Obama’s Wall Street plan creates ‘permanent bailout’

[jgraz]

Taibbi: Obama’s sellout to Wall Street creates ‘permanent bailout’

If passed as it is, the financial reform bill winding its way through Congress will create a "permanent bailout mechanism," and will give complete control over future bailouts to the White House, says columnist Matt Taibbi.

In a video preview of an upcoming Rolling Stone article, Taibbi explained how the Obama administration started selling out to Wall Street interests almost as soon as the 2008 election was over.

"The really big thing that's in these bills that's really, really scary is that it kind of outlines a permanent bailout mechanism," Taibbi said. "If it survives in the way that it was originally conceived, it's basically going to formalize an arrangement whereby the government is expected to bail out the top 20 to 25 largest financial companies. ... It will be entirely up to the White House to determine whether or not these companies are in trouble in the future, so there won't be any congressional role in deciding when and when not to give a bailout."

Taibbi's words echoed the concerns of some in Congress that, far from ensuring that America's financial system will be healthy, the financial reform being proposed will make Wall Street more dependent on taxpayers than it is already.

Video at link: http://rawstory.com/2009/12/taibbi-obamas-big-sellout

[gateley]

1. Although Taibbi isn't a financial 'expert', he makes some good points and seems

to have been following this trail closely. Recommend (to counter the un-rec :eyes:)

[jgraz]

2. This is something we all need to follow closely

or we'll end up supporting these bankster parasites until the end of time

[gateley]

23. Agree -- we've been doing supporting these bankster parasites for at least

80 years. So many of us have no idea of the extent we've been manipulated and molded so are unaware that it's getting worse. This time we've got some really good voices trying to put the stops in (Bernie comes to mind), and with the help of those like Ed, Rachel, Keith, the word will get out there. I hope.

[phleshdef]

3. Taibbi is spouting off Republican talking points that are based on conservative "slippery slope" BS

This bullshit has no place here.

[ClarkUSA]

6. Taibbi is a mediawhore who loves to create anti-Obama controversy. He has many devotees here.

His bullshit is always quoted here hot off the presses (by the usual suspects, of course).

[jgraz]

10. Maybe I should have just stolen his article and passed it off as my own.

Hmm?

[ClarkUSA]

13. I wouldn't put it past you. But since you sound so much like him already, who could tell?

:shrug:

[jgraz]

15. you would know. after all

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=433&topic_id=20952&mesg_id=23291

[ClarkUSA]

19. lol! Is that all you've got? False attacks from a known Obama supporter Hater?

:)

[jgraz]

21. False? Did you post the paragraph or not?

Simple question. Yes or no.

[ClarkUSA]

29. Oy vay. You need some help.

:crazy:

[jgraz]

43. Still haven't got an answer

Really, is it that difficult to admit you were wrong?

[ClarkUSA]

46. Respond to Reply #35 with more than just simplistic attack rhetoric for once.

I doubt you can.

[jgraz]

49. Answer my question and I'll consider it.

[ClarkUSA]

51. lol! I knew you'd avoid answering that reply to this crap OP. All you've got is attack rhetoric.

:rofl:

[jgraz]

54. I decided to reply anyway, given that you'll never accept any responsibility whatsoever.

[gateley]

17. Taibbi is always going for the snark, but he does bring some valid points and

observations to issues. I try to remind myself to look THROUGH the person and listen to the info they're delivering. Most of the time, regardless of who, some of it's right on, some of it's way off.

[ClarkUSA]

20. Such as?

Name "some valid points" of his.

[gateley]

28. Why? What I consider valid you may not. And, I was just expressing my

opinion, not looking to get into a debate about Taibbi. God, why do I even bother?

[ClarkUSA]

31. Um, I asked you politely for some examples of what you called Taibbi's "valid points".

You have none to offer. Don't get all up my ass because all you have is your "opinion" minus any proof, okay?

:eyes:

[gateley]

32. Okay. nt

[brentspeak]

41. Is Dean Baker a Republican?

http://www.guardian.co.uk/commentisfree/cifamerica/2009/nov/30/us-housing-economy-mortgages

[SpartanDem]

4. Yeah this sounds like a bailout to me

The House Financial Services Committee today passed the last leg of a comprehensive reform package to ensure that massive financial firms never again threaten a system-wide crisis — or require taxpayers to bail out “Wall Street’s reckless actions,” as the congressional panel put it.

The bill empowers an inter-agency oversight council to identify and more strictly regulate financial firms posing a systemic risk to the system — powers that federal authorities did not have when faced with the collapse of American International Group Inc. (AIG) or Lehman Brothers in 2008.


It also gives federal regulators sweeping powers to force companies deemed too large and interconnected to downsize, even if the firm is well capitalized. The costs of shutting down a failing financial company will be borne by shareholders and creditors, rather than taxpayers, as in the case of AIG. The largest groups — companies with assets of more than $50 billion and hedge funds with assets of more than $10 billion — will be required to pre-fund a “dissolution fund” to cover any shortfall.

http://features.csmonitor.com/politics/2009/12/02/financial-bill-to-rein-in-wall-street-will-it-be-tough-enough/

[phleshdef]

5. Ouch, that was a pretty swift annhilation of this thread. That probably deserves its own post.

[SpartanDem]

9. God know it's not pefercet

no legislation ever is, but when you're spewing the same BS as the right wing that is a big fucking red flag

Permanent Bailout Authority’?
Rep. Barney Frank (D-MA) is expected to reveal legislation (possibly today) creating a “resolution authority,” which would enable the government to negotiate an orderly unwinding of large, complex financial firms like AIG, Citigroup, or Lehman Brothers.

The banking industry has already begun to criticize the proposal and Republicans have taken to characterizing it as enshrining taxpayer-funded “bailouts.” Last night, Rep. Spencer Bachus (R-AL), the ranking member on the House Financial Services Committee, and CNBC’s Larry Kudlow went so far as to call resolution authority “TARP in perpetuity,” and “permanent bailout authority“:


http://wonkroom.thinkprogress.org/2009/10/27/res-authority-permanent/

[jgraz]

14. Except the bill that passed is not Obama's plan

It's Barney Frank's plan. It's still pathetically weak, but it's much better than Obama's.

[ClarkUSA]

8. Sorry, but FACTS do not compute to the anti-Obama crowd. I appreciate them, however.

You should make this a separate OP, just to counteract the lying liars' anti-Obama lies. :thumbsup:

[jgraz]

12. Explain the difference between this bill and Obama's plan

You did know they were different, right?

Edit: do your own work this time.

[ClarkUSA]

16. lol! You're confusing me with someone who cares what you say.

:eyes:

[jgraz]

18. But I'm not confusing you with someone who knows what they're talking about

I don't think anybody could do that.

[ClarkUSA]

22. Sticks and stones... but as predicted, you have no response to Reply #4 by SpartanDem.

:)

[jgraz]

25. You mean other than post 11?

:shrug:

[ClarkUSA]

30. No, I mean Reply #26.

:)

[jgraz]

36. Wait... in post 22 you were referring to a post that hadn't been written yet?

Damn, you're good.

[ClarkUSA]

38. No, I hadn't read your meaningless soundbite response to SpartanDem's original reply yet.

:)

[brentspeak]

40. Or maybe he's confusing you with someone capable of understanding what was written

[ClarkUSA]

44. Speaking of someone who's confused, how's Johnny "Hedge Fund" Edwards these days?

Has he figured out who's the father of Reille's kid yet?

[jgraz]

45. Pathetic.

But at least you wrote it yourself. I consider that good progress for you.

[ClarkUSA]

48. Yeah, Edwards is pathetic.

:P

[jgraz]

11. Is that Obama's plan or the House Financial Services Committee plan?

And do you even know the difference?

[SpartanDem]

26. What's the difference?

what passed the House mirrored what Obama proposed over the summer in terms allowing the government break up large non bank companies.

However, in stressed conditions it may prove difficult for distressed institutions to raise
sufficient private capital. Thus, if a large, interconnected bank holding company or other
nonbank financial firm nears failure during a financial crisis, there are only two untenable
options: obtain emergency funding from the US government as in the case of AIG, or
file for bankruptcy as in the case of Lehman Brothers. Neither of these options is
acceptable for managing the resolution of the firm efficiently and effectively in a manner
that limits the systemic risk with the least cost to the taxpayer.
We propose a new authority, modeled on the existing authority of the FDIC, that should
allow the government to address the potential failure of a bank holding company or other
nonbank financial firm when the stability of the financial system is at risk.

The federal government’s responses to the impending bankruptcy of Bear Stearns,
Lehman Brothers, and AIG were complicated by the lack of a statutory framework for
avoiding the disorderly failure of nonbank financial firms, including affiliates of banks or
other insured depository institutions. In the absence of such a framework, the
government’s only avenue to avoid the disorderly failures of Bear Stearns and AIG was
the use of the Federal Reserve’s lending authority. And this mechanism was insufficient
to prevent the bankruptcy of Lehman Brothers, an event which served to demonstrate
how disruptive the disorderly failure of a nonbank financial firm can be to the financial
system and the economy



http://www.financialstability.gov/docs/regs/FinalReport_web.pdf

[jgraz]

34. Yeah, that's a good question. The final bill looks almost as pathetically weak as Obama's

5% holdback on securitized loans = disaster

No provision to break up '"Too Big To Fail" nonbank companies BEFORE they fail = more disaster

No provision to break up '"Too Big To Fail" banks AT ALL = catastrophic disaster



And still it won't pass the Senate. :banghead:

[SpartanDem]

55. No provision to break up '"Too Big To Fail" nonbank companies BEFORE they fail

That isnt what I read the other day

But the committee's bill goes beyond the powers requested by the Obama administration. It grants regulators additional power to preemptively break up large financial institutions that pose a "grave threat to the financial stability or economy of the United States."

http://www.latimes.com/business/la-fi-financial-regs3-2009dec03,0,3243547.story

[jgraz]

57. Yes, they can only be broken up if the pose a "grave threat'

In other words, if they're already failing. The government is given ZERO authority to break up companies that are currently solvent. However, the President (and ONLY the President) is given authority to decide how to bail out failing companies. THAT's the permanent bailout that Taibbi refers to.

[ProSense]

33. "And do you even know the difference?" This from someone who obviously isn't

aware of administration's proposals.

[jgraz]

37. Uh huh. Care to tell me the required percentage holdback on securitized loans?

You can pick either Obama's proposal or the House's. (Hint: I already posted it in this thread)

[ProSense]

39. What the hell does that have to do with anything?

The administration's proposals to Congress are guidelines. The bill signed into law is passed in Congress. Your OP title is ludicrous.

[jgraz]

42. I'm going to die of not surprise

THE most important aspect of the financial reform plan and you have no clue what it means. The very model of a modern mindless follower.

[ProSense]

47. "The very model of a modern mindless follower."

You think this and your endless bullshit spin can change the reality that Congress is working on the bill that will become law?

[jgraz]

50. I hope something can change it

The current bill is a disaster and the sycophants are just cheering it on.

[ProSense]

52. "the sycophants are just cheering it on" Yeah, unlike you

and your "whatever it is, I'm against it" posture. Run for office.

[jgraz]

56. Until you have the first clue about the finance bill, you should probably avoid casting asparagus

I've demonstrated time and again that I've read the proposals and researched their implications. You failed to recognize the central, most contentious item in the White House's proposal. I guess as long as President McDreamy proposes it, it's ok by you.

[ProSense]

58. "I guess as long as President McDreamy proposes it, it's ok by you."

On top of your Mitch McConnell impression, you obviously have issues.

[jgraz]

59. Another empty response

Sound and fury, signifying nothing. Your specialty.

[ClarkUSA]

60. Oh, the irony.

:rofl:

[jgraz]

61. Don't use big words you don't understand.

Hell, don't use little words you don't understand.

[ClarkUSA]

62. Oh, I understand dramatic irony quite well. Do you?

Obviously not.

[jefferson_dem]

24. The OP would like a "do over" please.

n/t

[jgraz]

27. The OP would like you to understand the difference

between Obama's plan and the one just passed by the House Financial Services Committee.

Try Google. I'll be here to answer any questions you might have.

[SIMPLYB1980]

7. LOL!

:popcorn:

[mkultra]

35. reading beyond Taibbi's republican quotes reveals his bullshit

the republicans he quotes are working on volker's assertion that the new ability to designate a firm as to large to fail somehow "implys" that they will receive bailout money. The bill doesn't provide for that or even allude to it. Essentially, this is another hit piece as the designation allows the WH to split up firms that are to big and specifically states that the burden will be on the shareholders.


Before you claim two bills, i recommend you locate the bill numbers as there is only one bill.

[jgraz]

53. The government does NOT have the power to split up too-big-to-fail companies

The president might be given the power to split up non-bank companies after those companies are failing. Can you see the critical differences there?

Taibbi specifically draws a distinction between the Obama/Geithner proposal and the bill making its way through Congress. You never even watched the interview, did you?

[mkultra]

63. no, i didnt waste my time

and no, the differences are not critical. I WANT them to be able to split up companies that are too big to fail. It is conceivable that a large company could be integral to our economy yet non-bank. AIG is a good example. If they had the power to break up AIG before the meltdown, it probably wouldn't have been so sever.

[girl gone mad]

64. They did have the power.

They just didn't use it.

William K. Black, the senior regulator during the S&L crisis, and an Associate Professor of Economics and Law at the University of Missouri - says that the Prompt Corrective Action Law (PCA) - 12 U.S.C. § 1831o - not only authorizes the government to seize insolvent banks, it mandates it, and that the Bush and Obama administrations broke the law By refusing to close insolvent banks.

There is absolutely no reason to believe that the government will act any differently with yet another law in place.

[jgraz]

65. Bill Black is a national treasure

Which is why he -- along with Paul Krugman, Howard Dean and Robert Reich -- doesn't have a snowball's chance in hell of ever being listened to by this administration.

[LiberalAndProud]

66. I guess the problem was they weren't banks, exactly.

"We propose a new authority, modeled on the existing authority of the FDIC, that should
allow the government to address the potential failure of a bank holding company or other
nonbank financial firm when the stability of the financial system is at risk.

The federal government’s responses to the impending bankruptcy of Bear Stearns,
Lehman Brothers, and AIG were complicated by the lack of a statutory framework for
avoiding the disorderly failure of nonbank financial firms, including affiliates of banks or
other insured depository institutions. "

-- Thanks Spartan Dem --


Fascinating thread, by the way, despite the mudslinging.