It’s not doing what they claimed it would do:
The 700-billion-dollar US government effort to rescue the financial system has failed to meet key goals such as sparking lending and curbing risky activities by banks, a special auditor said Sunday.
The special inspector general for the Troubled Asset Relief Program said in a report to Congress that it is too soon to measure the overall success of the program passed at the height of the financial crisis in October 2008.
The quarterly report said that because of TARP, “there are clear signs that aspects of the financial system are far more stable than they were at the height of the crisis in the fall of 2008.”
Talk about a low bar. Doing nothing would have accomplished that, and at 100% less the cost!
Comments
Print This Post
The outrageous story of the week is Obama’s decision to try and sneak this by during Christmas:
The Obama administration pledged Thursday to provide unlimited financial assistance to mortgage giants Fannie Mae and Freddie Mac, an eleventh-hour move that allows the government to exceed the current $400 billion cap on emergency aid without seeking permission from a bailout-weary Congress.
The Christmas Eve announcement by the Treasury Department means that it can continue to run the companies, which were seized last year, as arms of the government for the rest of President Obama’s current term.
Merry Christmas, and have a Happy New Year of watching government continue to do all the same idiotic meddling that destroyed our housing and financial markets.
Comments Print This Post
This won’t be the first time the subject has been discussed on this blog, but the determination of many to paint last year’s financial implosion as a failure of capitalism requires diligence and constant restatement of the truth. The truth is exactly what Steven Horwitz and Peter Boettke bring in their new report, “The House that Uncle Same Built: The Untold Story of the Great Recession of 2008,” published by the Foundation for Economic Education.
From the introduction:
The theme of “The House that Uncle Sam Built: The Untold Story of the Great Recession of 2008” is that government policy, not a failure of free markets, caused the economic trauma we have been experiencing. We do not live in a free market. We live in a mixed economy. The mixture varies by industry. Technology is primarily free. Financial Services is primarily government. It is not surprising that the most government regulated and controlled segment of the economy, financial services, experienced the biggest problems. These problems were created by actions by the Federal Reserve combined with government housing policy (especially the government-sponsored enterprises – Freddie Mac and Fannie Mae). Misguided government interference in the market is the real culprit in laying the foundation for the Great Recession.
The entire essay is available as a pdf here.
Hat-tip: The Locker Room
Comments Print This Post
Government interventionist used the pretense that some organizations are “too big to fail” to justify unpopular corporate giveaways euphemistically referred to as “bailouts.” Now they’re taking this same false premise and using it to lay the groundwork for socialism.
The New York Times manages to reach a new low by trying to paint this unprecedented government takeover of industry as the moderate choice. The article cites no one who questions the premise and interventionist assumptions, and instead finds only critics who say this isn’t enough. They are the new fifth column.
Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble.
A senior administration official said on Sunday that after extensive consultations with Treasury Department officials, Representative Barney Frank, the chairman of the House Financial Services Committee, would introduce legislation as early as this week. The measure would make it easier for the government to seize control of troubled financial institutions, throw out management, wipe out the shareholders and change the terms of existing loans held by the institution.
What is the plan for when government is too big to succeed? We need to make it easier for the people to seize control of troubled governmental institutions, throw out elected officials, wipe out the bloated bureaucracy and change the terms of existing laws designed to benefit the few at the expense of the many.
Comments Print This Post
Just so that we remember the central planning began under Bush.
Former Treasury Secretary Henry Paulson says he was justified last year in suggesting that Bank of America Corp.’s chief executive could lose his job if the bank backed out on plans to buy troubled Merrill Lynch.
…In prepared testimony, Paulson said he told Bank of America CEO Kenneth Lewis last year that reneging on his promise to purchase Merrill would show a “colossal lack of judgment.”
Paulson said that “under such circumstances,” the Federal Reserve would be justified in removing management at the bank.
Rep. Issa nails it:
CommentsRep. Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, said Paulson’s testimony makes clear that the government became too involved and misused its power.
“It is a threat to the foundations of our free society when government officials, acting in the midst of a crisis, use dire predictions of imminent disaster to justify their encroachment on our individual liberty and the rule of law,” said Issa.
Print This Post
First, the government forced banks, at figurative gun point, into accepting TARP funds. Now the government says they can’t just pay the money back and be free of heavy-handed government meddling.
Strong banks will be allowed to repay federal bailout funds, but only if such a move passes a test to determine whether it is in the national economic interest, the Financial Times reported on Sunday, citing a senior U.S. administration official.
The report said banks that had plenty of capital and demonstrated an ability to raise fresh capital from the market should, in principle, be able to repay government funds.
But the judgment would be made in the context of the wider economic interest, the report said.
I can think of few things scarier than government bureaucrats purporting to determine what’s in the national economic interest.
American businesses take heed: don’t get in bed with government.
Comments Print This Post
The attacks on capitalism being led by the likes of Barack Obama and Mario Cuomo have consequences.
The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.
DEAR Mr. Liddy,
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
…
Read the entire letter.
Comments Print This Post
Never let a good crisis go to waste. King Obama wants to give Prince Geithner authority to seize non-bank financial companies. Once the government has control of the nation’s entire financial apparatus, Obama’s socialist transformation may be unstoppable.
The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.
The government at present has the authority to seize only banks.
Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.
The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury’s role, are still in flux.
Let me be perfectly clear about this bill: it must be stopped at all costs. If such a bill passes, it will mean the end of capitalist(-ish) America.
Obama’s socialist ties were exposed during the campaign, but we were told we just couldn’t call him that. How dare we call him a socialist; why, that’s hyperbole! But now we have all the proof we need.
He wants the government to run the entire economy. That is socialism, and those who seek to advance it must fail. It is the obligation of those who believe in freedom to ensure that they do.
Comments Print This Post
When Mark Sanford compared Obama’s stimulus package to Zimbabwe’s banana republic, grievance-monger and House Majority Whip Jim Clyburn (D-victim) was up in arms, describing the comment as “beyond the pale.” Why, he asked, did he pick Zimbabwe?
Now you know why, Mr. Clyburn:
The Federal Reserve yesterday escalated its massive campaign to stabilize the economy, saying it would flood the financial system with an additional $1.2 trillion.
The decision by the Fed to buy government bonds and mortgage-related securities is designed to lower borrowing costs for home mortgages and other types of loans, thereby stimulating economic activity. The central bank, effectively, will print more money to pay for the purchases.
Sound familiar?
Zimbabwe’s Leader Says He’ll Print More Cash
President Robert Mugabe has promised to print more money to fund municipal projects, a government newspaper reported Saturday. The pledge came despite hyperinflation that has created severe shortages of cornmeal, meat, milk and other staples.
So, how’s that working out for Zimbabwe?
Comments Print This Post
President Obama has been working hard to spread his message of populist outrage at AIG’s daring to pay its employees. As usual, the story isn’t what the democrats, and some republicans, would have us believe. Here’s some readings to show you why:
The AIG Outrage, by Larry Kudlow at National Review.
The Real AIG Outrage, from the WSJ.
Amid AIG Furor, Dodd Tries to Undo Bonus Protections in the ‘Dodd Amendment’ Rules
Comments Print This Post
Sorry, no posts matched your criteria.
I am a libertarian-conservative blogger living in the DC area. I have a Master's degree in Political Science, but please don't hold that against me.
