They Just Don't Get It!

I was having coffee with a friend yesterday and managed to catch a few minutes of President Obama's bashing of the banks. He singled out financial institutions for causing much of the economic tailspin and criticized their opposition to tighter federal oversight of their industry.

"It was, as some have put it, risk management without the management," he said.

The president also told CBS' "60 Minutes" that "the people on Wall Street still don't get it. ... They're still puzzled why it is that people are mad at the banks. Well, let's see. You guys are drawing down $10, $20 million bonuses after America went through the worst economic year ... in decades and you guys caused the problem," Obama said in an excerpt released in advance of Sunday night's broadcast of his interview.

Upon returning home I received an e-mail from the New York Times saying that Wells Fargo was selling 10.4 billion dollars in new stock to repay the $25 billion TARP loan. Citigroup had just repaid $20 billion but still owes us more. Surely this was not just to get the president off their butts? And it isn't. They are still the Scrooges in this story. By repaying these loans from the American taxpayer the restrictions on the practice of obscene end of the year bonus is lifted. Be prepared to hear about how much their CEO's will be getting as Christmas Presidents. 

Everyone is getting into the Christmas spirit. Bank of America paid back $45 billion on December 9th. And they sidestep the President's stated objective of forcing borrowing banks to make more loans to small businesses and homeowners bottom up in their mortgages.


But my question is where did Wells Fargo get the $10.4 billion in stock? And where were they hiding the other $35 billion. Weren't they about to go belly up when we bailed them out? It is possible it was hidden the same place G.W. Bush's 22 million missing e-mails were. But we found those. During his eight years in office lots of controversial electronic mail on iffy decisions went missing. Key here is to know merely pressing the delete button obviously does not work. Consider that bank CEO's. Your real financial balance sheets can be found.

As a side issue I was Googling an image for this blog on banking and Monopoly seemed appropriate. Parker Bros still has that smiley and lovable banker despite current polls that put people of that ilk up in the most hated list. And I found this image for the electronic version of the time honored game we all loved to fight over. No more paper money to dole out. You can do it all with plastic. And you can begin training your  children to just swipe that credit card as the tender age of eight. Merry Christmas.

Isn't this a large part of how we got into this mess in the first place? Everyone was not playing with real money. And obviously still aren't. But the good news is Christmas spending is down 50% from last year, which was not a banner one, plastic or no plastic.

Seems Like Yesterday

Seems like just yesterday when the goose of government laid all those golden eggs for the financial institutions that got us to the brink of a greater depression than the Great Depression. In hind sight some economists have even battered around the term "total global economic collapse." But I was reminded by NPR this morning that it has only been a year.

At the time the Republican dominated congress approved the request of the Republican administration for $750 billion to bailout the people that brought us to the brink there was a lot of noise about a total make over of the financial system in the United States. The dream of GW and his cronies of a free market with no restrictions had failed.

Economists say the recession is over. Despite $750 billion being doled out with no records of where, and another like amount distributed with more care by the new Democratic administration the common man is yet to see the results of this back from the brinkmanship. It will be a long time before unemployment is no longer a concern. And we have yet to see one single piece of legislation dealing with regulation of those investment banks and insurance companies that brought us so low.

Now we are being warned that if an overhaul of our financial systems is not law by Christmas we may be in for an even bigger fall in our economy. The banks and financial institutions too big to fail are still too big. Nothing has been done to regulate their size or how they play with money on the global market place.

Congress is still debating the health insurance reform. Note insurance companies are involved with that like Lehman Brothers was involved with the financial collapse. So maybe Congress ought to be involved in the breakup of the big five insurance companies that handle all health insurance and are major players in the investment market. They are not the geese that laid the golden eggs. They are the geese that just laid eggs that almost brought us down. Nothing golden about them.

Rioting in the Streets

It is no fun when it is real. I remember the civil rights riots and those after the death of Martin Luther King. The last thing President Obama wants right now is to have to bring home the National Guard from Iraq early to quell riots in the streets. Fortunately he read the handwriting on the wall.

Obama Tells Geithner to Block A.I.G. Bonuses

President Obama has instructed the Treasury secretary to try to stop the faltering insurance giant American International Group from paying out hundreds of millions of dollars in bonuses to executives, as the administration scrambled to
avert a populist backlash against banks and Wall Street that could complicate Mr. Obama's economic recovery agenda.

Complicate at the very least. If I was not angry enough at the bonuses the list of banks AIG gave bailout money to - mostly foreign banks - really got my dander up. And then Cheney has the gull to go on air and say the financial crisis was not caused by GW and his administration. Give me a break. They had it last. It was under their watch. They took off all the regulations and let the CEO's run rampant. And then they doled out our money in TARP funds with absolutely no strings attached.

Off with their heads!

There has to be a special place in Hell

After posting earlier my blog about how the recession was effecting my life on just the little things I was shocked to get the following news alert from the New York Times:

A.I.G. to Pay $100 Million in Bonuses After Huge Bailout

Despite being bailed out with more than $170 billion from the Treasury and Federal Reserve, the American International Group is preparing to pay about $100 million in bonuses to executives in the same business unit that brought the company to the brink of collapse last year.

We, the citizens of the United States, gave these leaders in our economic destruction $170 billion of our hard earned tax dollars (when we still had money to be earned). And they are giving $100 million in bonuses to them? We are living on the bare minimum and thousands are in tent cities and foreclosure and they have the gull to accept huge sums of money?

I am reminded of the French Revolution and I say as they said: Off with their heads!

Most of the People only Some of the Time

My father was fond of saying that you can please a few people all the time, and some people some of the time and none of the people all of the time. This week has certainly brought home that to President Obama and the American People.

I have been following as best I can the criticisms of the Economic Stimulus package as it makes its way through the shark infested pools that are the United States Senate. Clearly everyone has a different idea as to what stimulus is and how to create it.

An economist friend of mine once said you could put three economists in a room and come up with no fewer than five opinions on anyone economic issue. I really see that now.

I am not an economist by any means but I am a broke American trying to hold on in stormy seas and the best solution I heard to this whole mess was to not put it all in one package but divide it into three or four parts. Still I can see that with the direness of the consequences in the world economy that the desire to do it all at once seemed imperative.

With the Senate moving toward a workable compromise our new President may get what he has asked for. He seems more than willing to work with everyone but I was pleased when he told the Republicans, "you caused this mess why can't you help fix it" or words to that effect. I doubt we will know really what works and what does not for a decade. We have not been here before. When the Great Depression happened the world was more separate; not so globally linked. I am sure that historians and economists will be debating this for the better part of the century. Let's hope that we at least learn something this time.

I've learned we should not have let GW Bush have his TARP funds. They have been misspent with no limitations and in some cases drastic over-payment resulting in no stimulus to the economy. I am sure we will be debating that for several decades too. GW was obviously trying to please just a few people all the time - like already rich CEO's and business owners.

I have my fingers crossed that this will work. That pleasing most of the people some of the time is all we need to do to get the ball rolling again. I do know it is democracy as it is suppose to work. GW, I think history will find, ran a dictatorship.

What don't they get?

I just was catching up on some of the news of the last week and discovered that all those bailed out financial/investment corporations are still giving excessive bonuses to their executives that have failed in keeping the companies solvent. And Citibank, that credit card company you love to hate, is going to buy a new $42 million corporate jet.

How many people did they kick out of their homes for this? And how many Citibank Credit Card holders are now paying 26% interest and $35 late fees? Or better yet, how much of my taxpayer money is funding this joy ride?

This new toy of the CEO's carries only 12 passengers and a crew. Twelve! And just where do they travel on this gold plated luxury ride? Isn't this the day of the Internet? Conference calls? Live video streaming that allows you to hold a meeting with nobody leaving their conference rooms?

And shouldn't Citibank and all these "on the brink of failing" companies be cutting back on expenses and frills and bonuses like us middle class (rapidly becoming lower class) members?

I am sorry you managed your companies so very poorly but in true capitalism you should be allowed to fail. I say take the remaining TARP funds and open a government bank to provide loans to people getting foreclosed on or in bankruptcy themselves. No more for banks and investment companies. Zero. Zip. Nada.

They just don't get it. Literally!

Write your congressmen and President Obama Today.

Seventeen More Days But Who's Counting

Sometimes when you Google an image you get pleasant surprises like this electronic abacus designed in 1990. Cool, huh?

The sentence above is probably a good indication of just how interesting political news has been of late. It seems all about accounting. A million dollar bailout there and a million dollar bailout here and pretty soon you are talking about real money. Now the state governors want $1 trillion. Poor Christmas sales make poor sales tax and the retail companies are asking for relief from the sales tax they have to pay. The trickle down theory of economics at its worst.

President elect (we can only have one president at a time) Obama is going to be on Capital Hill this coming Monday to talk to Congressional leaders about a stimulus package to get the economy going. He would like to sign it on day one of his presidency - January 20th. And the Republican opposition is already lining up.
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"We agree with President-elect Obama that taking action to turn the economy around is job one. We also agree, though, that every dollar needs to be spent wisely and not wasted in the rush to get it spent," McConnell (R-Ky) said. "And we hope that Democrats in Congress don't attempt to shut the American taxpayer out of this process by trying to pass a bill that hasn't been the subject of bipartisan review and that hasn't been available for public inspection."
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And TARP, the troubled asset relief program pushed through the congress by the Republicans and GW. is spending money wisely and not wasting it? And we got an opportunity for public inspection of the bill? And it was subject to a considered bipartisan review? I think NOT.

Why is it the other party always demands that the opposition not make the same mistakes they are making? And does it in a way that sounds like they didn't make any?
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"Let's be clear," said Boehner (R-Ohio), "it is essential that this legislation be debated in a fair, open, and honest way. Congress should have public hearings in the appropriate committees, the text of the measure should be made available online for the American people to review for at least one week, and it should be free from special-interest earmarks."
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Duh? This stimulus package is all about earmarks. It is about building bridges and restoring our interstate highway system. It is about putting people back to work after all the huge outsourcing of industry to China. This is about trickle up economics. Put Americans back to work rebuilding American (not Iraq) and then we spend money at retail stores and car dealerships. They pay sales tax and the states don't need a bailout.

I vote we take any remaining TARP funds after the Republicans have rewarded all their buddies for tanking the economy and throw it in this stimulus package as well.

Seventeen days and counting.