Another Trillion to Buy Toxic Assets? What Was TARP For?

money reducedIf Barack Obama wants another trillion or more for toxic-asset purchases, what was the TARP for?  The burden is on him and Timothy Geithner to explain why another Wall Street bailout will work when the previous ones have not.

This latest plan would have the taxpayer finance the purchase of troubled assets, opening the door for unregulated opaque entities like hedge funds to speculate with taxpayer funds. This “public-private partnership” might also be called the Obama Hedge Fund Bailout.

When TARP was passed by Congress in October, its purported purpose was to buy toxic assets from banks. Instead, the $700 billion has been used to buy preferred stock in banks, bail out the automakers, and now bail out the automakers’ suppliers.  Yet these stock purchases have failed to prevent the deterioration of bank’s capital positions, even as common stock, held by millions of small investors, has been crushed.

Former Treasury … Read More ➡

Rangel Wants 90% Tax Rate for Wall Street; 0% for Himself

Rep. Charles Rangel (D-NY) would seem an unlikely point man for the legislation passed by the House yesterday imposing a 90% tax on any bonuses given to employees with family incomes of more than $250,000 at firms that received more than $5 billion in bailout funds.

As exposed by NLPC, Rangel failed to pay federal income tax on rent received from his beachfront home in the Dominican Republic, and cheated on his D.C. property tax by improperly claiming a homestead exemption. Also, Rangel led a Citigroup-funded Caribbean junket last November that violated House rules.

After the 328-93 vote, the indignant Rangel warned,  “Don’t dare try to take a bonus and get away with it.”

In a CNBC interview, Rangel was challenged on his moral authority to lead the floor fight for the bill. Strangely, Rangel seemed to deny the “false” reports about his own tax evasion, even though he admitted … Read More ➡

Where Was Congress on Bonuses in 2004?

obama/rainesNLPC issued a press release on December 29, 2004 that began:

Peter Flaherty today expressed surprise and disgust at the current attempt by fired Fannie Mae Chairman and CEO Franklin Raines to walk away with millions of dollars despite his central role in the accounting scandal rocking the company.

According to Flaherty, “At the time, I remember having very little luck in drumming up interest in this issue. I was a guest on a couple of local radio shows, but that was it. I made a round of calls to Capitol Hill but nobody wanted to do anything.”

The release continued:

Flaherty said, “Let me get this straight. Raines apparently cooks the books, brings disgrace to the company, and imperils Fannie Mae’s standing with regulators, the Congress and administration. So for his punishment he is made wealthy for the rest of his life?”

According to a December 27 Form 8-K

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Analysis: Obama Stimulus Plan Invokes Keynes

Keynes photoThe $787 billion economic stimulus package passed and signed into law last month had any number of co-sponsors in Congress, but in a real sense its main author was someone deceased for more than 60 years:  John Maynard Keynes.  The measure, and proposals subsequent to it, represent a tribute to a highly flawed, though highly original thinker.  They also speak of a larger ongoing and recent pendulum shift in theory and policy. 

         

Much has been written, and deservedly so, about President Obama’s sense of racial grievance; his radicalism; his circle of Chicago friends and fixers; and his intense identification with Abraham Lincoln.  Yet only recently that level of attention has been given to his worldview, all but in name Keynesian, to the current economic crisis.  The president and his neo-Keynesian top economic advisers – Lawrence Summers, Timothy Geithner and Christina Romer – have Read More ➡

Why Won’t Obama Stop AIG Bonuses?

AIG logoBarack Obama has shown no hesitation to wield the power of the state, but he claims that he’s unable to stop these outrageous AIG bonuses, even though taxpayers now own 80% of AIG.

Obama wants the government to dominate the health care and energy economies. He’s proposed huge new taxes to help finance expansion of the federal government. More to the point, he would allow bankruptcy judges to abrogate contracts as part of his mortgage bailout. His automaker bailout contemplates the setting aside or revision of UAW contracts.

It is astonishing that these bonuses will be paid to executives at AIG’s financial products division, the unit that wrote trillions of dollars’ worth of credit-default swaps. AIG placed bets on derivative trades that it could not possibly pay off if it lost. This is called fraud. These bad bets were big enough to bring down the financial system.

Instead of claiming … Read More ➡

More Scrutiny for Murtha as Investigative Noose Tightens

Politico reported on March 11:

Over the course of the past decade, Rep. John P. Murtha has earmarked millions of dollars for the Electro-Optics Center at Penn State University — money that has, in turn, gone to clients of the PMA Group, the Murtha-linked lobbying shop that was raided in November as part of a federal criminal probe.Murtha Pelosi photo

PMA may soon be Murtha’s undoing. The firm was founded by his top operative Paul Magliocchetti, who is now reportedly under investigation for making campaign donations in the names of other people. Campaign finance violations are not treated seriously by prosecutors, except for this one. The result can be prison time and big fines. If faced with the prospect of jail, would Magliocchetti turn on Murtha?

PMA has collapsed as most of it’s lobbyists have quit. It’s quite a fall from last year when it ranked as the 10th-biggest Washington lobbying firm … Read More ➡

Rep. Mollohan’s Foundation Got Free Rent From Earmark Recipient

WVHTC buildingRoll Call reports today:

The West Virginia High Tech Consortium has provided more than $75,000 in free rent and administrative services to the Robert H. Mollohan Family Charitable Foundation, according to tax records, while receiving millions of dollars worth of earmarks from Rep. Alan Mollohan (D-W. Va.), who serves as the family foundation’s secretary.

Questions about Mollohan’s foundation are not new. Michael Forsythe of Bloomberg News reported on June 22, 2006:

Mollohan helped funnel at least $179 million in U.S. government contracts over the last six years to companies that gave to the West Virginia Democrat’s family-run charity, tax records and other documents show.

The money went to 21 companies and nonprofit groups that contributed $564,427 to the Robert H. Mollohan Family Charitable Foundation from 2002 to 2004 — almost half of the charity’s revenue, according to the documents. The congressman, an Appropriations Committee member whose finances are under federal

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