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McCain: Paulson and Bernanke Promised that the $700 Billion Troubled Asset Relief Program Would Focus on the Housing Meltdown
The Arizona Republic reports:
Sen.
John McCain of Arizona ... says he was misled by then-Treasury
Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke.
McCain said the pair assured him that the $700 billion Troubled Asset
Relief Program would focus on what was seen as the cause of the
financial crisis, the housing meltdown.
"Obviously, that didn't happen," McCain said in a meeting Thursday with The Republic's
Editorial Board, recounting his decision-making during the critical
initial days of the fiscal crisis. "They decided to stabilize the Wall
Street institutions, bail out (insurance giant) AIG, bail out Chrysler,
bail out General Motors. . . . What they figured was that if they
stabilized Wall Street - I guess it was trickle-down economics - that
therefore Main Street would be fine."
McCain isn't the only one to say that Paulson was doing a bait-and-switch.
The TARP Inspector General found that Paulson misrepresented the too big to fail banks' health in the run-up to passage of TARP.
Congressmen Brad Sherman and Paul Kanjorski and Senator James Inhofe all say that the government warned of martial law if TARP wasn't passed (Inhofe says Paulson was the one doing the talking).
And Paulson himself has said:
During the two weeks that Congress considered the [TARP] legislation, market conditions worsened considerably. It
was clear to me by the time the bill was signed on October 3rd that we
needed to act quickly and forcefully, and that purchasing troubled
assets—our initial focus—would take time to implement and would not be
sufficient given the severity of the problem. In
consultation with the Federal Reserve, I determined that the most
timely, effective step to improve credit market conditions was to
strengthen bank balance sheets quickly through direct purchases of
equity in banks.
So Paulson knew "by the time the bill was
signed" that it wouldn't be used for its advertised purpose - disposing
of toxic assets - and would instead be used to give money directly to
the big banks. But he didn't tell Congress before they voted to approve
the TARP legislation.
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The funniest thing in the world will be the realization by the masses that there wasn't even a crisis. (fabricated nothing in the context of crisis is still fabricated nothing)
The entire crash was a hoax which is ongoing to this second.
If you think there was a crisis, or that any of this is out of the league of control of all those involved (big banks and corporate welfare recipients) you got punked and don't deserve the oxygen in your lungs!
Hey when lying, cheating and stealing is such good business, why would anyone stop??
Your money is going to flow to the oligarchs until it doesn't. What are you doing to stop it?
What bait? This was all switch!
WHEN will Geithner, Goldman, Paulson be led off in HANDCUFFS????
WHEN will our government admit the COVER UP and prosecute those involved???
Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs
Feb. 23 (Bloomberg) -- When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention.
Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup. Geithner countered that he had acted properly to avert the collapse of the financial system.
A potentially more important development slipped by with less notice, Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.
These were the deals that pushed the insurer to the brink of insolvency -- and were eventually paid in full at taxpayer expense. The New York Fed, which secretly engineered the bailout, prevented the full publication of the document for more than a year, even when AIG wanted it released.
That lack of disclosure shows how the government has obstructed a proper accounting of what went wrong in the financial crisis, author and former investment banker William Cohan says. “This secrecy is one more example of how the whole bailout has been done in such a slithering manner,” says Cohan, who wrote “House of Cards” (Doubleday, 2009), about the unraveling of Bear Stearns Cos. “There’s been no accountability.”
Flounder (McPain), you can't spend your whole life worrying about your mistakes! You fucked up... you trusted us! Hey, make the best of it!
There is no fucking accountablilty. Now they lie about not knowing.
So, a year and a half later, he has this sudden understanding of things. Super!
Maybe I am more qualified than McCain to sit in Congress. Not only did I realize this about a month after TARP was passed, but I have been captive of the idiots like him in Congress for years. In fact, the torture regimen is getting worse by the day.
(Sorry this is a double post. I didn't realize I wasn't logged in before)
McCain is right, Paulson and Bernanke did mislead him, and the rest of Congress. But that does not absolve him of responsibility for his vote.
It was obvious that they were writing the Treasury a blank check (with our money). I know it was obvious, because I distinctly remember Rush talking about it at the time. The language allowed the Treasury to do whatever they felt necessary (that's almost verbatim).
With that kind of authority, a little more due diligence was in order. McCain, as the presidential nominee (shudder) should have taken the lead in asking tough questions. Instead, he folded.
McCain is right, Paulson and Bernanke did mislead him, and the rest of Congress. But that does not absolve him of responsibility for his vote.
It was obvious that they were writing the Treasury a blank check (with our money). I know it was obvious, because I distinctly remember Rush talking about it at the time. The language allowed the Treasury to do whatever they felt necessary (that's almost verbatim).
With that kind of authority, a little more due diligence was in order. McCain, as the presidential nominee (shudder) should have taken the lead in asking tough questions. Instead, he folded.
McCain is mislead by Everything! WMD in Iraq...
It'll be nice when all these old windbags are finally tossed on to their butts on the streets.
Got this from Matt Taibbi's website.
"...“we should have gone Swedish on their asses.” The Swedes after a similar bubble burst in 1992 temporarily seized control of insolvent institutions, forced banks to write down losses before they got aid, and gave taxpayers a huge share in the upside of recovery. It was a tough-love approach that really worked and forcefully addressed the moral hazard issue in a way we never touched."
http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html
+1, if nothing else at least it would have been entertaining.
First off, I don't believe John McCain for one second. He has gotten religion after realizing how pissed off the American people are about this. He misjudged the situation but he knew exactly what he was doing. TARP was NEVER going to be aid to homeowners.
Second, Paulson said whatever needed to be said to get the legislation passed. Whether he did it as part of a power grab or whether he felt the economy was about to collapse (Read: GS could go under) will be the subject of conjecture for years to come.
Third, "gone Swedish" on their asses OR we should have taken the 700 Billion and capitalized 10 new banks and setup a process to wind down the operations of the others. The stock of these new banks would have been spun off to the public (give the shares away) once the smoke cleared. Leverage limits would be strictly enforced at 10:1 and prop trading banned. That is the business of Investment Banks.
That's a great point. If the government puts up the money (which shouldn't happen anyway, but take it as given), then the repayment shouldn't go back to the government. The shares should be given to the people as Czech Republic did during their privatization.
I guess you could argue the shares should go to taxpayers instead of all, or perhaps taxpayers in proportion to the taxes paid, but any share distribution would be better than it going into Goldman, JPM, etc. pockets or worse, back to Congress to spend.
The title says it all, but the article is worth reading:
http://www.rollingstone.com/news/coverstory/make_believe_maverick_the_real_john_mccain -------------- Make-Believe Maverick A closer look at the life and career of John McCain reveals a disturbing record of recklessness and dishonestyBy TIM DICKINSONPosted Oct 16, 2008 7:00 PM
Gee, who else either didn't figure out they were being bait and swithced, and who else went along with everything, and, even worse, who eventually hijacked the balance of TARP for even for tangential items of self interest? Funny, even, that this particular person seems to even serially pass legislation for one purpose only to either then withhold the money entirely for his own purposes. Who could it be?
Clue: He's one of our black presidents.
Yeah, I wound up voting for McC, and I still think he would have been better than Obama. But McCain is an elitist, he is not working on behalf of the little people, that's for sure.
Something else to take away from Paulson's perfidy- he knows the game is over and is into capital preservation.Having recovered most of my losses thanks to the Fed's liquidity machinations, I'm out the markets and hunkering down for the fallout.
McCain = Fail.
Agreed, McCain is just contradicting himself for political cover...he could have won the US election by saying no to TARP...but he didn't because he couldn't say no to his masters...that's saying something, because McCain really really wanted to be Prez..
And really, how hard is it to push around the idiots in Congress, except for a few sharp ones like Ron Paul, Grayson etc...they can be manipulated easily, especially when you are their primary source of cash. God only knows what Paulson said, something like your health insurance program will be insolvent if you don't hand over the blood sweat and tears of generations of Americans would have been enough.
McCain is numbskull.
Just wish when he retires, all he gets is his military pension. What a douche.
McCain is running for reelection and will therefore say whatever is necessary to blind the citizens of Arizona to his own duplicity in creating the greatest transference of wealth in world history. A transfer that directly benefited him and his families business and personal holdings at the expense of the citizens of Arizona and indeed the whole of America. The very definition of a UEC.
Anybody that has been in the game as long as he has knows whats going on and knew what they were intending. He is just trying to play the game. Golly Gee I was duped again.
i don't think mc cain worked that out for himself. he is just politicaly 'tapping in' to what the american public have deduced for themselves. would'nt trust that man- too dumb.
Anyone crazy and wreckless enough to put PALIN one hearbeat away from the Presidency should be either jailed or put in a Mental asylum for life--
McCain lost ALL respect the moment he turned politics into the Jerry Springer show--- I cant ever look at the man the same again.
You're exactly right and the Tea Party needs to boot her a$$ out too!
I propose that the Tea Party does not exist. It is all a psy-op pressure release valve - there are grass roots involved, but they are no match for the intentional over-fertilization of fascist interests (corporations & gov't).
It is another way to control, and to appease. And the mainstream media (corporate power) is marginalizing the "racist tea-baggers" in relentless fashion. Sarah Palin resigns, "writes" a book Going Rogue, and suddenly is their dear mascot. WTF! And she is telling this amorphous group of simply-pissed-off Americans that they are going to have to behave and join the Repubs unless they want to see the Dems get more power.
The Tea Party does not exist.
Russia used mythical political parties during the trials and purges. Old tricks, with fresh faces. When Americans get really angry, enough that they will refuse to give their consent to be governed, and boycott the status quo political process altogether, we will get to see all the new military toys to crush those that were not already rounded up using illegal data mining and surveillance. Illegal. Do not consent to obey.
And completely co-opted. McCain is gonna try to "tea party" just enough to hold on to his bought-and-paid-for seat.
Digressing a bit, it appears that non-US media has a better handle on what's going on in the US:
http://english.pravda.ru/opinion/columnists/107459-0/