Democrats have decided that in order to prevent Wall Street from starting more financial meltdowns, wrecking the economy and leaving the American taxpayer holding the bag, we need to give more oversight authority to the same government employees who were busy surfing Internet porn as private investors frantically tried to warn them about Bernie Madoff.
The Democrats’ financial “reform” bill also includes a $50 billion bailout fund – that’s million with a “B” – that will save the Democrats from the unpleasant task of having to go on record voting for another Wall Street bailout.
Under the Democrats’ bill, the FDIC will distribute the bailout money to Wall Street bankers without Congress having to take any action at all. (In the House version, the slush fund for the Democrats’ Wall Street friends is $150 billion.)
True, the billions of dollars will be doled out to banks for the purpose of “dissolving” them. So what? They’ll come back under a new name. But the guilty parties will lose no money for making bad bets – although if the bets paid off, they’d take all the profits. That’s what Democrats mean by “accountability.”
Not surprisingly, the only politicians opposed to a permanent bailout fund for bankers are the politicians not owned by Wall Street – that is, most Republicans and one socialist, Bernie Sanders of Vermont.
The Democrats’ defense of Wall Street’s golden parachute is to say Senate Republican leader Mitch McConnell used a “talking point” formulated for him by pollster Frank Luntz in opposing the bailout fund.
As Frank Rich explained in the New York Times, the bailout fund is not a bailout fund because “Sen. Mitch McConnell went on CNN to flog his big lie that the Senate reform bill somehow guaranteed bank bailouts – a talking point long ago concocted for the GOP by its favorite spin strategist, Frank Luntz.”
In other words, it must be a lie because … because Frank Luntz told McConnell what to say and then McConnell said it on CNN!
Yes, and Steve Jobs gets his best ideas from parishilton.com.
Sen. McConnell doesn’t need Frank Luntz to explain anything to him, least of all the financial-reform bill. A fifth-grader could find out about the permanent bailout fund simply by reading the bill.
You will notice that neither Rich nor any of Wall Street’s defenders specifically deny the existence of a permanent bank-bailout fund in the Democrats’ bill. They just say McConnell used a “talking point” to denounce it. (You might say this has become a “talking point” for Democrats defending the bill.)
Wall Street’s defenders also crow that the money in the bailout fund won’t come from taxpayers! (There’s a newfound sympathy.) No sir, it will come from “the banks.”
That’s like saying that the original bailout money didn’t come from the taxpayers – it came from the government! Where do Democrats imagine banks and the government get their money?
Banks, like the government, are entities that spend money they collect from human beings. We’ll all be charged up front to cover Gordon Gekko’s future bad bets.
In other words, the Wall Street slush fund will be paid for by a group of despicable fat cats recently discovered by the Democrats known as People Who Have Bank Accounts. Damn them!
Another idea, based on the ancient concept of personal responsibility, comes from financial writer James Grant. He proposes that the bankers – are you sitting down? – take their own losses.
Let them keep their humongous salaries, Grant writes, but if their bank fails, “let the bankers themselves fail. Let the value of their houses, cars, yachts, paintings, etc. be assigned to the firm’s creditors.”
There’s nothing wrong with speculation, creating derivatives or selling them, especially to sophisticated investors. The problem is that when the bets go bad, the speculators keep being backstopped by the government – i.e., “by me and people like me.”
Strangely enough – for a bill that allegedly sticks it to Wall Street – during the Senate Banking Committee hearing this week, Goldman Sachs Chairman Lloyd Blankfein endorsed the Dodd bill. Someone should have asked him who from Goldman wrote it.
In 2008, Goldman employees gave a record-breaking $1,007,370 to the Obama campaign.
This year, the “securities and investment” industry has already given twice as much money to the Democrats as to the Republicans.
ABC News reports that “the five biggest hedge-fund donors all gave almost all their donations to Democrats.” Among the biggest recipients of hedge-fund money were Sens. Harry Reid (Democrat), Chris Dodd (Democrat) and Charles Schumer (Democrat).
Even with the evidence right in front of their eyes, people still believe that it’s the Republicans who are in Wall Street’s pocket.
How out of touch with reality would a comedy writer have to be to write the following joke for Jay Leno this week: “The head of Goldman Sachs was going through security and was asked to empty his pockets – and five Republican senators fell out.”
Why didn’t Barack Obama or Chuck Schumer fall out? Why not Rahm Emanuel, who worked for Goldman? Or Greg Craig, who used to work for Obama but just took a job with Goldman?
The fact that anyone laughed at that joke proves that Republicans have a serious PR problem.