As reported by Naomi Klein last week the bail-out was nothing, but a fraud and quite frankly the Bush administration committed acts that might be considered criminal. I will link to this article, but will also give the sorted details in brief.
Last week as Ben Bernanke and Henry Paulson as well as some minions came to Washington to explain just how the bail-out was going we learned interesting tidbits that are not being reported in the press. Surprise, surprise. First, "in a moment of high panic in September, the US treasury pushed through a radical change in how bank mergers are taxed - a change long sought by the industry. Despite the fact that this move will deprive the government of as much as $140bn in tax revenue, legislators found out only after the fact. According to the Washington Post, more than a dozen tax attorneys agree that "[the] treasury had no authority to issue the [tax change] notice." It is not just the brilliant Klein who reported this, however the bastion of free market capitalism the Washington Post reported on it as well.
So, while we bail-out these huge companies giving them 700 billion in revenue they change a law unchallenged and behind the American people's back so they can avoid taxes?! What is the Democratic response? Nothing.
Secondly, of equally dubious legality are the equity deals the treasury has negotiated with many of the banks. According to Congressman Barney Frank, one of the architects of the legislation that enables the deals: "Any use of these funds for any purpose other than lending - for bonuses, for severance pay, for dividends, for acquisitions of other institutions ... is a violation of the act." Yet this is exactly how the funds are being used.
Lastly, in addition to the $700 billion banks have been given as a gift for hijacking the American people, the Federal Reserve has also loaned out $2 trillion dollars in emergency loans. Where is this money you ask? Incredibly, the Fed will not reveal which corporations have received these loans or what it has accepted as collateral. Bloomberg news service believes this secrecy violates the law and has filed a federal suit demanding full disclosure.
The democrats are squarely absent from the conversation. Barack Obama constantly lets us know, "there is only one President at a time." Of course this is true, but these new policies not allowed by anyone, but the Bush administration has the ability to as Klein puts it, "hobble Obama's ability to make good on his promise of change." For instance, Obama's renewable energy plan is almost the exact amount of money being stolen from the American people because of the unilateral rule change by the Treasury Department.
Obama wants to be a bi-partisan President, which sounds nice, but these people play hard ball and care not for regular Americans. They are not playing in the agreed upon rules and Obama and the Democrats have a responsibility to highlight this. The reason Klein gives for their silence is this: I suspect the real reason the Democrats are failing to act has less to do with presidential protocol than with fear: fear that the stock market, which has the temperament of an over-indulged two-year-old, will throw one of its world-shaking tantrums.
She has more faith in the democrats than me. What I have seen over my adult life gives me no faith in the new Congress or in fact, a man I worked my heart out for, Barack Obama. I am glad we no longer have to worry about our place in the world because indeed it will be restored. But, I doubt heavily that anything significant will change in the way we do business with the rich and powerful and the not so rich and powerful. The rules are set up so that regular people will fail. Is that going to change?
I am not interested in rhetoric anymore. We need a President that will listen to every day Americans and we need to hear him now. I want to know what is going to change. Will we have Regulations that actually stop lenders and banks from merging into gargantuan companies that cannot fail (a move by the way that was made under the Clinton administration)? Citigroup is ready to fail and is going to be bailed out momentarily. Are we going to break up this huge conglomerate corporations? Are we going to stop lengers from predatory lending? Subprime mortgages? What, what is going to change?