Barack Obama’s plan to tax banks to get “our money back” seems to be little more than a political response to the public outrage over his bailout of undeserving banks, hedge funds, automakers, and homebuilders.
For the record, Obama voted for TARP as a Senator. As President, he has implemented other giveaway programs to banks, including near 0% interest rates, taxpayer guarantees of bank deposits and money market funds, the Term Asset Securities Loan Facility, and worst of all, the so-called Public Private Partnership Investment Program. Obama has defended all these actions as necessary to preventing a collapse of the financial system. Now he wants to tax and vilify the same institutions he has been propping up?
If bailouts are so bad, why doesn’t Obama just stop them? On December 30, the administration poured another $3.8 billion down the GMAC rat hole, on top of the $13.4 already gone, with no apparent exit strategy. The main beneficiaries are the United Auto Workers and the politically connected Cerberus private equity firm.
The Christmas Eve bailouts of Fannie Mae and Freddie Mac put Santa Claus to shame. Both will now enjoy an unlimited credit line from taxpayers no matter how many more billions they lose. The two racked up a combined $71 billion in losses during the first three quarters of 2009. To oversee this rip-off, Obama’s administration approved annual compensation for Fannie CEO Michael Williams and Freddie CEO Ed Haldeman of as much as $6 million — all in cash.
Obama has refused to give us taxpayers “our money back” by applying unspent and paid-back TARP funds to the deficit. Instead, he has used or proposed to use TARP funds for all kinds of purposes unrelated to the banking crisis, and as in the case of the auto bailout, without statutory authority. He has treated TARP like found money when it is actually debt.
With only a couple of exceptions, big bank executives supported Obama’s presidential campaign. He appointed tax-cheat Timothy Geithner, a creature of Wall Street, as Treasury Secretary. Geithner promptly appointed Goldman Sachs’ lobbyist as his chief of staff. Geithner engineered the taxpayer bailout of AIG that has cost taxpayers over $100 billion but made whole Goldman Sachs and other AIG counterparties in credit default swaps.
Will Homebuyer Tax Credit Bankrupt FHA? (CNBC video)
Flaherty: Trust Market, Not Barney Frank (CNBC video)