The President doesn’t want you to worry about the financial meltdown. He’s “on top of the situation”. I feel much better now.
His flack Dana Perino also want to reassure you about that $30 billion loan to Bear Stearns on Friday. “I think that the actions that the Fed took yesterday, though, do not amount to a bailout,” Ms. Perino said. This is patent nonsense. Does anyone think the collateral mortgage securities Bear put up will be worth $30 billion when this all unwinds?
Meanwhile, Hillary Clinton, mindful of not pissing off her husband’s Wall Street benefactors tread very lightly.
“I’m not going to second guess the Fed,” Clinton said. “Now we are in the soup and we better get ourselves out of it before the consequences get drastic,” Clinton said.
If she and Bill are so disconnected from reality that they don’t already know the consequences are drastic, then we better revisit their “return to the good times” argument for a third Clinton term. Even Billary’s New York Times cheerleader Paul Krugman acknowledges that we are in for a ton of hurt. I suppose I need to remind my readers where this whole mess started. Sandy Weill went and bought Citibank when legally investment banks and money center banks were not supposed to merge.Bill Clinton and his Treasury Chief Robert Rubin (who subsequently became Vice Chairman of Citibank, pictured above) decided to OK the deal anyway. From there it was a slippery slope right into our current crisis as banks and investment funds needed to create “new product” (debt securities) to keep growing. The Clintons talk a good game about looking out for the little people, but its those $1 million contributors to the Clinton Charities Inc. that they are really looking out for. As the AP points out.
As senator from New York, Clinton has received the most money from employees of large Wall Street firms. Bear Stearns employees have given her the most, with total donations of $152,000. Likely Republican nominee Sen. John McCain received $47,000 from Bear Stearns employees and Obama got $36,000.
7 responses so far ↓
Josh C // March 17, 2008 at 7:05 pm |
Nice work. It needs to be remembered that Clinton quietly and passively oversaw these massive policy shifts.
It’s still funny to me though that all the conservative vitriol surrounding Clinton still focuses on his personal dealings and not the market imbalances he ushered in. But yes, we must still let the market rule.
rhb // March 17, 2008 at 11:17 pm |
“But yes, we must still let the market rule.”
But how about this time we let the shoppers have the advantage instead of the sellers. Instead feeding the maw of the corporate lenders, how about taking it directly to the people who need it most.
Giving away $30 billion, how about stimulating the economy by giving it to the people. Let them pay off their mortgages, credit card bills, and auto loans. Stabilize the economy from the bottom up. Forget that Reagon crap. Do you know anyone who really thinks that $600 in today’s dollar is real money? Well, anyone besides the President, that is. Just take a minute and think about it. If the central bank has the ability to give it to one corporation (which in legal terms is really just an individual) then why can’t it give it to each of the troubled mortgagees. That way there is no refi of the mortgage, sorry lending industry but that’s what you get for your punishment, it’s just paid off. Everyone gets to go back to zero and the whole damn economy is kick started.
Morgan Warstler // March 17, 2008 at 11:50 pm |
rhb, you seem to be getting angry.
If I agree to vote for Obama, will you promise to stop acting like this? Between now and the election, will you behave?
Jon Taplin // March 18, 2008 at 6:13 am |
Morgan- Don’t confuse rhb’s righteous indignation with anger. The fact that we bail out the Bear Stearns management, who were criminally negligent with their shareholders money as far as I’m concerned–and then tell homeowners facing foreclosure to pound sand. Well it can make a person angry.
rhb // March 18, 2008 at 6:25 am |
Lets see. JP Morgan Chase get Bear Stearn in a fire sale, get the buildings of Bear Stearn too, and predict that they’ll make a cool $1 Billion in profit. We get $600 after we pay our taxes and stuck with the bill for the $30 Billion bail out. Wow, that should make me really happy. I don’t know what I was thinking.
Josh C // March 18, 2008 at 6:57 pm |
So Morgan, you’re happy about having to pay 30 billion dollars for an obviously irresponsible company? We’re not going to see that money. Even if in ten years time there’s a functional/profitable Bear Stearns, do you think that money will come back to us? It’s our money don’t forget.
Privatized Profits & Socialized Risk « Jon Taplin’s Blog // April 27, 2008 at 8:17 am |
[...] As I have said before, Rubin’s fight to deregulate the banking industry while he was at Treasury has a direct link to the financial crisis we face today. in 1998, Brooksley Born, the chairwoman of the commodities commission, tried to push through a more stringent regulation of derivatives. Rubin went ballistic. Mr. Rubin made no secret of his feelings about her proposal. “It was controlled anger. He was very tough,” Mr. Greenberger recalls. “I was at several meetings with him, and I’ve never seen him like that before or after.” Ms. Born didn’t return calls for comment. Mr. Rubin says he was against the proposal because he feared it could create chaos in the markets, rather than actually improve oversight of derivatives. [...]