Yes. But that’s not where the blame game ends. That’s not where the buck stops. I know that I will upset some of my colleagues when I remind them, and the American people, that much of the blame should be directed right here, to the …
