Robert Reich: The American people will continue to have to foot the bill for the mistakes of Wall Street’s biggest banks because the legislation does nothing to diminish the economic and political power of these giants.
Robert Reich: If Washington knew what was good for it and the nation, it would sever its financial connections with the Street. Better yet, it would enact legislation seeking to limit the impact of private and corporate money in politics. That goal is made more difficult to achieve by the grotesque recent Supreme Court decision (Citizens United vs. Federal Election Commission) holding that corporations, including financial firms, have the right to spend unlimited amounts on political campaigns. But there are ways around this, such as more generous public funding for candidates that choose not to take private contributions. Hopefully as well, the president will nominate Supreme Court justices who understand the importance of public trust in democratic institutions, and the difference between companies and people.
AIG is rapidly becoming a nightmarish metaphor for the Obama Administration’s problems administering the bailout of Wall Street. One central problem is the lack of transparency. According to some news reports, Treasury Secretary Tim Geithner knew weeks ago that AIG was planning to issue the bonuses to executives in its notorious credit default swap unit, [...]
Former Treasury Secretary Hank Paulson said last October that the taxpayers shouldn’t fret about putting $250 billion in the nation’s banks: “This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything.” But a draft report from the Congressional Oversight Panel for the TARP says Paulson [...]
It’s difficult to make the case that the first $350 billion bailout of Wall Street — so-called “TARP I” — fulfilled its goals, unless one argues that the Street would have imploded without it, which is pretty much what Hank Paulson is saying these days. And since it’s impossible to prove a counter-factual, especially when [...]
The core problem we face is not access to capital. The Treasury has already flooded Wall Street and the banking system with money, committing nearly $350 billion; the Federal Reserve Board has exchanged Treasury bills for some $2.2 trillion of troubled assets; other agencies, such as the FDIC, have guaranteed trillions more. But there has [...]
by Robert Reich – The National Association of Realtors said today that home prices have now dropped to the point where they’ve wiped out all the gains in housing prices since 2004. 2004, not incidentally, was when interest rates last hit bottom, and the Feds looked the other way while mortgage bankers began shoving money [...]
The United States is in the midst of the worst financial crisis since the Great Depression. The question is: How close are we to another Great Depression? The answer is: Very close. Here’s why. The Great Depression was the result of the combination of the 1929 financial crisis and serious structural problems in the American [...]
Hank Paulson has just about burned through $300 billion, and it’s not clear what the public has got out of it. Perhaps things would be worse without the bailout but they’re certainly no better. Wall Street banks have not significantly stepped up their loans to small businesses, college students, car buyers, or distressed homeowners. Much [...]
At a news conference held a short time ago, a bi-partisan claque of Congressional leaders stood before cameras to declare, finally and with great relief, “We have a Pope bailout!” Let the puff of white smoke rise from the Capitol’s chimney. Except none of them said exactly what is in the deal. How much money [...]
Assuming that the Bush-Paulson Wall Street bailout gets changed drastically by the time it’s passed, we can all tip our hat to Mother Jones. With everyone on the Hill screaming about the power grab Treasury Secretary Henry Paulson is trying to engineer, the magazine’s Nomi Prins deserves a deep thanks for noticing the really, really, [...]
On today in 1952, Republican vice-presidential candidate Richard Nixon went on television to deliver what came to be known as the “Checkers” speech. Appearing on flickering, black-and-white sets across America, his wife seated next to him like the stage prop she’d play for the rest of Nixon’s life, he denied allegations of improper campaign financing.
I urge you to oppose any bailout for Wall Street firms or investment banks, unless and until they completely open their books to examination by all Americans. President Bush, Treasury Secretary Henry Paulson, and Federal Reserve Board Chair Ben Bernanke appear to be rushing in to accept obligations of unknown size without Congressional authorization and [...]