“Close them down, get them out of business. If they're dead, they ought to be buried," Sen. Richard Shelby, R-Ala., said Sunday on ABC's "This Week." "We bury the small banks; we've got to bury some big ones and send a strong message to the market. And I believe that people will start investing in banks."
The faltering giant Citibank—the government recently increased its stake in the New York bank to more than 30 percent—has always been "a problem child," Shelby said.
Sen. John McCain, R-Ariz., said administration officials have erred in not dealing more specifically—and harshly—with banks and the lending crisis.
"I don't think they've made the tough decisions. Some of these banks have to fail," McCain said on "Fox News Sunday."
Meanwhile, the Administration, via budget director, Peter Orszag, suggested that patience in order, suggesting that the current crisis should be laid squarely on the shoulders of the Bush Administration, and that any remedy will take time.
TARP did originate during the final months of the Bush administration, that said, the institution that created the original “crisis” was Fannie Mae and Freddie Mac, lenders that were deeply connected, in both lack of oversight and politically to the Democrat Party since its creation under Franklin D. Roosevelt in 1938. additionally, when these two mortgage giants faltered, it affected the entire industry, and the housing bubble burst. Back in July of 2008, when it was discovered those two partially government run agencies were in trouble, “Senate Majority Leader Harry Reid, D-Nev., said "Senate Democrats stand ready to work with the administration to quickly and effectively address the situation currently facing these institution."
Democratic presidential contender Barack Obama, speaking with reporters before the plan was announced, said he favored congressional action to shore up the housing market, as well as legislative consultation about any taxpayer dollars used to support the mortgage companies.”
It would make perfect sense to the Democrat Party to save an institution created by one of their most valued historical figures, Franklin D. Roosevelt. What did not make sense was that; as this problem did not occur overnight, those who were asking for oversight (John McCain, for one), were brushed aside by the Democrat Controlled Congress and Senate, and did nothing further to follow up (shame on them). The scenario was on in which the fox was guarding the henhouse and the watchdogs lost their bark.
By November, 2008 calls for release of information on how that TARP money was being spent by those who had received the initial installment, were summarily dismissed by none other than Barney Frank (D-MA) and then New York Fed Chair Timothy Geithner. Both of these financial geniuses believed they were “pretty sure” all was well.
“I talked to Geithner, and he was pretty sure that they’re OK,” Frank told Bloomberg.
We’ll all no doubt sleep easier knowing that our government has loaned $2 trillion to potentially troubled financial institutions and the guardians of our economy are “pretty sure they’re OK.”
Frank added that revealing the collateral would give people clues as to the value of those assets.
In December, when it was found that it was “pretty clear”, there were problems with TARP funds, GAO began to call for oversight.
It was not, therefore, eight years of Bush economic policy, as suggested by Orszag, rather the core root of this problem, is a 70 year old institution conceived and run by past administrations. What can be laid at the feet of the Bush administration was a mistake in attempting to work with a congress and senate from an opposition party during an election year, in what, one can only believe, Bush felt was in the best interest of the nation.
One must understand that the government can lock the henhouse and stop the bleeding of taxpayer dollars by allowing these institutions to simply fail. In a column by George Will over the proposed auto bailouts, Will offered the following:
“But why the corporate welfare for GM, Ford and Chrysler? Ford's assembly plant in Louisville, Ky., is participating in that company's struggles. The Toyota plant in Georgetown, Ky., is flourishing in the other American auto industry: It is located largely in the South, employs 92,000 Americans and is not in the toils of the cost structure Ford and GM negotiated with the United Auto Workers. Lemon socialism – the subsidization of the weak – is supposedly needed lest a U.S. automaker file for bankruptcy, causing the sort of disorder and social chaos that accompanied the disappearance of Studebaker, Packard, American Motors and others.”
Although Will was speaking to the auto industry, the same can be said of any industry in this country, be it a bank, or retail outlet; historically, where one fails, another takes it place. As the Obama administration addresses a myriad of issues, including finding a new Bush to hate (Rush Limbaugh), the rest of the country is not only losing patience, they are no longer amused. It is, at this point, ridiculous to play “Monday Morning Quarterback” and for those of opposing political parties (specifically the one now in charge) to point fingers (in light of an historical trail of evidence to the contrary), rather, it is time to cut the fat from both the pork (Omnibus) and additional bailouts, and focus not on going back to failed economic playbooks, but to pull up some bootstraps, work with Wall Street (see dwindling 401k’s, that affect workers across the economic spectrum), and pump some money into the private sector, through real tax cuts (both corporate and individual), with limited regulation on those industries that are critical to the economic survival of the country.
No comments:
Post a Comment