Sunday, November 16, 2008

Dennis Kucinich Investigates Treasury's Blank Check

I don't know about you, but by the time Hankie Paulson finished speaking Friday I was looking around for the federal marshals to start coming out of the woodwork to arrest the thieves and scoundrels who had just admitted that there was (essentially) no collapse of institutions at all (Surprise!) - except for the auto companies - which we don't much care about anyway , and that our "caretakers" now were going to use what was left of the paltry sum of $750 billion (just the first installment of absolutely necessary NOW taxpayer money) to finish the takeover of small banks by giving more of the stolen money to the big banks (formerly investment houses!). (And, once again, do not research the Goldman Sachs connections. Please! (You will not sleep well ever again.)) Or maybe I misunderstood what "not purchasing toxic assets" (the originally stated reason for the rapid raid of the public treasury) and doing other things with the moolah meant. (Right. And, of course, it turns out that a lot of these would have been very bad purchases indeed (which they knew about at the time - like the rest of us did).) Listen to our public servant "Kneel down and say 'please' Cash-and-Carry" explain it all to you. (And he got points from the Repugni-Cons for being polite as he made off with the cash!) His final red herring argument is particularly demeanor-ful. And don't believe for a moment that anyone still in charge (Cheney/Bush/Shelby Economic Rah-Rah Team) will do anything to stop the slide into Depression with an economic stimulus anytime soon. As a matter of fact, according to Richard Shelby this morning on Bob Schieffer's CBS Rethugli-Con lovefest, it seems that they are looking forward to it. As my Mother said to me some time ago, "Thank God for Dennis!" (Emphasis marks are mine - Ed.)

Dennis Kucinich Investigates Treasury's Blank Check (The House Committee on Oversight and Government Reform, which contains Kucinich's subcommittee, has been holding a series of hearings investigating the financial crisis. Mother Jones covered the hearings on Lehman Brothers, AIG, credit rating agencies, federal regulators, and hedge funds.) It looks like the Bush administration can create its own reality after all. Just this week Treasury Secretary Henry Paulson turned the $700 billion bailout from a program to purchase toxic assets from troubled financial institutions to one that will invest in banks. Understandably, this abrupt change of course angered members of Congress, who were now left to wonder if they'd been led astray in supporting the stimulus package. At a hearing on Friday, convened to examine the Treasury Department's use of the bailout funds, lawmakers on both sides of the aisle vented their outrage. The question is whether their displeasure will make a dime's worth of difference. Displaying the range of congressional discontent, both Rep. Dennis Kucinich (D-Ohio), the chair of domestic policy oversight subcommittee, and Rep. Darrell Issa (R-Calif.), its ranking member, accused the Treasury of a "bait-and-switch" and questioned Neel Kashkari, the 35-year-old former Goldman Sachs banker selected by Paulson to supervise the bailout, about the sudden reversal. In response, Kashkari explained that Treasury had "worked very hard with Congress" to negotiate the bailout bill, but as the financial crisis worsened in the weeks following the bailout's passage, Paulson felt he "had to take very aggressive action." And Kashkari assured the committee that his boss had only decided "late last week, earlier this week," that the plan had to change. Issa, who voted against the bailout, suggested that the agency had planned all along to ignore the specific provisions of the bailout and instead wield the broad authority Paulson had originally demanded. "Congress is feeling you played a bait and switch game," Issa said. Fuming that Treasury had ignored congressional provisions in the bailout bill to buy troubled mortgage assets and help homeowners in jeopardy of foreclosure, Kucinich charged, "The Secretary just took some scissors and cut it out." He also accused the administration of still relying on trickle-down economics to fix the financial crisis. "You have to get money into the grass roots. In your model you just have some trickle down and it never trickles down, everyone knows that." Kashkari, the interim assistant secretary for financial stability, remained remarkably calm and painstakingly polite in the face of tough questioning, often using phrases like "with deep respect" and "I understand your concern." His demeanor won him some points — Rep. Brian Bilbray (R-Calif.) called him "probably the best spokesman the administration has." Kashkari repeatedly stressed that if Treasury had spent the entire $700 billion buying home loans, they would have been able to buy about 3 million of them — a small fraction of America's 55 million outstanding. By injecting money into the banks instead, the Treasury "influenced almost every loan in America," Kashkari claimed. But the fundamental conflict remained. Congress had mandated one bailout, and Paulson and the Treasury Department are executing a different one. "The legislation we asked for was to prevent a complete financial collapse," Kashkari said. "We are every day trying to figure out how to stabilize the system so we can help everyone. My phone is ringing off the hook. But if we went out and helped everyone who needs it directly the $700 billion wouldn't go far enough." Kashkari said that's why Treasury has to work from the top-down, helping banks first. Kucinich, who voted against the bailout, said he was confident Congress would never have approved it if lawmakers had known Paulson would change the plan. But the fact remains: the bailout is law. Perhaps Paulson got his blank check after all.
(Dennis' home in Cleveland was attacked by vandals on November 11 almost simultaneous with the death of his younger sister. This has no connection, of course, with his trouble-stirring in Congress.) - - - - - - - - Happy days are here again (for the new big banks anyhow)? Suzan __________________________________


gandalf43 said...

I understand that the testimony at the hearings by U.S. Representative Kucinich's subcommittee is by the heads of various regulatory authorities and other "bigwigs."

These bigwigs are testifying that during the years leading up to this crisis that they acted properly. Now they say their agencies need more money. Meanwhile, no one at their agencies has lost his or her job or suffered even a nickel in lost wages.

I recommend that Rep. Kucinich allow all bank examiners to be released from their legal requirement to not disclose their Agency's business, so that they may be able to give full information to his Subcommittee.

Suzan said...

I second that, Gandalf43!

Also, that no one anywhere in the middle of this mess gets a raise until the economy is soaring again (ha, the next bubble awaits!).