Les Leopold: Clinton’s Cash for Caulkers? Not enough Economic Insulation
November 19, 2009 by admin
Filed under Capitol Hill, Money
Bill Clinton and John Doerr, the venture capitalist, are urging the Obama administration to use unspent TARP funds to stimulate jobs and reduce energy wastage by providing cash to homeowners and businesses for weatherization. It’s being sold as a way to counteract our jobless recovery (make that our job-loss recovery). They claim that the two-year $23 billion program will pay for itself in the not-so-long haul because of the obvious energy savings.
To be sure, using TARP money for something other than increasing Wall Street profits and bonuses would be a welcomed change. But it is questionable whether the Cash for Caulkers scheme can stimulate sufficient employment soon enough to help the 30 million who are jobless and the 49 million who are skipping meals.
A more direct approach would be the creation of a national Caulkers Corps, modeled after the New Deal’s Works Progress Administration and its Civilian Conservation Corps. Like those programs, the Caulkers Corps would directly hire the unemployed to weatherize homes and businesses coast to coast.
In addition, it needs more funding. The $23 billion estimated for two years won’t produce nearly enough jobs to break our jobs depression. We need to put at least $50 billion a year directly into the Caulkers Corps. (That’s a million jobs at $50,000 each. The multiplier might add another 500,000 jobs.) Homeowners and businesses could be asked to pay for the cost of supplies so that most of the taxpayers’ money could go into wages and benefits.
Weatherization should be the Democrats’ (and everyone’s!) dream program. In one fell swoop you create jobs, reduce living expenses for homeowners and renters, improve national energy security, enhance business profitability and the competitiveness of exporters, and pluck the lowest-hanging fruit in the effort to confront global warming. And while it requires the up-front investment, it pays for itself through savings in only a few years’ time.
Given our employment collapse, this program needs a massive investment to really do the job. When it comes to bailing out Wall Street we empty Fort Knox. But when we talk saving energy and creating jobs, the Clinton plan offers an investment that will be smaller than Goldman Sachs’ bonus pool. (In fact, a 90 percent windfall profit tax on the bailout-created profits of the 19 largest banks would be the ideal way to promote a robust caulker jobs program.)
If we really want to get the job done, we should graft this program with the bolder one suggested by finance expert Marshall Auerbach. He makes an excellent case that government should become the employer of last resort (ELR) in order to automatically create sufficient jobs when our system fails to produce enough work for those willing and able to work. If we combine Auerbach’s proposed ELR with the Caulkers Corps we get a powerful program that both weatherizes all homes and business over the next decade, and ensures that Americans are back at work.
Opponents instead will say that we must get the government out of the way to make room for entrepreneurial initiative. They insist that the natural forces of the economic cycle will soon right our ship. But even those tossing tea into the harbor must notice that the only ships setting sail are those tax-payer supported yachts on Wall Street. If we don’t put our people back to work, we’ll all be headed to more troubled waters. A robustly-funded Cauklers’ Corps could truly make a difference.
Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.
Read more: Tarp, Energy, Goldman Sachs, Bill Clinton, Unemployment, Bailout, Weatherization, Economic Crisis, Financial Crisis, Jobs, Business News
Goldman Sachs, Warren Buffett To Help Small Businesses
November 17, 2009 by admin
Filed under Capitol Hill, Money
NEW YORK — Goldman Sachs Group Inc. said Tuesday it is teaming with billionaire investor Warren Buffett to invest $500 million to provide thousands of small business owners across America with college scholarships and boost their access to capital.
Goldman’s philanthropic effort, called “10,000 Small Businesses,” includes a $200 million contribution to community colleges, universities and other institutions to give grants to small business owners to further their education.
The New York-based bank also will invest $300 million through a combination of lending and charitable support. Goldman said the money will be funneled through community development financial institutions to boost lending and technical assistance available to small businesses in underserved communities.
In addition, Goldman Sachs executives, in partnership with national and local business organizations, will aid small businesses with advice, technical assistance and professional networking opportunities.
The $500 million initiative is dwarfed by the $16.7 billion that Goldman Sachs has set aside for employee compensation in just the first nine months of 2009. Goldman Sachs has donated $1 billion to charity since 1999, according to a spokesman for the company who was quoted in a recent story by The New York Times.
An advisory council co-chaired by Goldman Sachs CEO Lloyd Blankfein will oversee the initiative. Legendary investor and Goldman’s largest shareholder, Warren Buffett, and Harvard Business School Professor Michael Porter will serve as co-chairs as well.
“Our recovery is dependent on hard working small business owners across America who will create the jobs that America needs,” Buffett said in a statement. “Im proud to be a part of this innovative program which provides greater access to know-how and capital — two ingredients critical to success.”
The initiative comes as Goldman has started to see a rebound across many of its businesses even as the broader economy and consumers continue to struggle with rising unemployment and mounting loan losses. The bank, which has outperformed other financial companies for years, has been the strongest in its industry throughout the financial crisis. It had less exposure to toxic mortgage-backed securities than other companies and also has been more aggressive in its trading.
Its continued strength throughout the downturn allowed Goldman to quickly repay the $10 billion government bailout it received at the height of the credit crisis. That repayment was also done, in part, to rid the bank of restrictions on annual compensation that were attached to the loan. Goldman has been criticized for setting aside billions for employee paychecks despite the continuing weak economy.
10,000 Small Businesses, which has been in development for nearly a year, is a five-year program modeled on the Goldman Sachs 10,000 Women initiative, which creates partnerships between academic institutions and non-profits to provide business and management education to women around the world.
Other Council members include George Boggs, president and CEO of the American Association of Community Colleges, Glenn Hubbard, dean of Columbia Business School and Marc H. Morial, president and CEO of the National Urban League, among others.
The first community college to participate will be LaGuardia Community College in New York City’s Queens borough, which houses a Small Business Development Center. The first community development financial institution to receive financing from Goldman Sachs will be New York-based Seedco Financial Services Inc.
Read more: Goldman Sachs, Bailout, Warren Buffet, New York City, Economy, Banks, Financial Crisis, Lloyd Blankfein, Berkshire Hathaway, Wall Street, Home News
Geithner Singled Out In TARP Watchdog’s Scathing Report On AIG Bailout
November 16, 2009 by admin
Filed under Capitol Hill, Money
A brutal report issued Monday by a government watchdog holds Timothy Geithner — then the head of the Federal Reserve Bank of New York and now the nation’s Treasury Secretary — responsible for overpayments that put billions of extra tax dollars in the coffers of major Wall Street firms, most notably Goldman Sachs.
The authoritative new narrative describes how, while bailing out insurance giant AIG last fall, a team led by Geithner failed nearly every step of the way.
Instead of bargaining with AIG’s numerous counterparties to resolve its billions of dollars in souring derivatives contracts, Geithner’s team ended up paying top dollar for toxic assets — “an amount far above their market value at the time,” the report notes.
“There is no question that the effect of FRBNY’s decisions — indeed, the very design of the federal assistance to AIG — was that tens of billions of dollars of Government money was funneled inexorably and directly to AIG’s counterparties,” the Office of the Special Inspector General for the Troubled Asset Relief Program said.
Wall Street firms like Goldman Sachs, Merrill Lynch and Wachovia got full value for their derivatives contracts with AIG, and taxpayers got the bill. In total, $27.1 billion of public money was transferred to companies that did business with AIG.
Throughout the bailout of AIG, the report says, the New York Fed failed to develop appropriate contingency plans; failed to properly assess the impact of its decisions; and generally engaged in negotiation strategies that were doomed to fail.
Then, after Geithner’s team paid off AIG’s counterparties on Wall Street, it imposed “onerous” terms on the troubled insurer, the report says.
“[T]he decision to acquire a controlling interest in one of the world’s most complex and most troubled corporations was done with almost no independent consideration of the terms of the transaction or the impact that those terms might have on the future of AIG,” the report finds.
Geithner, now the nation’s chief financial officer, just didn’t bargain hard enough with Wall Street’s biggest companies, the report concludes:
[T]he refusal of FRBNY and the Federal Reserve to use their considerable leverage as the primary regulators for several of the counterparties, including the emphasis that their participation in the negotiations was purely “voluntary,” made the possibility of obtaining concessions from those counterparties extremely remote. While there can be no doubt that a regulators’ inherent leverage over a regulated entity must be used appropriately, and could in certain circumstances be abused, in other instances in this financial crisis regulators (including the Federal Reserve) have used overtly coercive language to convince financial institutions to take or forego certain actions. As SIGTARP reported in its audit of the initial Capital Purchase Program investments, for example, Treasury and the Federal Reserve were fully prepared to use their leverage as regulators to compel the nine largest financial institutions (including some of AIG’s counterparties) to accept $125 billion of TARP funding and to pressure Bank of America to conclude its merger with Merrill Lynch. Similarly, it has been widely reported that the Government, while arguably acting on behalf of General Motors and Chrysler, took an active role in negotiating substantial concessions from the creditors of those companies.
Meanwhile, the Fed was attempting to keep the details of AIG’s counterparties hidden from public view — another big mistake, according to the report:
The now familiar argument from Government officials about the dire consequences of basic transparency, as advocated by the Federal Reserve…once again simply does not withstand scrutiny. Federal Reserve officials initially refused to disclose the identities of the counterparties or the details of the payments, warning that disclosure of the names would undermine AIG’s stability, the privacy and business interests of the counterparties, and the stability of the markets.
After public and Congressional pressure, AIG disclosed the identities. Notwithstanding the Federal Reserve’s warnings, the sky did not fall; there is no indication that AIG’s disclosure undermined the stability of AIG or the market or damaged legitimate interests of the counterparties. The lesson that should be learned — one that has been made apparent time after time in the Government’s response to the financial crisis — is that the default position, whenever Government funds are deployed in a crisis to support markets or institutions, should be that the public is entitled to know what is being done with Government funds.
While SIGTARP acknowledges that there might be circumstances in which the public’s right to know what its Government is doing should be circumscribed, those instances should be very few and very far between.
READ the full report:
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Huffington Post Business Editor Ryan McCarthy also contributed to this report.
Read more: Bank of America, Merrill Lynch, Goldman Sachs, Aig, Bailout, Wells Fargo, Troubled Asset Relief Program, Tim Geithner, Neil Barofsky, Federal Reserve, American International Group, Federal Reserve Bank of New York, Sigtarp, Wachovia, Tarp, Business News
Geithner Singled Out In TARP Watchdog’s Scathing Report On AIG Bailout
November 16, 2009 by admin
Filed under Capitol Hill, Money
A brutal report issued Monday by a government watchdog holds Timothy Geithner — then the head of the Federal Reserve Bank of New York and now the nation’s Treasury Secretary — responsible for overpayments that put billions of extra tax dollars in the coffers of major Wall Street firms, most notably Goldman Sachs.
The authoritative new narrative describes how, while bailing out insurance giant AIG last fall, a team led by Geithner failed nearly every step of the way.
Instead of bargaining with AIG’s numerous counterparties to resolve its billions of dollars in souring derivatives contracts, Geithner’s team ended up paying top dollar for toxic assets — “an amount far above their market value at the time,” the report notes.
“There is no question that the effect of FRBNY’s decisions — indeed, the very design of the federal assistance to AIG — was that tens of billions of dollars of Government money was funneled inexorably and directly to AIG’s counterparties,” the Office of the Special Inspector General for the Troubled Asset Relief Program said.
Wall Street firms like Goldman Sachs, Merrill Lynch and Wachovia got full value for their derivatives contracts with AIG, and taxpayers got the bill. In total, $27.1 billion of public money was transferred to companies that did business with AIG.
Throughout the bailout of AIG, the report says, the New York Fed failed to develop appropriate contingency plans; failed to properly assess the impact of its decisions; and generally engaged in negotiation strategies that were doomed to fail.
Then, after Geithner’s team paid off AIG’s counterparties on Wall Street, it imposed “onerous” terms on the troubled insurer, the report says.
“[T]he decision to acquire a controlling interest in one of the world’s most complex and most troubled corporations was done with almost no independent consideration of the terms of the transaction or the impact that those terms might have on the future of AIG,” the report finds.
Geithner, now the nation’s chief financial officer, just didn’t bargain hard enough with Wall Street’s biggest companies, the report concludes:
[T]he refusal of FRBNY and the Federal Reserve to use their considerable leverage as the primary regulators for several of the counterparties, including the emphasis that their participation in the negotiations was purely “voluntary,” made the possibility of obtaining concessions from those counterparties extremely remote. While there can be no doubt that a regulators’ inherent leverage over a regulated entity must be used appropriately, and could in certain circumstances be abused, in other instances in this financial crisis regulators (including the Federal Reserve) have used overtly coercive language to convince financial institutions to take or forego certain actions. As SIGTARP reported in its audit of the initial Capital Purchase Program investments, for example, Treasury and the Federal Reserve were fully prepared to use their leverage as regulators to compel the nine largest financial institutions (including some of AIG’s counterparties) to accept $125 billion of TARP funding and to pressure Bank of America to conclude its merger with Merrill Lynch. Similarly, it has been widely reported that the Government, while arguably acting on behalf of General Motors and Chrysler, took an active role in negotiating substantial concessions from the creditors of those companies.
Meanwhile, the Fed was attempting to keep the details of AIG’s counterparties hidden from public view — another big mistake, according to the report:
The now familiar argument from Government officials about the dire consequences of basic transparency, as advocated by the Federal Reserve…once again simply does not withstand scrutiny. Federal Reserve officials initially refused to disclose the identities of the counterparties or the details of the payments, warning that disclosure of the names would undermine AIG’s stability, the privacy and business interests of the counterparties, and the stability of the markets.
After public and Congressional pressure, AIG disclosed the identities. Notwithstanding the Federal Reserve’s warnings, the sky did not fall; there is no indication that AIG’s disclosure undermined the stability of AIG or the market or damaged legitimate interests of the counterparties. The lesson that should be learned — one that has been made apparent time after time in the Government’s response to the financial crisis — is that the default position, whenever Government funds are deployed in a crisis to support markets or institutions, should be that the public is entitled to know what is being done with Government funds.
While SIGTARP acknowledges that there might be circumstances in which the public’s right to know what its Government is doing should be circumscribed, those instances should be very few and very far between.
READ the full report:
Get HuffPost Business On Facebook and Twitter!
Huffington Post Business Editor Ryan McCarthy also contributed to this report.
Read more: Bank of America, Merrill Lynch, Goldman Sachs, Aig, Bailout, Wells Fargo, Troubled Asset Relief Program, Tim Geithner, Neil Barofsky, Federal Reserve, American International Group, Federal Reserve Bank of New York, Sigtarp, Wachovia, Tarp, Business News
AP Source: GM to begin repaying aid by year-end
November 15, 2009 by admin
Filed under Capitol Hill, Money
WASHINGTON — General Motors Co. will begin paying back $6.7 billion in U.S. government loans by the end of 2009 and could pay off that full amount by 2011, four years ahead of schedule, according to a person familiar with the matter.
The government debt represents about 13 percent of the $52 billion that U.S. taxpayers have invested in General Motors, the majority of which was exchanged for a 61 percent ownership stake in the company.
Read more: Saturn, Gm, Ford, Cars, General Motors, Ed Whitacre, Bailout, General Motors Co., Washington, Fiat, Detroit, Car Makers, Jeep, Auto Bailout, Politics News
Rep. Paul Kanjorski: The End of ‘Too Big to Fail’
November 14, 2009 by admin
Filed under Capitol Hill, Money
“Too big to fail” must die. I am preparing legislation to empower federal regulators to rein in and dismantle financial firms that are so large, inter-connected, or risky that their collapse would put at risk the entire American economic system, even if those firms currently appear to be well-capitalized and healthy. Never again should American taxpayers have to bail out high-flying financiers when their risky bets go sour.
The economic meltdown we narrowly averted last year rightfully convinced the American people that we need to re-examine the fundamental structure of our financial system. Wall Street financiers, however, seem to think that — now that they are basically stable thanks to American tax dollars that kept them afloat during the worst of the crisis — they can just go back to business as usual. I have news for Wall Street: The world shifted, and it will never return to the way it was before mid-September, 2008.
Our only two living former chairmen of the Federal Reserve Board — Paul Volcker and Alan Greenspan — have both indicated they support making sure that our nation’s largest financial institutions become smaller so that none would be too big to fail. Even John Reed, who helped engineer the merger that created Citigroup, now recognizes it was a mistake to create such a huge institution. “I would compartmentalize the industry for the same reason you compartmentalize ships,” he recently told a Bloomberg reporter. “If you have a leak, the leak doesn’t spread and sink the whole vessel.”
Capitalism is the most vibrant, flexible, and efficient economic system mankind has yet devised, and it is essential that we limit governmental interference in the distribution of capital as much as possible. At the same time, however, we must forever bear in mind that the purpose of any economic system is to serve the needs of people through the efficient distribution of goods and services. In addition to being inherently risky to systemic collapse, unfettered capitalism can lead to the extreme concentration of resources in the hands of the wealthy few, which can ultimately lead to political instability. Look to the example of the French Revolution to understand how the hungry masses will destroy the institutions of civilization to survive.
I am not suggesting that the American people are anywhere close to a violent revolt, but they have an intuitive queasiness about having a very small number of very huge financial institutions control an enormous amount of this nation’s capital. They are still furious about the trillions of tax dollars spent to prop up financial entities which seemingly do nothing to serve their needs; all they know about organizations like Citigroup is that they are charging them outrageous fees on their credit cards.
Americans are not the only ones who feel burned by giant financial firms relying on tax dollars to remain afloat. Our most important economic partner, the European Union, has begun pressuring its largest financial institutions to divest operations as a condition of receiving additional state aid. Approximately 80% of all securities traded in the world emanate from firms based in the U.S. and the EU; the United States and the European Union working in partnership can still wrest some level of control over multi-national financial behemoths before they become so huge and powerful that they forever escape control of any governmental entity. If we do not set reasonable standards for both sides of the Atlantic, the global economy will forever be at risk of future collapse that no government would have the power to prevent.
President Obama has proposed restricting the activities of our largest financial firms and establishing rules for the orderly dissolution of those entities should they begin to fail. I believe we need to go further by preventing institutions from becoming systemically risky in the first place. As we restructure our regulatory framework, I hope that we can find agreement on this goal and focus on the mechanism by which we reach it.
Congressman Paul E. Kanjorski serves as the Chairman of the U.S. House of Representatives Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. He represents the 11th Congressional District of Pennsylvania.
Read more: Tarp, Wall Street Bailout, Bailout, Paul Kanjorski, Wall Street, Financial Reform, Too Big to Fail, Financial Crisis, Financial Regulation, Business News
Wall Street Bonuses At Big Three Banks May Be Up 60% From Last Year
November 10, 2009 by admin
Filed under Capitol Hill, Money
Nov. 9 (Bloomberg) — Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.’s investment bank, survivors of the worst financial crisis since the Great Depression, are set to pay record bonuses this year.
The firms — the three biggest banks to exit the Troubled Asset Relief Program — will hand out $29.7 billion in bonuses, according to analysts’ estimates. That’s up 60 percent from last year and more than the previous high of $26.8 billion in 2007. The money, split among 119,000 employees, equals $250,400 each, almost five times the $50,303 median household income in the U.S. last year, data compiled by Bloomberg show.
Read more: JPMorgan Chase, Goldman Sachs, CEO Pay, Morgan Stanley, Bailout, Financial Reform, Banks, Big Three Banks, Bank Bonuses, Wall Street Pay, Wall Street Bonuses, Business News
Charles Gasparino: Goldman Sachs Doing "God’s Work"?
November 9, 2009 by admin
Filed under Capitol Hill, Money
The only thing worse than Goldman Sachs amassing close to $20 billion
in bonus money for its executives based on various government
subsidies and bailout measures is listening to senior executives there
trying to explain it all away. The spin job has been coming from an
unlikely source: The normally media shy Goldman CEO Lloyd Blankfein
has been making the rounds lately, talking to selective reporters,
including William Cohan, who recently wrote a book about the fall of
Bear Stearns and now has the firm’s complete cooperation as to write
something on Goldman Sachs, the most prestigious of the Wall Street
firms, even if it needed a bailout to survive last year’s financial
crisis..
Cohan’s Bear book, the first of many financial crisis tomes (including
my own) wasn’t exactly a puff piece, but trading access for
information is a time honored journalistic practice, and it’s human
nature to be nicer to someone who gives you information. So presumably
we’ll all find out from Cohan how, in the throes of the financial
crisis, Goldman really didn’t need the $10 billion in bailout money it received
from the federal government as its stock cratered; that it was forced
to take the cash from then-Treasury Secretary (and former Goldman CEO)
Hank Paulson, or how despite its exposure to troubled insurance giant
AIG, Goldman was miraculously “hedged,” against losses, meaning that
the fed’s AIG’s bailout last year didn’t really help Goldman survive
last year’s panic. No, Goldman survived because it was built for
survival.
Forget the absurdity of such claims, Blankfein has been on a roll of
late, repeating them time and again, not just presumably to Cohan, but
to a growing number of credulous journalists who will stomach just
about anything to get a few minutes with the CEO of the Great Goldman
Sachs, even if its greatness was put to the test last year.
Blankfein’s spinning is reaching epic proportions. Several recent
stories about Goldman have cast the firm as the Great Satan of the
securities markets, or as Rolling Stone’s Matt Taibbi put it, the “great vampire
squid wrapped around the face of humanity, relentlessly jamming its
blood funnel into anything that smells like money.” No longer is
Blankfein simply trying tell the world Goldman isn’t the root of all
evil; rather, old Lloyd is informing us all that Goldman is a source of
goodness in the world. The exact quote, from the Times of London has
Blankfein professing that as CEO of the vampire squid he’s actually
“doing God’s work,” simply by doing what banks get paid to do: Raising
money for clients and investing in businesses.
Oh really, Lloyd? My brother is a doctor who works in the intensive care
unit of an inner city hospital; he could have a cushy lucrative
practice here in New York, but he likes helping people, and yet he has
never once told me he’s doing God’s work even after he explained one
afternoon how he had just saved a homeless man’s life by massaging his
heart.
Believe it or not, I happen not to fall into the camp of Goldman
haters, where people believe the firm is behind every scandal and
conspiracy and may have even created the swine flu virus so it could
corner the market for drug stocks. (Though Goldman and several other
firms did seem to have no problem obtaining for their employees the
swine-flu vaccine, which is in short supply.) Indeed, as I show in my
new book The Sellout, when it came to risk-taking over the last 30
years on Wall Street, Goldman did it better than any other firm on the
Street. The folly that was found at a firm like Bear Stearns, with its
CEO caring more about playing bridge and golf (and allegedly smoking
marijuana) than tending to the firm’s balance sheet, would never
happen at Goldman Sachs.
But there is something truly unsettling about the new message coming
from the firm, honed I hear from a phalanx of image consultants who
are literally trying to re-write history as the firm gets ready to
dole out its enormous bonus pool. And that’s what all this spinning is
about. For the record Goldman Sachs didn’t take down the financial
system last year — Citigroup, Merrill, Lehman or Bear are much more
responsible for that. And for the record every firm spins — its called
public relations, and Goldman will need all the PR it can muster as it
decides in the coming weeks how much of the $20 billion it will hand
out to its executives. My sources at Goldman say Blankfein won’t be
stingy because he needs to prevent top producers from bolting to hedge
funds and private equity.
What makes Goldman so contemptible is that its level of spin has
almost no basis in reality. We are supposed to believe Goldman wasn’t
bailed out; it didn’t need the government’s money when big investors
where yanking funds from the firm and its stock was plummeting and now
the firm is doing “God’s work,” even as government bureaucrats
continue to subsidize how the firm makes most of its money — through
risk taking and bond trading, all on the backs of the US taxpayer.
Goldman, in case you haven’t heard, has been classified as a
commercial bank, meaning it can borrow cheaply to finance its risk
taking, and can borrow from the Federal Reserve in a pinch. That’s why
it’s amassing such massive profits. And yet not a penny of its massive
bonus pool will be lent out to funding-starved small businesses. Think
about that: The Federal Government run by the most Liberal
Administration in years, is subsidizing big business at the expense to
small business.
How did this bizarre scenario develop? Who knows, but it should come
as no surprise that Wall Street — Goldman in particular — funneled far
more money to president Obama than it did to his Republican
challenger, John McCain. Maybe that’s why the president has been
eerily silent on the Goldman Sachs subsidy, even as Lloyd Blankfein
tells the world he’s doing “God’s work.”
Read more: Tarp, Lloyd Blankfein, Goldman Sachs, Wall Street Bailout, Bailout, Goldman Sachs Bonuses, Goldman Sachs Bailout, Blankfein, Banks, Bear Stearns, Goldman Sachs TARP, Goldman Sachs Profits, Goldman, Business News
Goldman Sachs CEO Lloyd Blankfein: "I’m Doing God’s Work."
November 7, 2009 by admin
Filed under Capitol Hill, Money
Goldman’s reputation is suddenly as toxic as the credit default swaps and other inexplicably exotic financial instruments it used to buy with glee. That’s bad for the one thing it values more than anything else: business. Being the prime target for popular and political outrage could put Goldman first in line for draconian new regulation. So it has, reluctantly, decided that the time has come to speak out, to fight its corner. That’s how, on one of those bright autumnal New York mornings when anything seems possible — even an invitation to break bread with the masters of the universe — I find myself walking past the security guard who held up Michael Moore and into the building with no name.
Read more: Timothy Geithner, Goldman Sachs, Economy, Derivatives, Bailouts, Black Pools, Regulation, Credit Default Swaps, George Bush, Lloyd Blankfein, Policy, Goldman, London, Tim Geithner, Recession, Mortgage Crisis, Ben Bernanke, Henry Paulson, The City, Bailout, Barack Obama, Predatory Lending, Blankfein, Banks, Hank Paulson, Bonuses, Wall Street, Executive Pay, Business News
Elizabeth Warren: We Rescued The Top Of The System, Left The Bottom To Fend For Itself (VIDEO)
November 6, 2009 by admin
Filed under Capitol Hill, Money
Elizabeth Warren, the chair of the Congressional Oversight Panel charged with monitoring the bank bailout, was on Morning Joe Friday morning to dig in to the newly released unemployment report. The numbers are bleak — unemployment has surpassed 10 percent for the first time since 1983 — and Warren is not surprised.
“Let’s face it,” Warren said, “This is sort of how we went about the rescue — we rescued at the top and we left the bottom to kind of fend for itself — and that’s showing up in the unemployment numbers.”
Warren went on to explain that the report is really about the guarantees the Government made to protect banks’ assets while leaving the public out to dry.
“Look, it saved the top of the system,” Warren acknowledged. “It helped stabilize it, but not so much for families who are hard hit down on the ground, the real economy.” There’s always the question, Warren explains, about how you save the top — in this case, the public pays for the banks’ guarantees and the top executives benefit. “We said, in effect, at the top, there’s really not any pain in return for taxpayer support. Not so much so when it comes to folks at the bottom. We said wait a year, we’ll get there, we’ll do what we can.”
Morning Joe host Joe Scarborough suggested that it was the old “socialize the profits, privatize the gains” scenario, but Warren took it one step further.
“The way I think of it is: they say something like ‘Give me your money, investors and I’m going to Las Vegas and put it all on red 22. And if red 22 comes in — woo! we are RICH. If red 22 doesn’t come in, don’t worry because the tax payers will pay you back the money you invested.”
Watch it here:
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Read more: Unemployment Numbers, Elizabeth Warren TARP, Elizabeth Warren, Unemployment, Bailout, Unemployment Rate, Economic Crisis, Financial Crisis, Banks, Elizabeth Warren Video, Elizabeth Warren Unemployment Numbers, Business News
