I think we can all agree that the one thing TARP accomplished is to socialize the losses brought on by corporate irresponsibility and greed, freeing the banksters to continue their fat bonus checks and conspicuous consumption. Here are two solutions to dealing with TARP: Tim Geithner’s and mine.
A day ahead of testimony in which he’s sure to be grilled about the controversial taxpayer-funded bank bailout program, Treasury Secretary Timothy Geithner announced Wednesday that he wants to extend it into late 2010."History suggests that exiting prematurely from policies designed to contain a financial crisis can significantly prolong an economic downturn," Geithner wrote in a letter Wednesday to House Speaker Nancy Pelosi, D-Calif.
The Troubled Asset Relief Program, widely known as TARP, will continue until October 3, 2010, Geithner said, arguing for prudence in keeping an unpopular program afloat until almost the end of next year.
"We must not waver in our resolve to ensure the stability of the financial system and to support the nascent recovery that the administration and Congress have worked so hard to achieve," he said…
Inserted from <Common Dreams>
Why am I not surprised to see Geithner supporting the extension of the taxpayer funded gravy train for Wall Street?
My solution may be a bit simplistic, but it represents a complete about face from Geithner’s socialism for the rich policies. First, I call on Obama once again to fire Geithner and Bernanke, to appoint Elizabeth Warren at Treasury and to appoint whomever she recommends at the Fed. Second, as the big banks pay back the TARP funds, let’s invest all that money in Main Street through job creation spending on infrastructure and establishing a green manufacturing base. Third, we must muzzle the bankster’s greed through exhaustive oversight and iron-clad regulation. Fourth, too big to fail is too big to exist. Break up the banksters. Fifth, and perhaps most important, we must correct the travesty that ultimately led to the crisis. Years of GOP No Millionaire Left Behind policies, have skewed the wealth in our nation so extensively that the bottom 40% of Americans own only 0.2% of the wealth, while the top 10% own 58.9%. The bankster’s crooks were able to sucker people into ninja loans only because they could not maintain their standard of living without using the equity in their homes. Why? Costs increased, but real wages fell, as the nation’s wealth flowed into the pockets of the super-rich. It’s time for these beneficiaries to give back some of the largesse they have received at American taxpayers’ expense. It’s time to finance health care reform, clean energy reform, and education reform using a healthy surtax on millionaires. The tired old argument against this is that it will hurt the economy by limiting the rich people’s ability to create jobs with their investments. That is a lie. They are investing for paper profits that produce little if anything of value. paper profits produce no jobs. Furthermore, history tells a different story. I found the above statistics this morning at Crooks and Liars. The top marginal tax rate (what the super-rich pay, before loopholes) in the US stayed above 75% from 1941 – 1981. Throughout most of that time, business boomed and investment capital was plentiful.
What do you think?
22 Responses to “Editorial: Two Solutions to TARP”
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here's a link to todays must read: The Return of the TARP Hostage Takers
Nothing is changing, Obama has got sweep his economic advisers out the door or we are in for another bout of boom and bust and financial bubbles that flatter to deceive. I agree with you, "too big to fail is too big to exist."
Those are all great suggestions.
Remember the old tactic to "hit 'em where it hurts", in the wallet?
Let's hit 'em where they hurt us, in the courtroom, and end corporate personhood.
They are inhuman and should not have the legal rights of a human being.
TomCat,
I absolutely agree with everything you spelled out.If I might add a couple things,Janet Yellen at the SF FED has been saying some very accurate things about policy,much of it BEFORE Lehman went down.She would be an excellent choice to head the FED.
Right you are about the wealthy investing for paper profits,with overcapacity and lack of demand they will continue to speculate with the $.
Your chart shows how well we did when marginal tax rates were really high on the rich,they were forced to reinvest their profits into capital instead of paying dividends and bonuses like they do when tax rates are low.
If not Warren,Sheila Bair at FDIC has been above reproach,IMO. She's a Repub too,although I saw her trying not to roll her eyes when Bachman was quizzing her about ACORN at a house financial services meeting regarding regulation.
Great post.
Thanks, RJ. I read that during my research this morning and, although he made a fascinating conclusion, he did not support it well.
Thanks Holte. Oso's comment has some good candidates as well.
Dave, giving corporations human rights without human responsibilities is the worst decision SCOTUS ever made. It needs to be overturned, but given the current composition of the Court, that won't happen.
Thanks, Oso. I appreciate that, as well as your suggestions. Good choices.!!
TomCat,
if you had a chance,Randall Wray has three suggestions for regulating the big guys,one being to Prohibit derivatives trading by any protected/regulated institution.If they can borrow from the FED's discount window or backed by the FDIC-no derivatives.
http://www.nakedcapitalism.com/2009/12/financial-reform-or-rearranging-chairs-on-the-titanic.html
Oso, I like your choice of Shelia Bair – anyone who doesn't roll their eyes at Michele Bachmann is as loony as she is.
TC – I liked all your suggestions – bring the max rate up to 50% and these cash bonuses will go away asap. However, they will get compensated in stock, but that puts pressure on them to maintain the stock price over a long period. Sucks to be you!
I also want to see Glass-Stegall brought back. Once we let the investment bank and the regular thrifts together all hell broke loose. Too big to fail is too big to exist.
Lisa G.
Yes bring back Glass-Steagall.
Bachman did the same thing to Bernanke, during a committee meeting when he was being grilled she asked a very long,very loony question about ACORN and how with its ties to the banking industry thru the CRA shouldn't it be regulated by the FED.
I'm visualizing you rolling your eyes as you read this.I'm no fan of Bernanke,but his reply was an unsmiling "I'm unaware of any ties there" said dismissively.
Nice moment.
Good points, Tom, but I'm afraid we will not be able to stop this freight train. As you point out, SCOTUS is stacked against us, and the moneyed interests of this country will make sure it remains that way.
I am a true pacifist, and it grieves my heart to say this, but revolution is now the only viable answer. Wishing and hoping is an exercise in futility. Those that hold the wealth and power in this country will not give it up willingly; it has to be wrested from them. But I love your optimism. 🙂
Oso, I am actually picturing you as a real live, wise, Native American. I saw that conversation with Bachmann and Bernake – I thought I was gonna laugh myself silly! That woman makes about as much sense as Scarah Palin – which is to say NONE. Even in those interviews (with lightweight Katie Couric no less) she couldn't answer the questions. I just kept looking at my husband saying "WTF did she just say?" We kept playing it back to see if it made sense after 2 or 3 times – nope, same word salad.
And raise the tax rate to 50% on anyone over $1M; the Repubs will whine, but then, when do they do anything else?
Oh, and take away that tax provision that allows hedge fund managers to get their bonuses taxed at capital gains rates (about 20%) instead of regular income rates. If my bonus is taxed at my regular tax rate, then so is yours, asswipe.
Oh, and TC, I'm actually an auditor by trade; tough but fair. No one believe me though because I'm short and blond and have a sense of humor. I'm constantly whipping out my AICPA card to prove it.
Ok, I think I'm done now. Off to harass my facebook friends!
How about establishing personhood for all human beings while we're at it. I don't mean it to be facetious. Why are corporations
"persons", and babies in the womb, even viable ones, aren't?
while i have over a dozen links to the TARP resolutions on this weeks post, ill just drop this one here for its pure irritabilty: TARP Came "Out Of The Air" – Don't read this from today's Washington Post if you have a weak stomach or blood pressure problems. In a remarkable story, Neel Kashkari, the man who conceived of and ran TARP for Bush Treasury Secretary Hank Paulson, admits that the $700 billion figure came "out of the air." Here's the money quote: "It was a political calculus. I said, 'We don't know how much is enough. We need as much as we can get [from Congress]. What about a trillion?' 'No way,' Hank shook his head. I said, 'Okay, what about 700 billion?'"
Lisa G.
like they say 2 out of 3 ain't bad,I'm real live and Indian but not wise.Product of the LA unified school district.My brain only came out of the sports page about 7 years ago so making up for lost time.Quechan tribe.
My youngest and I were watching the Palin Oprah interview.Didn't expect much and wasn't disappointed.But we both thought if she couldn't handle Katie Couric how would she do against Putin?
I can understand what you wrote about not taking someone short and blonde with a sense of humor seriously. Sexist/racist generalizations – I've told my daughters they have to pick their battles.It sucks though.
A woman I used to work with went to a conference in Texas, one of the men there kept referring to her as "Little Missy" whenever she spoke up. At one point she told him "this little missy has bigger balls than any man at this table and if you call me that one more time I'm gonna come across the table and kick yours in".
She was my hero after that.
Lisa and Oso, I had all these measures in mind when I said "iron clad" regulation.
Tim, I cannot support violence, so I can only hope that you are wrong. Revolutions have a nasty habit of being taken over by elements no better that the ones they overthrew.
Lisa, dynamite comes in small packages. Nitro in smaller ones. Atomic energy in smaller still. You are the next step in that progression.
Welcome Colorado. You are welcome to share your opinions here, but I would appreciate if you would at least show enough courtesy to stick to the topic under discussion, which is economics, not the pro-death stance of the right for all but the unborn. Nonetheless, I will answer you. Exodus 22 characterizes a fetus as a fruit, not a person: "If men strive, and hurt a woman with child, so that her fruit depart from her, and yet no mischief follow: he shall be surely punished, according as the woman's husband will lay upon him; and he shall pay as the judges determine." If she were killed, her husband would have the right to avenge her, because Moses recognized her personhood.
Thanks, RJ.
Tom-
As you should know by now, I am NOT supporting violence in any form, only recognizing the fact that this may well be the only cure. Medicine is nasty and bitter, but it rejuvenates and heals the body.
"Revolutions have a nasty habit of being taken over by elements no better that the ones they overthrew."
You can chisel that in stone, my friend. It took the Americans 200+ years after their Revolution to fulfill that piece of prophecy. Americans, being the 'can-do' people they are though, finally brought it to fruition. 🙂
Ok, so I lied, I wasn't done. Thank you Oso; part of being a good auditor is being a good judge of people; I can smell bullshit a mile away and I know by body language when someone is lying to me. I had a feeling that I was not far off with you. 🙂 But you are wise, so don't discount yourself! I started working in the 80's when it was still pretty bad with harassment. I was once chased around a warehouse by a salesman at a location I was auditing. I finally stopped and said to him "Knock it off, or I'll rip off your head with my bare hands, stuff your balls down your throat and staple your dick to your head!" Needless to say, he knocked it off. And for that woman at the conference, that sounds EXACTLY something I would say!
You all should see this little shit talking about conservatism – the money quote "The government is not here to help people." Really, WTF is it supposed to do, Mr. wise old 12 yo? He's on the 7th button. He's also looking forward to meeting Jim DeMint (R-SC) a C Streeter. Someone brain washed this child; he looks like a real life version of Alex Keaton from Family Ties. On the plus side, he didn't mention God, even once, so I gotta give him that. He's even written a book about it that he mentions in the clip.
http://www.huffingtonpost.com/alex-brantzawadzki/anatomy-of-the-tea-party_b_380539.html
Colorado, as a woman I value my ability to have a choice. You're a man, so you would never have to worry about it. I made that choice twice – neither one of them lightly, but at the times, given the situations that I was in, I still feel I made the right choice both times. (And I was using birth control during both those times – the pill – so I'm the lucky 100th winner twice! I should play the Lottery!) That said, I have 2 very active, healthy and smart teenage boys. Like I tell people who are against abortion; if you don't want one, then don't have one. But don't tell me what I can and cannot do with my own body or whom I'm allowed to marry. There's a reason for the separation of church and state in the Constitution; to protect us from becoming a theocracy. If that's what you want, Iran is a really nice place to find it, although, probably not in your reglion. Oh, and the US is not a Judeo/Christian country btw. Most of our founding fathers considered themselves to be Deists and at least a couple of Atheists thrown in there for good measure.
Oh, and RJS, they pulled that $700B totally out of their asses, not the air. Then Hank tried to hold the US economy hostage by saying there would be a complete economic meltdown if he didn't get his money without any strings attached, accountability, a way to track how that money would be spent, when it would be paid back and at what interest rate, and to account for who was paid what. (Poor Elizabeth Warren has that unenviable task right now and she says we may never be able to find out who/what the money was spent on – it was SUPPOSED to free up credit for people and small and large businesses to get loans, but shockingly it was not. It was mostly used to shore up the crap (i.e., the worthless assets that they had speculated on) that they had on their balance sheets. On the plus side, at least good old Hank is gone. And for you teabaggers that read this blog – this happened under GWB not Obama. Refer to history or a newspaper – not Fox News. Obama did the $787B stimulus bill which the non-partisan budget office said was responsible for saving about 1.6 million jobs.
Lisa G.
I like your style!
In the interests of full disclosure:I was just watching C-Span right now,and I need to say that Sheila Bair is really cute with her new hairstyle.
TomCat,
Another in a long line of brilliant posts you've made. I love how you cut to the chase in this one, and I agree with every point wholeheartedly. Those on the very top have been far more irresponsible than any low-end welfare cheat. It is high time these wealthy elite pay a far higher and more fair share of taxes, a principle both Thomas Jefferson and Abraham Lincoln believed in. The proceeds from these tax hikes WITHOUT LOOPHOLES could easily fund health care, job creation efforts, and infrastructure projects combined. Then, wages MUST be raised for the poor and middle class. With more money in their pockets, those not at the top will spend more, creating new jobs, and making the rich a handsome profit. THAT'S the way it's supposed to work, NOT having the rich hold everybody else down while sucking their wallets dry. This country as a whole prosposed most when workers' incomes were slowly but steadily rising, and that scenario has got to begin anew today!
ah, gee, DITTO
esp. Lisa G
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I know that, Brother. I hope nobody thought that I was implying that you would support violence, as you are, like me, a pacifist. Lisa, I can confirm that Oso is wise.
Oso, Sheila doesn't turn me on, but her views do. I watched the same segment.
Thanks Jack. I'd love to get back to how it's supposed to work.
Gwen, you're late. No GOP Kool Aid for you!! 😉