The one main benefit to the financial reform effort so far is that it helps further do away with the false paradigms of "left" or "right" and "Democrat" or "Republican" - fewer and fewer people are falling for those lies anymore. Try to get an ideological conservative to explain why Republicans love spending and so eagerly give welfare to banks. Try to get your local liberal to explain why it was a good idea to make backroom deals with abhorrent corporations and drill, baby, drill. Heck, even try to get a Tea Partier to explain choosing bailout-loverSarah Palin to keynote their convention, especially when that movement once had at least some pre-astroturf roots in protesting government giveaways.
What we have now is a group of politicians with shifting alliances on a case-by-case basis to thespecial interests who fund them. And currently, the most damaging one to our nation is the rise of the Bankster Party. Thankfully, we can now better identify its members.
Anyone who voted for the Kaufman-Brown SAFE amendment deserves to be considered a member of the "People's Party", at least for today. And while I may not agree, I am also OK with someone voting no on Kaufman-Brown if they voted no on the bailout in the first place. That at least shows a consistent ideology and we wouldn't need to break up the banks into smaller parts if our leaders had the will to let them fail.
But there is a special place for those who have the audacity to do something as incredibly un-American as voting to provide unencumbered welfare for rich bankers and then subsequently do absolutely nothing to fix the problem. And that special place (for now) is in what we should call from this point forward the "Bankster Party". Allow me to present to you its current members:
BANKSTER PARTY Daniel Akaka (B-HI) Lamar Alexander (B-TN) Max Baucus (B-MT) Evan Bayh (B-IN) Michael F. Bennet (B-CO) Christopher S. Bond (B-MO) Richard Burr (B-NC) Thomas R. Carper (B-DE) Saxby Chambliss (B-GA) Susan M. Collins (B-ME) Kent Conrad (B-ND) Bob Corker (B-TN) John Cornyn (B-TX) Christopher J. Dodd (B-CT) Dianne Feinstein (B-CA) Lindsey Graham (B-SC) Chuck Grassley (B-IA) Judd Gregg (B-NH) Orrin G. Hatch (B-UT) Kay Bailey Hutchinson (B-TX) Daniel K. Inouye (B-HI) Johnny Isakson (B-GA) John F. Kerry (B-MA) Amy Klobuchar (B-MN) Herb Kohl (B-WI) Jon Kyl (B-AZ) Frank R. Lautenberg (B-NJ) Joseph Lieberman (B-CT) John McCain (B-AZ) Claire McCaskill (B-MO) Mitch McConnell (B-KY) Robert Menendez (B-NJ) Lisa Murkowski (B-AK) Bill Nelson (B-FL) Jack Reed (B-RI) Charles Schumer (B-NY) Olympia Snowe (B-ME) John Thune (B-SD) Mark Udall (B-CO) George Voinovich (B-OH) Mark Warner (B-VA)
PEOPLE'S PARTY Mark Begich (P-AK) Jeff Bingaman (P-NM) Barbara Boxer (P-CA) Sherrod Brown (P-OH) Roland Burris (P-IL) Maria Cantwell (P-WA) Bejamin Cardin (P-MD) Robert Casey Jr. (P-PA) Tom Coburn (P-OK) Byron Dorgan (P-ND) Richard Durbin (P-IL) John Ensign (P-NV) Russell Feingold (P-WI) Al Franken (P-MN) Tom Harkin (P-IA) Edward Kaufman (P-DE) Patrick Leahy (P-VT) Carl Levin (P-MI) Blanche Lincoln (P-AR) Jeff Merkley (P-OR) Barbara Mikulski (P-MD) Patty Murray (P-WA) Mark Pryor (P-AR) Harry Reid (P-NV) John D. Rockefeller IV (P-WV) Bernard Sanders (P-VT) Richard Shelby (P-AL) Arlen Specter (P-PA) Debbie Stabenow (P-MI) Tom Udall (P-NM) Jim Webb (P-VA) Sheldon Whitehouse (P-RI) Ron Wyden (P-OR)
Editor's Note: Published below Les Leopold's article is Dylan Ratigan's 5-point takedown of Geithner and why it's time for him to go.
"An arm of the Federal Reserve, then led by now-Treasury Secretary Timothy Geithner, told bailed-out insurance giant AIG to withhold key details from the public about overpayments that put billions of extra tax dollars in the coffers of major Wall Street firms, most notably Goldman Sachs." Huffington Post
Cover-up revelations keep coming about Timothy Geithner's secret assistance to AIG. The latest show that he urged AIG not to disclose how it would be shoveling money to Goldman Sachs and other large financial institutions by paying off its credit default swaps at par value instead of much less.
More than $60 billion changed hands that shouldn't have if Geithner had played hard ball. Therefore, the charge is that Geithner should be bounced because he was protecting the banks' interests ahead of the public interest. He may also have protecting himself during his confirmation hearings.
Ok, string him up. But what about recapturing the loot?
Before we pull the rope, let's take a closer look at this outrageous scam. During the bubble years, AIG conducted an extremely lucrative business guaranteeing all kinds of derivatives based on risky debt. They couldn't call it insurance because insurance products are regulated --- meaning you need to have reserves to back them up, which they didn't. So these toxic assets insurance polices instead got the fancy name "credit default swaps," which were not and still are not regulated. (Take a bow Phil Gramm, Robert Rubin, Bill Clinton and Alan Greenspan.)
This was the mother of all profit making businesses for AIG because in many of these deals AIG didn't have to put up any collateral as long as AIG was AAA-rated. The counter-parties (i.e. Goldman Sachs, JP Morgan Chase...) figured AIG was good for it. So AIG raked in fees for insuring toxic assets and didn't have to put up anything in return. Free money!
AIG figured the best hedge and the most money could be made by insuring more and more of this risky stuff. This was thought to disperse the risk broadly since all of the junk debt couldn't possibly fail at the same time, could it? They "insured" over $450 billion worth. (For the sordid details and comic relief, please see The Looting of America )
Then, the unthinkable happened. The assets tanked and AIG had to pay up on its policies, but couldn't. It was about to fold. Had AIG gone under it may have pulled with it hundreds of other financial institutions around the world that were relying on its insurance. The government stepped in to bail them all out. (AIG now spreads the fiction that this was just one rogue operation over in England in an otherwise safe and sound empire. But the big boys at the top of AIG all knew the credit default swap operation was a delectable source of enormous profits and shared in the booty... and they're not giving back any of the ill-gotten gains.)
We can argue some other time about whether or not some kind of bailout was necessary or what we should have gotten in return. The point here is that big fat financial houses like Goldman Sachs would have received pennies on the dollar for their AIG-backed credit default swaps had AIG gone into bankruptcy court. Instead, Goldman and others received par value and that money is now funding their mammoth profits and bonuses. (Spewing more corporate fiction, Goldman Sachs and JP Morgan Chase say they had been carefully hedged and would not have suffered from an AIG bankruptcy. Baloney. If AIG had gone under without a Federal rescue, those big banks would have gone down too or teetered on the edge.)
Here is precisely where free-market capitalism metastasizes into the billionaire bailout society. Goldman Sachs believed they had adequately covered $12.9 billion of its toxic assets by purchasing insurance from AIG. In fact, they believed those toxic assets plus the insurance made them as good as gold and part of their capital base.
In effect Goldman had placed two kinds of bets. First they bet on the toxic assets which were extremely lucrative, but risky. Then they bet that AIG could successfully insure them against losses on that first bet. They lost both bets. Too bad. That's capitalism....or used to be.
For losing their bet with AIG, Goldman Sachs should have only received about 20 cents on a dollar in a bankruptcy court. Instead, we bailed out AIG to prevent bankruptcy and Geithner et al pressured AIG to give Goldman Sachs 100 cents on the dollar. As a result, Goldman Sachs suffered no negative consequences at all from betting and losing. That's not capitalism. That's our new billionaire bailout society, where we, the taxpayers, pay off the bad bets. And the super-wealthy get more wealthy even when they lose their bets.
Think about it. Goldman Sachs alone got $12.9 billion - found money. Ka-Ching--right into its bonus pool. (OK, let's be fair. In bankruptcy they may have received $2.58 billion so the net windfall was $10.32 billion, which is about what it would cost to hire 172,000 teachers for one year.)
By all means, let's fire Geithner, and Summers too while we're at it. But if we really want to see some semblance of justice, we should slap a 90 percent windfall profits tax on all Wall Street firms. No matter how you cut it, they're all on welfare and their profits stem directly from our largesse. (Even those banks that have paid back TARP are, right this very minute, at the federal trough sucking up trillions of dollars of federal liquidity programs and asset guarantees.)
If the surging Tea Party really believed in its anti-bailout rhetoric, they'd be screaming for a windfall profits tax. But instead they so hate government and taxes that they'd rather let the biggest bankers in the world take our money and laugh all the way to the bank....in the Cayman Islands.
***
The Case Against Geithner -- by MSNBC Host Dylan Ratigan
As we sit here today, Wall Street continues to exploit a policy of government-sponsored giveaways and secrecy to pay themselves billions.
Record-setting bonuses due to banks like Goldman Sachs as early next week.
Yet instead of acting as our cop, Secretary Tim Geithner has become central to what may be a cover-up of the greatest theft in U.S. history.
Here is the evidence.
COUNT 1: The AIG Emails:
Recently-released emails show Geithner's New York Federal Reserve Bank directing AIG to keep details of the 100-cents-on-the-dollar bailout secret in 2008 -- A reversal of the traditional role of government, which is to force companies to become more transparent, not less.
A Treasury Spokeswoman says: "Secretary Geithner played no role in these decisions and indeed, by November 24, he was recused from working on issues involving specific companies, including AIG."
Friday, the White House also defended the Treasury Secretary:
Gibbs: These decisions did not rise to his level at the fed.
CNN's Ed Henry: How do you know that he wasn't involved? He was the leader of the New York Fed.Gibbs: Right, but he wasn't on the emails that have been talked about and wasn't party to the decision that was being made.
He wasn't party to a decision to hide $62 billion dollar payouts to firms that became insolvent during his 5-year watch at the New York Fed?
Congressman Darrell Issa speculates that maybe Geithner wasn't on the emails in question because his people felt so strongly they already knew their boss's intentions, they didn't feel the need to bother him with the details.
COUNT 2: He wasn't even a regulator!
In Geithner's own words during confirmation hearings in March:
"First of all, I've never been a regulator...I'm not a regulator."
According to the New York fed bank's website, that was your job!! And I quote from the Fed's website: "As part of our core mission, we supervise and regulate financial institutions in the Second District."
That district of course is the epicenter for bailed out banks and billion dollar bonuses.
Count 3: "The Christmas Eve Taxpayer Massacre."
As you were wrapping those last presents, Geithner's Treasury Department lifted the 400-billion dollar cap on taxpayer responsibility for potential losses for Fannie Mae and Freddie Mac.
The new cap? Unlimited taxpayer funds! Interesting timing... Christmas eve, Tim?
Still no word on recovering the hundreds of millions paid to the CEOs who created this mess.
COUNT 4: He's too cozy with certain banks.
Remember those call logs when he first started... 80 contacts with Goldman Sachs, JP Morgan, and CitiGroup CEOs in just 7 months!
But Bank of America's CEO only got three calls. Apparently Bank of America is not one of Geithner's favorites, especially when you consider that there are still many unanswered questions about Tim Geithner's role in threatening to fire Bank of America management if they didn't go through with a deal to buy Merrill lynch.
COUNT 5: TARP Special Investigator Neil Barofsky's report says Geithner's New York Fed overpaid the big banks through AIG by billions of dollars.
Geithner says it had to be done. Maybe so, maybe not, but this takes us to our final point.
Since then, the Treasury Secretary has yet to really prove whose side he's on -- the Wall Street big wigs or the American taxpayer? Here's the litmus test: Mr. Geithner, show us the past ten years of AIG emails or step down so that we can get somebody who will. A crime has been committed against the American taxpayer and right now you are standing at the door of the crime scene refusing to let anyone in.
Show us you're not involved Mr. Geithner, prove the white house correct in defending you. All we are asking for is the transparency promised by the President you serve.
Visit msnbc.com for breaking news, world news, and news about the economy
Visit msnbc.com for breaking news, world news, and news about the economy
By Dylan Ratigan
November 12, 2009 | Huffington Post
One thing about doing a two hour show that heavily covers both the financial crisis and the wars in Iraq and Afghanistan is that you notice on a daily basis the shocking juxtaposition between the lucky Wall Streeters and the unlucky soldiers.
We all know at this point that our banking system is being used as an unregulated bonus-seeking mechanism for bankers, now underwritten by taxpayers with $23.7 trillion worth of national wealth.
Bankers lent pretend money to home buyers to award themselves actual money in bonuses -- making home prices balloon and, in the process, bankrupting America's treasury, currency, the states, and many of its citizens.
To simply let the housing market rapidly correct itself (or more likely over-correct) would result in massive societal disruption, possible violence and unnecessary suffering.
So while we slowly attempt to close the taxpayer-funded bank casinos and try to restore the basic rules of investment and lending in our economy, we have difficult decisions to make. Unfortunately, our only choice for a less jarring social transition so far has been to artificially adjust the real prices of our homes via government guarantees to banks (for bad mortgages and losing gambling bets) -- or relatively arbitrary handouts to home buyers.
What did these people do to deserve the handout?
How do you feel about a Wall Street Banker who has been renting an apartment here in New York and this year combined the bonus money he made on bundling new taxpayer-sponsored Fannie Mae CDS with a first-time home buyers tax credit gift from the taxpayers to buy the penthouse in his building?
Meanwhile, we have already been at war for 8 years with no end in sight. World War II was 5 years. We are fighting these wars with the fewest number of soldiers in modern U.S. History. To avoid incorporating a politically unpopular draft, we deploy the same soldiers five or six times with comparatively minuscule breaks in between.
However, the dire state of the economy has been a boon to military recruitment, but I am not sure if we will ever see the Wall Street bank scammers claim their rightful credit for that.
So instead of using these bad- (Wall Street) to- arbitrary (first time home buyers) ways to pump money into rescuing our housing market, let's give it to those who are truly deserving of handouts: our servicemen and women.
I propose that we immediately enact the following:
Considering the roughly 2 million veterans who have served in Iraq and Afghanistan so far, this would give a much needed $100 billion boost to the housing market. Just as a template for comparison, Goldman Sachs (albeit it doing "God's work") and the other complicit banks like JP Morgan and Morgan Stanley will pay $29.4 billion in personal bonuses this year.
In reporting on this financial crisis, I have been most surprised by the blatant disregard that our politicians and even some journalists have shown for the most fundamental American notion of fairness. I don't think handing taxpayer trillions to some of the least worthy individuals is something that our country will stand for, regardless of what the current incumbents think.
If we must resort to handouts to save our country, let's at least put them in the hands of the most deserving.
Dylan Ratigan hosts MSNBC's "Morning Meeting," M-F at 9AM ET and "The Dylan Ratigan Show" on WABC Radio, Sunday at 7PM ETVisit msnbc.com for Breaking News, World News, and News about the Economy
