Government

Bailout Spending Continues Despite Administration Claims

WASHINGTON (AP) — The Treasury Department says its bank bailouts are over, but the spending continues.

In a Sept. 22 speech, Treasury Secretary Timothy Geithner said the bailouts “are completely behind us.”

That’s not quite correct. In the final six months in which it could spend money from the Troubled Asset Relief Program, Treasury set aside $243 million for new contracts for law firms, accountants and money managers to help run what’s left of the bailouts — on top of the $529 million already spent on work by staff, private companies and other agencies. Many of the contracts last until 2019, and there‘s nothing to stop the government from hiring even more help if it’s needed to chase down the remaining bailout money.

Treasury’s authority to spend more from the $700 billion fund expired on Oct. 3. The law requires officials to recoup as much as possible of the $185 billion still in the hands of shaky private companies. After all collections are made, the government expects to be out about $51 billion, mostly from housing programs.

Rising voter anger ahead of next week’s elections has made Obama administration officials reluctant to speak candidly about the ongoing cost of managing TARP. Politicians who voted for the TARP law now face tough re-election fights. By downplaying their efforts, officials sidestep criticism of bailouts that helped Wall Street without easing lending or keeping many people in their homes.

A government watchdog said this week that public statements by Treasury officials around the Oct. 3 deadline appeared designed to create a mistaken sense that TARP is over.

“The idea that TARP is dead is just not accurate,” said Neil Barofsky, the special inspector general overseeing the program, in an interview. “People can write its obituary, people can declare that it’s been put out of its misery, but there’s still close to $180 billion of TARP money outstanding, and $82 billion obligated to be spent.”

Recapturing the outstanding billions is just as tricky as the work of distributing money to stabilize a financial system rocked by its worst crisis in decades, Treasury’s top bailout official said in an interview.

“When you’ve got $185 billion of investments out there, you don’t just say, ‘Gee, I’d rather not worry about it,’” Acting Assistant Secretary for Financial Stability Timothy Massad said. “This is work that anyone who looks at it would say, ‘If you closed up shop now we’d be much worse off.’”

Most of the contracts Treasury awarded recently are for work officials can’t even describe, because it’s not yet needed.

That means the contracts are vague. For example, 13 law firms will share up to $99.8 million under a contract so broad it could cover virtually any kind of legal work. Future information technology needs will be billed to three companies through a $100 million contract. Four accounting companies will ensure that Treasury’s rules for the bailout programs are followed — at a cost of up to $22 million.

Much of the remaining work will involve deciding investments’ values so that Treasury can resell them to the bailed-out companies or private investors. Treasury must sell shares of General Motors and Citigroup Inc. into the markets, and negotiate with banks that want to rebuy government-held stock options.

Treasury officials hope not to spend all the money authorized under the contracts. It’s too early to say how much will be tapped, they say.

More than a dozen programs were created under the fund, and each requires a separate exit strategy. For example, Treasury can’t sell its shares of General Motors until the company decides to offer them to private investors. The government won’t approve that move until it believes investors will pay enough to give it a good return.

Meanwhile, hundreds of bailed-out banks need their government loans to stay afloat. Treasury is cutting deals with some of them, taking losses and moving on. For others, the government will wait in hopes that they grow strong enough to repay.

That will take years, at least. The program raises the fees banks must pay over time, which is supposed to encourage repayment. Yet weaker banks have stopped paying dividends. Officials say they can’t force them to pay.

The recently awarded contracts suggest Treasury will continue a practice of outsourcing that was questioned in a recent report from the Congressional Oversight Panel monitoring the program. The report said that handing work to private vendors makes it impossible for the public to know that contractors are doing what they were hired to do or to ensure that they are performing well.

The panel mostly praised systems Treasury put in place to make sure contracts follow government rules, but did not investigate whether the systems are working. The special inspector general will audit them in a future report.

Treasury officials continue to cast TARP as a success. Most of the Wall Street giants that got the first bailouts have reported another quarter of profits.

Yet Treasury still has no plan for recapturing investments from the banks that can’t pay dividends or repay their bailouts. That program doesn’t have an end date.

Comments (69)

  • pamela kay
    Posted on October 31, 2010 at 3:12am

    Duh,Ya think?

    Report Post » pamela kay  
  • LasVegas Lady
    Posted on October 30, 2010 at 12:28am

    Did anyone really expect the Government to handle this money in a organized and ethical manner? How can anyone follow this convoluted mess? Nothing but lies and greed.

    Report Post »  
  • Contrarian51
    Posted on October 29, 2010 at 8:38pm

    As with any government program, the money needed to directly address the problem is the tip of the iceberg. The real money gets spent on the new agencies that are created to “oversee” and “administer” the processes and to pay outside contractors to do the same because the governmental agencies never actually hire people who can do the real work, rather they have to bring in people with actual expertise. Then fifty years later, these governmental entities are still around and draining our tax dollars while their purpose no longer exists, or new legislation has created more redundant bureaucracies to ostensibly do the same work.

    Report Post »  
  • Psychosis
    Posted on October 29, 2010 at 4:21pm

    lol your funny ABC but your still wrong as usual

    Report Post » Psychosis  
  • Edwardosan
    Posted on October 29, 2010 at 1:56pm

    The socialists will just make another slush fund.

    Report Post » Edwardosan  
  • RightPolitically
    Posted on October 29, 2010 at 12:27pm

    You mean they lied?

    Report Post » RightPolitically  
  • heavyduty
    Posted on October 29, 2010 at 12:26pm

    The Democrats are going to spend and drag AMERICA down just as far as they can. Because this will make it harder for the Republicans to fix everything they have done. But we the actual AMERICAN PEOPLE will watch all of the government and voice our concerns as need be. The Democrats want to care of us so we will be compliant up to the very end then they throw the switch and end AMERICA as we know it. If they hate AMERICA so much why do they just leave?

    Report Post »  
  • heavyduty
    Posted on October 29, 2010 at 12:23pm

    ABC: This person makes you wonder if he has a thought of his own. All he can do he just as all other Democratic Socialists is to ask you for proof. But yet never shows any of his own. I guess he got sick of all the crap that he spews. That‘s why we haven’t seen him in awhile. How’s them shovel ready jobs working for ya ABC?

    Report Post »  
    • abc
      Posted on October 29, 2010 at 3:20pm

      CBO estimated that the stimulus created more than 3 million jobs. That‘s a pretty good source since it’s a group of independent professional economists who are making that call–in contrast to the more political OMB.

      Report Post »  
    • Contrarian51
      Posted on October 30, 2010 at 12:54am

      Please. The CBO itself is technically non-partisan but when they are asked to make their projections and estimates, they are given a mandate to accept certain presumptions dictated by whoever wrote the legislation that CBO is being asked to score. Harry Reid can give them his health care monstrosity and tell them to assume 20% GDP growth, 30% population decline, you name it, and CBO has to use those assumptions in their projections. You can’t hang your hat on “CBO estimated” this or that because their estimates are based on false presumptions which, by design, produce pre-determined results desired by the sponsors of the legislation.

      Report Post »  
    • abc
      Posted on October 30, 2010 at 6:56pm

      Contrarian, that is true. But assumptions are not involved in counting jobs saved by the stimulus. The problem you are raising comes into play when we estimate the budget impact of the health care bill, but it isn’t really an issue for the question of employment.

      Report Post »  
  • sullinsea
    Posted on October 29, 2010 at 11:06am

    Here’s the most intriguing sentence in this entire article: “Most of the contracts Treasury awarded recently are for work officials can’t even describe, because it’s not yet needed.”

    Takes me back to first semester Contracts … can you even have one under those circumstances?

    Report Post »  
    • abc
      Posted on October 29, 2010 at 12:14pm

      Thank you for pointing out the logical non-sequitur. Just because an official cannot describe it doesn‘t automatically mean it isn’t necessary. If I ask what your surgeon did to your heart or your lawyer did to your trust and you say I cannot explain it–in the technical detail that I demand–it definitely doesn‘t mean that it wasn’t necessary. The government is not in the business of holding financial assets on an ongoing basis, so it isn’t surprising that a government official may not know about all of the custodial functions associated with holding and selling (at a profit, we should note) those assets back to the private sector.

      Report Post »  
  • Ruler4You
    Posted on October 29, 2010 at 10:31am

    Call it bail outs if you like. Its’ nothing more than cronyism pay offs.

    Report Post » Ruler4You  
  • moelarrycurly
    Posted on October 29, 2010 at 9:53am

    When the idea of the bailouts were first announced during the end of the Bush administration. I sat down and wrote a 6 page email to my congressman, Sherod Brown, pleading to NOT go forward with the bailouts. I am no economist (But then the ones who said they were and the bailouts would help, aren’t either apparently)-But I know that this defied common sense. A top down bailout? hmmm. And then to add insult to injury a ‘let them eat cake” stimulus check for $600? I would love to just go about my life without having to worry about the negative effect our government has had on the people. If there were no bailouts would it have hurt the economy? YES-but we would have got through the rough stuff a lot quicker. And these bailouts have only prolonged the misery. I’m in the car business. And my clients overall prosperity-directly effect my own. TERM LIMITS NOW!
    These congressman are bought and paid for with guaranteed monies from special intrest groups. Term limits will help to cut down on the possibility of graft and limit the ‘damage’ that can be done by any one representative.

    Report Post »  
    • EqualJustice
      Posted on October 29, 2010 at 10:41am

      I agree with TERM LIMITS. Too much opportunity for corruption when you have a life long representative. ONE four year term for ALL. Give it your best shot and do it with the only motive to SERVE the people, not for personal gain.

      Report Post » EqualJustice  
    • abc
      Posted on October 29, 2010 at 12:11pm

      Sherrod Brown is in Ohio. For the sake of the Buckeye state, I hope that other people living there are smarter than you are. Here are the facts, lest you look like a stooge:

      1. TARP saved us from a Great Depression. Warren Buffet’s partner, Charlie Munger, who is a life-long Republican, recently stated that every man, woman and child in America should “thank God” that their leaders in D.C. put the TARP package together. There is no question that it prevented economic calamities that make the current malaise look like child’s play. Now, he is a billionaire investor of legendary proportions. You are a mere mortal that ought to heed his expertise on the subject.

      2. TARP funds involved were very small. The GOP has essentially canonized Reagan as the greatest President since Lincoln, but Reagan’s efforts–which were identical in principle to TARP–involved the use of 2.5% of GDP for a much smaller financial crisis involving a couple of hundred small S&L’s. He also let Goldman Sachs do the work out and make a ton of profits from it. This time around, the government committed less than 1% of GDP, although the crisis was much, much bigger. And it was the tax payer that reaped the profits when the assets rebounded in value.

      3. There was no meaningful malfeasance involved. Bush lost $6B in cash in Iraq. That story didn’t get much play on Fox, but it is a fact. And the contracts for Halliburton, Cheney’s old firm, were egregious, with no-bid work rather than competitive bidding, and lots of problems with the final product (e.g., showers that shocked our soldiers because of faulty wiring). This group of morons do deserve your contempt about government top-down behavior, but you don’t criticize them. You criticize the guys that got it right. The money being spent now on lawyers and IT is the same money that Goldman Sachs or Fidelity would be spending because that is what is required to oversee the transfer (i.e., sale at a profit) of assets back to the private sector. The right ignores the outright theft of $6B but quibbles over money that is being properly spent. Why is that? Because they need to prove dishonesty even when none exists.

      4. Republicans are acting like hypocrites. The guys running GOP campaigns who denounce not only TARP but the entire stimulus package are also the guys that quietly petitioned for such funds for their district and wrote privately that they thought such projects would help rebound the economy. The Democrats are not making such duplicitous statements. This means that on the issue of stimulus, it is the Republicans that are lying, not the Dems.

      5. Ohio needs jobs and relies on Detroit for many of them. Extending TARP dollars to GM and FORD saved millions of jobs and has given those auto manufacturers time to rebound. They now have on average better safety and quality ratings than BMW, AUDI and MB. If they had gone under, you can add another 4% to the unemployment rate in your area. Think about the impact of that the next time you denounce the stimulus package.

      Report Post »  
  • HKS
    Posted on October 29, 2010 at 9:30am

    Aw, they are just being good little commies. Everyone knows these regular people are just a bunch of Homer Simpson‘s and can’t understand complex accounting practices. You knew it was a big slush fund when you passed the bill. If you want to see that money I have it on good source that some of it will be appearing at the polls to be given to these little people for their vote. So you see it really did trickle down to some peons. What a great country. It’s good to be the king.

    Report Post » HKS  
    • abc
      Posted on October 29, 2010 at 11:58am

      Let’s get this straight (and I’ll speak slowly for you “special” people out there), communism is when you PERMANENTLY nationalize all private assets and outlaw private ownership. There is no longer a civil society, only the government. And the government is only one party, the Communisty Party. Got it? Now, even my 7-year-old daughter knows that we own our house outright, not the Communist Party. She also knows that she goes to a private school, not a public one. She also knows that there are two major parties in America the one Barack Obama is in and the one that Sarah Palin is in. She is only in second grade, and she knows that our leaders are not Communist. But apparently you are not smarter than a second grader, much less a third grader…

      TARP was a temporary natinoalization of asset, just like your party’s saint, Ronald Reagan, undertook. When he did it, it was good policy. If Dems do the exact same thing, it is called communist. This is why the mainstream media ignores you. You are either woefully stupid or you are clinically hypocritical. And one other thing. Reagan spend 2.5% of GDP bailing out a couple of hundred little S&Ls in red states like TX and then let Goldman Sachs reap th profits. Obama spent less than 1% of GDP on a much bigger financial mess and then let the taxpayer keep the profits. Assuming you could get past your lies about Obama being a Muslim or your hatred about him being black for one second, what would a reasonably objective person say about Obama’s accomplishment next to that of your canonized Reagan? The truth hurts, doesn’t it??

      Report Post »  
  • JohnDoe
    Posted on October 29, 2010 at 9:28am

    You Can’t Fix Stupid – but you Can Vote ‘Em Out !!!

    Our great country was founded by and for the citizens of the thirteen colonies. It was designed to insure that a central government was controlled and limited by representatives of those citizens. It was given a limited amount of power, with many checks and balances, to secure the rights and freedoms for its citizens. They were making sure that an American Government would and could not become as Britian had. England enacted laws and taxes on their American subjects, but without allowing the colonies a say in their government. Ignoring the will of the people of America, they bullied and took away what limited rights they had and tried to force them to comply. Sound familiar? Yes, we don’t have to look far across the Atlantic at a despotic leader, we have only to look at the Oval Office in Washington, D. C. and to those whom we had entrusted the liberties of the people and the country. Our representatives, Senate and the House, are there to represent the will of the people. Instead, they have consistently lied to their constituents, both during campaigns and when in office. They have consistently robbed the American people, not only of their money, but also by stealing their liberties, little by little. The incumbent office holders allow themselves to be above the law, they allow themselves to steal by back-room corrupt deals and the like. They ignore the very people who put them in office, they even resort to passing laws, under cover of darkness. They hide laws and corrupt deals in the midst of thousand of pages of laws. This has always been a trick of unethical lawyers. Their mindset is to bog down any opposition by inudating them with mountains of paperwork. Then, they laugh and call the people stupid and ignorant, or worse! No doubt, I could go on and on. Their lack of character, morals and ethics makes them unfit to be employed anywhere, let alone entrusted with the security, freedom, and economic growth of this great country. They have taken your freedom to worship, especially targeting Christianity. They have tried to rewrite the American history, to further their agendas, just like the Moslems continue to do with Israel.

    Soon after deciding what sort of Government America was to become, that very question was asked of Benjamin Franklin. In reply Franklin said, “A Republic….if we can keep it”. This is a question that should be upon the lips of all true American patriots. If we can’t or more correctly, if we won’t, then we don’t deserve it. The choice is up to us, the American people, and the answer should be and must be yes we will!

    You’re probably asking how do we insure that we will keep this nation a free Republic. Oh, we voted for only those who promised no more taxes, no more spending, etc., etc. Of course they all were proven to be liars again (or should I have said they were just not quite forthcoming or perhaps they were a little disingenuious?). Then we did the “best of the two evils” choice. This was no different than the “Magician’s Choice” trick! We now know that there is no difference between Republicans and the Democrats when it comes to which is telling the truth. Neither has the best interest of America at heart, probably not even in mind! Their goal is simply to acquire power, money, more power and more money while doing and saying anything to remain in office.

    So what is the answer? They don’t listen when the people, overwhelmingly, protest and tries to voice their opposition. So the American people need to get their UNDIVIDED attention. How? WE THE PEOPLE, must vote any and all incumbents out of office. It doesn’t matter if they are better than most. If they haven’t been part of the solution, then they are part of the problem. THEY MUST KNOW AND WE MUST LET THEM KNOW THAT GOVERNMENT WILL NO LONGER BE RUN BY ROUGUE LAWYERS AND OPPORTUNISTS, PROGRESSIVES (AKA SOCIALISTS), ETC. THEY ARE NOTHING MORE THAN MODERN-DAY CARPETBAGGERS OR WANNA-BE DICTATORS. THEY MUST BE EDUCATED TO THE FACT THAT THEY WILL BE VOTED OUT AGAIN AND AGAIN, UNTIL THEY LEARN THAT OUR REPRESENTATIVES ARE NO LONGER ABLE TO RUN THEIR OWN VERISON OF CRIME, INC.
    AND THOSE THAT ARE ELECTED TO OFFICE, BUT CONTINUE TO DO WHAT IS BEST FOR THEIR OWN BENEFIT WILL SOON LEARN THEY WILL HAVE ONLY ONE TERM IN OFFICE.

    We, the people, need to lobby our newly elected representatives to enact new laws to insure ALL our freedoms, our security, etc. Enact laws that ethical or criminal behavior of representatives will be prosecuted swiftly and severly, with no possibility of any pardon…not by a state Governor nor by a President! Enact laws or amendments to limit a President to one term only, ensuring that any damage to our country will not be as damaging as is obvious with this Government. Further limit the terms of our Representatives, both in the Senate and the House. Imperative to limit the term of all Supreme Court Justices to no more than an eight year term and make an amendment that the justices can no longer re-interpret the Constitution, but uphold the laws as it was written and intended by the original framers.

    So, the bottom line is this: unless the American people get the undivided attention of those in government…when you and your family members are homeless and hungry or at the very least jobless…remember, you have only yourselves to blame.

    THE ONLY WAY TO INSURE THAT YOUR FUTURE REPRESENTATIVES WILL LISTEN TO ITS CONSTITUENTS IS VOTE OUT ALL INCUMBENTS!!! FROM THAT POINT ON, EACH REPRESENTATIVE MUST KNOW WE WILL VOTE THEM OUT AGAIN AND AGAIN UNTIL WE HAVE RESPONSIBLE REPRESENTATIVES THAT UNDERSTAND THEY ARE THERE FOR THE WILL OF THE PEOPLE.

    You Can’t Fix Stupid – but you Can Vote ‘Em Out !!!

    Report Post »  
    • nodems
      Posted on October 29, 2010 at 11:55am

      You must be talking about all the responses ABC has made here…he really is stupid

      Report Post »  
  • whybother
    Posted on October 29, 2010 at 9:21am

    ITS BUSH’ FAULT! Why doesnt anybody listen to me? waa waa waa (liberal inflection intended)

    Report Post »  
    • abc
      Posted on October 29, 2010 at 11:51am

      It is Bush’s fault. He also was in favor of TARP, so he deserves some of the blame. And since it was a success, that blame should be called credit. The Iraq War, though, was a really dumb idea.

      Report Post »  
  • dablooz
    Posted on October 29, 2010 at 9:07am

    I’d like some of that bailout dough! Not anyone else’s, just the cash they’ve stolen from me for the last few years and abused. I want a refund! As a taxpaying cutomer of this government, I am NOT satisfied!

    Report Post »  
    • abc
      Posted on October 29, 2010 at 11:50am

      TARP made money for the taxpayer, and both Bush and Obama already sent tax rebate checks either directly or indirectly. How many handouts do you want??

      Report Post »  
  • Marine Recon Dad
    Posted on October 29, 2010 at 8:53am

    Whether it be this Administration, which has been the BIGGEST LIAR of all, or previous ones, one thing is sure – you CANNOT trust what come out of the mouths of career politicians and administrators. The only ones they care about is…. themselves.

    Report Post »  
    • abc
      Posted on October 29, 2010 at 11:49am

      Unlike Bush or Reagan or Nixon. They cared about you. I mean, they really cared about you personally. How naive you are.

      Report Post »  
    • Beckofile
      Posted on October 29, 2010 at 4:51pm

      ABC NBC and CBS
      Do not tell me anyone cares for me when they are stealing my liberty with the excuse it is for my security. I don’t need a caring government. I need a small one so I can care for myself.

      Report Post » Beckofile  
  • rfycom
    Posted on October 29, 2010 at 8:50am

    Buy stuff PEOPLE. Want to fix the economy? Buy stuff. We republicans should be leading this country right now by buying stuff. Stop trying to make it complicated and stop trying to blame it all on Obama. Go out and buy stuff. We got the best jobs, We got all the rich folks. If you want to help this country, buy stuff. Can I get an Amen?

    Report Post »  
    • Mannax
      Posted on October 29, 2010 at 8:57am

      The aura of troll, this one has. Strong in the troll, he is.

      Report Post »  
    • oldoldtimer
      Posted on October 29, 2010 at 9:17am

      Are you crazy? Buy stuff and help the Chinese economy. Now if you can find it(big if) and buy American then I agree. Other wise you just make Wal Mart more profit. For every $3.49 of Chinese junk we buy they only buy $1.00 worth of raw materials from us. China now controls over 95% of rare minerals and metals needed to make computer chips and solar cells. How you like them Chinese apples? We are well on the way to going bust. We do not have enough manufacturing capacity to even fight back if we were attacked. Now that is scary. Buy stuff??? You sound just like A stupid Dem.

      Report Post »  
    • Race
      Posted on October 29, 2010 at 10:15am

      In the pedantic mentality of central bankers, their playbook creates just the right amount of inflation. As inflation accelerates, consumers will spend to get rid of their dollars of diminishing value and spur the economy. Once consumers start spending, it will be time to raise interest rates because a solid foundation for prosperity will have been established, they say.

      The above from an article on Bloomberg.com this morning regarding the Fed’s plan to introduce inflation to spur the economy. It’ll be a train wreck.

      Report Post » Race  
  • hempstead1944
    Posted on October 29, 2010 at 8:47am

    No surprises here…..this administration has largely ignored the law ever since being elected…..

    Report Post »  
    • abc
      Posted on October 29, 2010 at 11:48am

      What law did they break with TARP? Please be specific.

      Report Post »  
    • Beckofile
      Posted on October 29, 2010 at 1:01pm

      ABC
      Have you ever looked up who owns the fed. Was it the past CEO of Goldman Sachs that bailed out his buddies. Remember many of us here do know that Bush ran the car off the road and handed the keys to another drunk teenager. The problem is that the car should be driven by the private sector and the road crew (government) should have been busy maintianing a fair and equal driving experience for all. They have stolen the keys and are speeding toward the cliff. This will explain to your “Hope” brain that those who created the problem pulled off the biggest theft in history. George Washington said “The last official act of any government is to loot the treasury” It is much more simple then all your facts spell out. Justifying the Heist because you needed to pay your bills is no justification at all!

      Report Post » Beckofile  
    • abc
      Posted on October 29, 2010 at 3:04pm

      Beck,

      The American people own the Fed. And it has served us well over the years. It is not perfect nor popular right now, but its functions are critical, which is why every country in the world has a Fed. Sorry, but George Washington could not have forseen the development of modern economies that require monetary policies controlled by centralized states. But I suppose you’ll also consult Washington when you need medical advice. I mean, what was good for our founders is all that we should ask for ourselves. We don‘t need an FAA to oversee flights because Washington didn’t forsee human flight either. What nonsense bringing Washington into a debate over the Fed and its policies. The fact is that the Great Depression might have been averted had they had the kind of institution that we now have today. It’s called progress. It doesn’t mean all is perfect–note the reckless printing of money to live beyond our means–but it doesn’t mean we go back to an era with no coordinated monetary policy at all. That is just nonsense talk from people who don’t understand the role of the Fed or the function of the modern economy.

      Report Post »  
    • Letsgetserious
      Posted on October 29, 2010 at 4:17pm

      ABC, you are on a roll…

      Yeah, the Fed policy of artificially keeping interest rates low was brilliant. Maybe if credit weren‘t so cheap over the last 15 years people don’t live way above their means nor buy homes they really couldn’t afford. Not like that had anything to do with the economy tanking. Maybe the Republicans did have a few good ideas. Comparing this to the S&L bailout is laughable…

      “In the last year of the Republican Congress House GOP leaders were determined to try again. They put forward H.R. 1461 [109th]: Federal Housing Finance Reform Act of 2005. The bill would have stripped control of Fan & Fred from the Housing and Urban Development Department where Cuomo had turned it into a regulatory farce.

      The bill would also introduce “anti advocacy provisions” barring money from Fan & Fred being used as a slush fund for liberal lobbying organizations.

      Despite Democrat opposition to that measure the bill passed the House, but could not get a vote in the Senate even after the anti-lobbying provision was removed.”

      Report Post »  
    • Beckofile
      Posted on October 29, 2010 at 4:41pm

      ABC
      Actually the Fed was created in 1913. I think it was created to stop the boom and bust cycle? Wow It has done a great job especially in the 1930′s depression. It’s fractional reserve banking system built on a fiat currency is just working great. I think you obvious blunder of saying we the people own the Fed shows how economically retarded you are. Just google who owns the fed and do a little reading. It is a cartel of banks, yes the ones that bailed themselves out on your childrens credit card.

      Report Post » Beckofile  
    • Beckofile
      Posted on October 29, 2010 at 4:45pm

      ABC,
      It was many laws they broke. When they put the 1st bond holders below the unions and gave them 10 cents on the dollar and gave the unions a huge chunk of the company they broke hundreds of years of law. The bond holders got screwed and the unions made out like bandits. It was a heist.

      Report Post » Beckofile  
    • abc
      Posted on October 29, 2010 at 7:44pm

      LetsGetSerious,

      The Fed didn‘t put a gun to anyone’s head, so blaming cheap credit on overextension is a bit of a stretch. You can go back to about 1980, after the Baby Boom generation got into the workforce
      in substantial numbers, and you’ll see that aggregate consumption numbers started to grow faster and outstrip aggregate income. This means that the borrowing to pay for a lifestyle people couldn’t afford started even before we got really low interest rates. Your claims do not match up with the historical record.

      Cheap credit also was around for a while and wasn’t the lone cause of the crisis. Poor regulation of the banks and over-reliance on private sector ratings agencies, which are a terrible proxy for an aggressive SEC, are bigger sources of blame.

      Merely asserting that you cannot compare TARP to the S&L workout is not an argument. Try again with real facts. I put some numbers on it and argued that both issues relate to bad assets that crushed the balance sheets of financial institutions. These are totally comparable, from the standpoint of efficiency of resolution. Just because you don’t like the logical conclusion–that Obama did better than Reagan–doesn’t make it less true.

      Blaming everything on Fannie and Freddie is silly. By definition, those institutions do not originate subprime loans, which are the most toxic assets that poisoned bank balance sheets. Now, they might have syndicated them, but only a fraction of what the private sector did. Proof of this are the default rates on GSE (Freddie and Fannie) assets versus those in the private sector. When I last looked at this about a year ago, teh private sector’s default rate was running at about 2.5 times the rate of the GSEs. You conservatives have no idea what you are talking about–other than the fact that GSEs are a good way to tar and feather Democrats. You understand the politics, but not the economics. Hence, you assessment looks ridiculous from the standpoint of an economics and finance expert.

      Beck, I know the Fed was created in 1913, but many of its powers that make it effective today were only added after the crash in ‘29 and the depression of the ’30s. Even the great conservative economist Milton Friedman has noted in his work that the Fed should have had more power to avert the ‘29-’32 crisis than it did. Read much?

      Also, banks do not own the Fed in the sense that you mean. From the Fed website (and pay close attention to how shares of the Federal Reserve operate unlike owning shares in a private company):

      “The Federal Reserve System is not ”owned” by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

      “As the nation’s central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as “independent within the government.”

      “The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”

      Also Beck, no laws were broken. Bondholders knew that they were headed to bankruptcy without the government intervention. So the bondholders could have taken their chances their with a first lien, but they didn’t. That means that they thought that they would get a worse deal in bankruptcy court and with a fire sale of assets. As it happens, they likely will recover $7B at the time of the IPO for their $27B in bonds or about $0.25 on every dollar. That is not as good as what the unions got, but it is apparently better than what the bondholders thought they’d get in bankruptcy, which is probably true…in hindsight. Thus, you can disagree with the treatment of bondholders relative to unions, but you cannot say that laws were broken. The bondholders could have gone into bankruptcy and decided against it. This was clearly not a heist.

      Report Post »  
    • Beckofile
      Posted on October 29, 2010 at 8:08pm

      So ABC you are going to refer to the Feds own website for the truth??? You are funny. Banks do own the Fed and you are on the hook for their crookery. How is that dollar treating you today? Why is there a bill that is being pushed by some in the government to audit the fed? Under your thinking its as if the government knows what they are already doing? What about the 2 trillion that they loaned out (created with a the push of a key) to who knows who? Watch next week when the fed creates money out of thin air and buys crap from banks and in return the banks will purchase bonds. This whole bunch of trickery will result in them having not only your kids credit card but also their kids. Hope your happy with with what I call dilution of your fiat paper. I suggest some gold because it will still purchase for me what it purchased for my grandparents. Anyway I am not that learned about these issues but I don’t trust any of these crooks.

      Report Post » Beckofile  
    • abc
      Posted on October 30, 2010 at 6:54pm

      Beck, the point is that they do not profit from these shares nor do the shares confer any control. You claim the opposite, which is not true. You can go look at a different site, but the Fed is not going to post a lie on its own page. Get serious. Are you a conspiracy theorist? Please get your facts straight, which you clearly have failed to do.

      Report Post »  
  • mimitweetin
    Posted on October 29, 2010 at 8:45am

    Nothing but LIES! Time to put these crooks in their place. I hope everyone is making sure their friends and family get to the polls on Tuesday.

    Report Post »  
  • patriotsofworkingamerica
    Posted on October 29, 2010 at 8:41am

    All I can say is “Thank God we have these Congressional Oversight Panels!” If it weren’t for these government watchdogs our country would more likely be broke. Heeeeeeeey wait a second… we are broke!!!!!! Who’s fricken bright idea was it to have the government monitor the spending of the government!!!???? I love the comment by the oversight panel, ” The panel mostly praised systems Treasury put in place to make sure contracts follow government rules, but did not investigate whether the systems are working. The special inspector general will audit them in a future report. I wonder what the audit will turn up, say… a decade from now?

    Report Post » patriotsofworkingamerica  
    • abc
      Posted on October 29, 2010 at 11:48am

      We the taxpayers made money on TARP and there was no material malfeasance reported. Bush lost $6B in cash in Iraq, and you guys on the right didn’t say a word. Stop pretending that you are principled small-government types and admit that you are conservatives who would hate the left if they brought you world peace, the end of cancer, and a better Tuesday lineup of television programs.

      TARP is the greatest success we have seen from a government program in 70 years. Your children and grandchildren will study it in school in an approving manner. Only your ignorance keeps you from understanding how great it was.

      Report Post »  
    • HillBillySam1
      Posted on October 29, 2010 at 2:50pm

      Hey, ABC……can you help me out with a little problem that I am having??? You see, I play the state lottery here in my beloved Commonwealth of Kentucky and my state officials keep telling me that I am a winner for doing so but I never get a winning ticket……..I just can’t figure that out……sorta like the TARP program. Any assistance in this perplexing matter would be deeply appreciated. Thanks!!!

      Report Post »  
    • abc
      Posted on October 29, 2010 at 3:06pm

      Hillbilly, not sure about KY but in OH and CA and IL and IN a portion of the lottery pays for public schools, so the benefits do accrue.

      Report Post »  
  • OneRepublic4us
    Posted on October 29, 2010 at 8:40am

    Well…another special interest group (lawyers) get their cut of the pie. I think we need an audit! Oppps the accountants got a cut too! Everyone knows the IRS can’t be trusted.

    Report Post » OneRepublic4us  
    • abc
      Posted on October 29, 2010 at 11:45am

      Hmm. When Fidelity needs to handle custody of securities, guess who they hire? Lawyers, accountants and IT professionals. Apparently, when the government does the same for the exact same purposes, then it is communism. You people are beyond ignorant.

      Report Post »  
  • Star Spangled
    Posted on October 29, 2010 at 8:37am

    I can’t wait til 2012 , that pig wearing lipstick sounds like a better president than what we have now .

    Report Post » Star Spangled  
    • abc
      Posted on October 29, 2010 at 11:44am

      Even Karl Rove would disagree with you. How is the air out there on the fringe?

      Report Post »  
  • snowleopard3200
    Posted on October 29, 2010 at 8:31am

    Once again I state the obvious to everyone…another government program that is suppose to be overwith that in acuallity is not yet overwith, and no one will fess up as to it not being overwith or even when/if it will be overwith.
    http://www.artinphoenix.com/gallery/grimm (mix art)

    Snowleopard {gallery of cat folks}  
    • abc
      Posted on October 29, 2010 at 11:43am

      Charlie Munger, who is so much smarter than you on issues of economics and finance it isn’t even debatable, recently said that when it comes to TARP the American public should simply thank God they put that program in place. It should also be noted that the US taxpayer has MADE MONEY on this program. This story, which quibbles over the money spent (necessarily, I might add) on legal and IT infrastructure to sell the assets back to the private sector, is just total hogwash. Ronald Reagan, who the GOP has essentially canonized, spent 2.5% of GDP to save a couple hundred little S&L’s, while Obama, who the GOP has demonized, spent less than 1% of GDP to save the entire economy. And while Goldman made all the money on Reagan’s S&L crisis work out, the tax payer made the money on Obama’s TARP program. Your partisanship is getting the better of your faithful recollection of recent and less recent economic history. Shame on you.

      Report Post »  
    • BoilitDown
      Posted on October 29, 2010 at 12:46pm

      ABC:..Not debatable? Are you serious? There are a good many reputable economists who would eargerly debate Munger on the subject of TARP.
      The reason I know this is that I was trying to figure out why another “smart guy”, Paul Krugman, a Nobel prize winner and graduate of Yale had a history of being so wrong so much of the time. It became clear that Krugman’s ideology, like Munger’s is that of Keynesianism which is behind his opinions.
      Those who embrace the Austrian School of Economic Thought and followers of Friedrich Hayek seem to be right about macreconomics more often than Keynesians. They admit the initial need for TARP but recommended it to end some time ago. I am not equipped to debate TARP but, I am much more inclined to trust those who have come out in opposition.

      Report Post »  
    • Beckofile
      Posted on October 29, 2010 at 12:54pm

      ABC

      Can you tell me if it was Bush or Obama that created TARP. Obama did spend Trillions that have nothing to do with TARP. TARP will prove to be foolish or important but the stimulus was a different sort of spending spree.

      Report Post » Beckofile  
    • abc
      Posted on October 29, 2010 at 2:57pm

      Boil, name one economist that said that TARP didn’t save the economy and was a total waste of money. Please name one credentialled economist. I watched a Congressman from Illinois deliver that line on CNBC and was laughed at by the pro-market Republican host. As he noted, there are hundreds of economists that have been on CNBC in the last three years and all of them have said that TARP help, and most say it helped a lot. “Get real.” Is how he concluded his little lecture of the know-nothing Congressman. This is CNBC. The channel that gives Kudlow and hour to talk supply side economics. These are not liberals but rich pro-market conservatives. You cannot even name one economist and you’d be laughed out of the business and financial press with such dumb comments. But I digress… Just name one.

      Report Post »  
    • abc
      Posted on October 29, 2010 at 3:00pm

      The process of architecting TARP started under Bush and was passed and implemented under Obama. Both Presidents supported the measure. Obama extended a small part of it ($20-30B) to Detroit manufacturers that would have gone bankrupt otherwise, and this investment saved several hundred thousand jobs. I believe that this was a smart extension, especially given the fact that the entire program was not very large and earned the taxpayers a return on their investment. Heck, this program was much better than the one Reagan implemented to rescue the S&L’s, as I’ve explained below.

      Report Post »  
    • BoilitDown
      Posted on October 29, 2010 at 4:15pm

      ABC
      All I was saying is that TARP is being debated and therefore debatable. As I said, most of the economists that I trust said that the initial idea of TARP was actually necessary.
      For the most part, I trust The Mises Institute’s assessment of economic news, but I‘ve seen other aritcles in Barrons and the Economist that don’t speak highly of TARP either. For the most part, they see it being badly implemented and any further TARP spending is a mistake.
      I just searched out the economists who have had a history of being right most often.

      Report Post »  
    • Beckofile
      Posted on October 29, 2010 at 4:32pm

      ABC
      How can you tell me the program will be good for us? On a smaller scale I keep watching my dad bail out my lazy alcoholic brother and month after month he comes back for more. Let them fail and hit rock bottom. Toyota, Honda, Ford, Kia ETC would have picked up the useful auto worker when their sales would increase due to a the competition failing. By the way the bail out of Government Motors was a bail out of the failed Unions. They were tanking the company and sense they could not afford it why not pass it on to the taxpayer? I will never buy another union car so that I do not participate in failed economics.

      Report Post » Beckofile  
    • abc
      Posted on October 29, 2010 at 7:09pm

      Boil, I don’t know what the early part of TARP means. The Fed took bad assets off bank balance sheets and will gradually put them back by selling them at a profit. This requires ongoing costs, which is what this article from know-nothing Beck attempts to highlight in order to discredit TARP. Only a fool would attempt to discredit TARP and only an idiot would try to discredit TARP on this basis.

      Beck, by your definition of debatable, my debate with a crazy person on the question of whether Martians control the US government is a debatable issue. This is nonsense. People who know nothing should not be considered part of the debate. As for the auto companies, clearly that was more of a stretch, which is why the Economist and other editorialists balked at it. The reason is that GM and Ford are not as critical to the entire economy since they don‘t supply capitalism’s oxygen, known as credit to the wider economy. However, there is no question that saving GM from bankruptcy has saved jobs and given it a chance to compete. Your comments about unions are silly. GM is mismanaged from top to bottom and that is the fault of executives more than labor. Conservatives like to blame unions but then they ignore the fact that union membership is a lot higher in Germany, but that country is an export powerhouse with great products including cars. If you knew how much tougher the union negotiations and demands are in Germany, then you would not make such a simplistic argument that doesn’t accord with the facts on the ground. But I guess you prefer the fantasy of your nonsensical narrative to the real facts and analysis that are readily available to a more facile and curious mind.

      Report Post »  
  • Hondaman
    Posted on October 29, 2010 at 8:29am

    Imagine that – the govt. not being totally honest with us.

    Report Post »  
    • felina g
      Posted on October 29, 2010 at 9:37am

      Law of Revelation:
      The hidden flaw never remains hidden.

      Report Post »  
    • abc
      Posted on October 29, 2010 at 11:39am

      Actually, in this case they are being honest. They have billions of dollars in assets to oversee and sell back to banks. This requires both a legal and IT function that will be needed until the very last asset is returned to the private market.

      By the way, the US government (and thus the taxpayer) MADE MONEY ON TARP, so this complaint about throwing money away that is required to continue to ensure that there is no graft or errors in the resale process–something private sector banks cannot say about their foreclosure processing–is really a desperate attempt to prove what has been resoundingly discredited already. TARP was a huge success and anyone who thinks otherwise doesn’t have a brain in their skull.

      Report Post »  
    • Letsgetserious
      Posted on October 29, 2010 at 3:53pm

      ABC, in your honesty quest you should also point out how 9 banks were forced to take TARP money. Obviously some of the banks didn’t need the money so repaying it at a profit (especially given the rate between what they had to pay vs what they could lend it for) isn’t a big deal. Ford magically didn’t need bailout funds or bankruptcy. If some banks had to be forced to take funds then maybe this dire tragedy actually wasn’t as bad as we were led to believe as many “credentialed” economist have pointed out. The details matter to those who have a problem with 2000 page bills not being read before being passed and celebrated.

      Report Post »  
    • abc
      Posted on October 29, 2010 at 7:02pm

      LetsGetSerious, get real. The federal government guaranteed all of the bad assets on those nine banks’ balance sheets, as they did for all other banks. Even excluding those 9 banks, the system would have gone under without TARP and you can see the recovery of the stock market and the commercial paper market from the moment TARP was finalized…to the day. You clearly don’t know what you are talking about. And linking TARP to 2,000 page bills shows how little you know. Totally irrelevant comment. John Kerry’s comments about know-nothings clearly applies to you, whether that is a politically correct observation or not, because it is clearly true. Charlie Munger is an investing genius and life-long Republican, and he thinks you should simply thank God for TARP. I’ll take his opinion over yours any day of the week and twice on Sunday.

      Report Post »  
  • HouseNegro
    Posted on October 29, 2010 at 8:16am

    There is not enough LipStick to cover up this PIG lil’ Timmy…….

    Report Post » SpankDaMonkey  
    • Stegosluggus
      Posted on October 29, 2010 at 9:01am

      Shurmus said he agrees…and pigs look horrible in lipstick. We aren’t authorities on human behavior yet, but these guys seem like bad news.

      http://www.slugbuddies.com

      Shurmus  
    • HillBillySam1
      Posted on October 29, 2010 at 9:15am

      Yeah, Joy Behar is a perfect example of that! Come to think of it, is there a requirement that Progressive women have to be butt-ugly?? Uh, oh…..now I have become a “lookist”! First I was a racist, then a homophobe, then a global warming deniar, then a hater……oh, that slippery slope is just getting more and more slipperyer….er.

      Report Post »  
    • Polwatcher
      Posted on October 29, 2010 at 10:33am

      It makes perfect sense to liberals to have a shady character as the head of the Treasury Department.

      Report Post »  

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