Obama lied his ass off to us rubes who voted for him. But he sure keeps his promises to the overclass owners of “politics,” doesn’t he?
Today’s delivery, with its typical confirmation of the “bipartisan” [translated from the Doublepseak: non-partisan, one-party] nature of the system, requires no further comment. Even The New York Times can’t disguise this one:
White House Pares Its Financial Reform Plan
The Obama administration on Wednesday abandoned a…significant provision [of its alleged reform plan] in the face of widespread political and industry opposition.
At a hearing before the House Financial Services Committee, Treasury Secretary Timothy F. Geithner announced that the administration had dropped one provision in its plan for a consumer financial protection agency — a requirement for banks and other financial services companies to offer “plain vanilla” products, like 30-year fixed mortgages and low-interest, low-fee credit cards.
Mr. Geithner’s decision followed a wave of criticism by Democrats and Republicans, some with close ties to the industry, that the plan was the first step toward a new regulatory regime in which the administration would be handing new powers to government bureaucrats approving and disapproving a wide array of financial products.
Hold shares in a crashed bank, hedge fund, or major corporation? Here’s your bailout check, sir!
Live down the social ladder and hold a credit card you struggle to pay? Will you get some bail-out money? Nope. Maybe a mandated reduction of your interest rate? Nope. A cap at least on your present rate? Nope again. You get this instead:
Oh, huzzah! Now — oh, glorious day! — it will be slightly easier to know exactly how the bailed-out class is using its publicly-provided do-over to continue raping you. And they will, of course, have to rape you according to some new, very slightly slower timetables. With the Democrats in power now, that much goes without saying, you see.
Why? Well, this is capitalism. Our overclass needs a chance to over-accumulate some more capital, so they can fuel their next “investment” bubble. Will it be in tulips? Stocks? Collateralized debt claims? Survival shelters? That’s for them to say, and for us to bend over and take.
To make a long, sickening story short: You know any new law is a disaster when it passes the Senate, as this great fart-in-your-face did, 90-to-5.
Corporate capitalism’s babysitters, that charming, marketing-oriented group known as “politicians,” continue to equate giving free public money to banking corporations with doing something to redress (rather than exacerbate) the economic crisis that has emerged from a generation of pretending that the rich can’t can’t too rich.
Well, for your general use and enjoyment, here are some rare, behind-the-scenes admissions from the executives running the banks taking the handouts, as relayed in Saturday’s edition of The New York Times, in a story titled “Bailout Is a Windfall to Banks, if Not to Borrowers”:
♦“Make more loans? We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans…We see TARP as an insurance policy,” he said. “That when all this stuff is finally over, no matter how bad it gets, we’re going to be one of the remaining banks.” – John C. Hope III, the chairman of Whitney National Bank in New Orleans
♦Speaking at the FBR Capital Markets conference in New York in December, Walter M. Pressey, president of Boston Private Wealth Management, a healthy bank with a mostly affluent clientele, said there were no immediate plans to do much with the $154 million it received from the Treasury. “With that capital in hand, not only do we feel comfortable that we can ride out the recession,” he said, “but we also feel that we’ll be in a position to take advantage of opportunities that present themselves once this recession is sorted out.”
♦For City National Bank in Los Angeles, the Treasury money “really doesn’t change our perspective about doing things,” said Christopher J. Carey, the bank’s chief financial officer, addressing the BancAnalysts Association of Boston Conference in November. He said that his bank would like to use it for lending and acquisitions but that the decision would depend on the economy. “Adding $400 million in capital gives us a chance to really have a totally fortressed balance sheet in case things get a lot worse than we think,” Mr. Carey said. “And if they don’t, we may end up just paying it back a little bit earlier.”
♦Among the others, PlainsCapital Bank of Dallas announced in November, not long after the bailout program began, that it planned to merge with a healthy investment bank, First Southwest. PlainsCapital received $88 million from the Treasury on Dec. 19, and the all-stock merger was completed two weeks later. PlainsCapital’s chairman, Alan B. White, insisted in an interview that the two events were not connected. He said the bank had not yet decided what to do with its bailout money, which he called “opportunity capital.” Increased lending would be a priority, said Mr. White, who did not rule out using it for other acquisitions, adding that when regulators invited PlainsCapital to apply for federal dollars, there were no conditions attached. “They didn’t tell me I had to do anything particular with it,” he said.
♦At the Sandler O’Neill East Coast Financial Services Conference in Florida, bankers mingled with investment analysts at an ocean-front luxury hotel, where the agenda featured evening cocktails by the pool and a golf outing at a nearby country club. During his presentation, John R. Buran, the chief executive of Flushing Financial in New York, said the government money was a way to up the “ante for acquisitions” of other companies. “We can get $70 million in capital,” he said. “So, I would say the price of poker, so to speak, has gone up.”
All the while, the Elmer Fudds continue to pretend they’re really hunting the wabbits.
The Treasury secretary, Henry M. Paulson Jr., said in October that banks should “deploy, not hoard” the money to build confidence and increase lending. He added: “We expect all participating banks to continue to strengthen their efforts to help struggling homeowners who can afford their homes avoid foreclosure.”
The truth? “The [TARP] program does not dictate what banks should do with the money.”