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 ➡

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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 ➡

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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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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 ➡

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Will Bailed-Out Companies Shell Out for Sharpton?

GM logThe 11th annual convention of Al Sharpton’s National Action Network (NAN) will take place April 1-4 in New York City. Last year’s event in Memphis had heavy corporate sponsorship. Of course, a lot has changed since then. Sponsors like Citigroup, Chrysler and General Motors have gone broke, kept alive by billions in taxpayer funds.

Healthier 2008 sponsors include Abbott Laboratories, Allstate, American Honda, Anheuser-Busch (since acquired by InBev), Chase Foundation, Colgate-Palmolive, Continental Airlines, Entergy, FedEx, Ford, Home Depot, Johnson & Johnson, PepsiCo, Pfizer, UPS Foundation and Wal-Mart.

At the event, Colgate-Palmolive accepted a “corporate excellence” award, prompting NLPC to ask the company to give it back. In a letter to Reuben Mark, the company’s Chairman, NLPC President Peter Flaherty called the award “a dubious honor indeed.”

In an April 22 letter defending the award, Mark asserted that the NAN convention was “broadly attended by a number of elected officials and … Read More ➡

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