Could it be that the game is still the same and only the players have switched uniforms?
I’ve written a lot in the past about my concern that President Obama’s economic team was composed of the same people who helped build the corrupt system on Wall St. that collapsed last year, instead of progressive economists who were not part of the “trickle-down country club”. I am only becoming more and more suspicious as we learn more his economic policies.
There are three legs to the Obama “plan” as I understand it: tax money to stabilize the financial institutions, tax money to stimulate the economy to create jobs and increased regulation to safeguard the economy and consumers. Six months into the program, it seems clear that the warnings of progressive economists, such as Nobel Prize winners Krugman and Stiglitz have come true: Wall St. is more powerful and profitable than ever before, and blue collar families are worse off. In other words, the Administration has changed, but the results are the same.
The bailout money has resulted in more powerful and profitable Wall St. firms with less competition (the Goldman-Sachs alumni in the Obama Administration allowed competitors like Bear-Stearns and Lehman Brothers to go bankrupt while Sachs was bailed out). If these Wall St. firms were too big to fail before, then the situation has only gotten worse. Most of the tax payer monies were transferred between the remaining firms and are unaccounted for except for executive bonuses which have continued at the same rates as before the bailouts. For example, AIG used their bailout money to pay out large bonuses and to pay back loans from Goldman-Sachs (who had already been given money for those same loans with their bailout money – they got paid twice!).
Banks used our money to buy other banks instead of bailing out foreclosed homes or lending to small businesses. Tens of billions of dollars went to stabilize foreign banks. Once again, tax payer monies are unaccounted for. Homeowners in foreclosure who couldn’t get their bank to lower their mortgage 2%, were forced to lend the same banks their tax dollars. Meanwhile, the Obama Administration is selling back the tax payer ownership stocks to the banks at a fraction of their true value. Banks got essentially free loans from the same people who they were denying loans and have to pay only a fraction of the money back.
Finally the “regulatory reforms” announced to protect American consumers are being weakened to the point of irrelevance. For example, the law designed to set up an agency to protect consumers from credit card company abuses is being designed as “advisory only” with no enforcement ability. In other words, they can tell a credit card company that raising interest rates or imposing new fees are wrong, but can’t do anything to stop them.
Progressive economists warn that the bailout program would only result in less competition and money disappearing; the stimulus package was too small and so poorly designed that most of the money would not go to create jobs and that the regulations need to be enforceable by an agency in the Fed (i.e. not having the same coworkers enforcing the regulations). They were right, but President Obama is ignoring his own mistakes.
5% of Americans control the 90% of the wealth in America and the same 5% control the government – Republican or Democrat. How do we change this equation?