$700 Billion? Not Even Close. Try $7.7 TRILLION
Executives at major American corporations line up for government relief. Of course, that isn't soup they're serving. It's $7.7 trillion in public money.
Remember all the sturm and drang over the $700 billion bailout bill a few months back? When politicians squabbled and dithered and banged their gavels for weeks on end and issued stern talking-to after stern talking-to about safeguarding taxpayer funds to economic regulators quivering in their loafers? Turns out that was all just penny-ante stuff.
The real cost of the bailout? Try $7.76 trillion. More than half of the entire country’s GDP last year. And our elected representatives in Congress apparently have no role in spending any of it. What was that whole thing about taxation and representation? You know, the thing we fought that war over against those funny looking guys in the bright red jackets? Oh never mind.
From Bloomberg News:
When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.
“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”
The latest beggar queuing up in the corporate soup line is mega-bank Citigroup. From today’s NY Times:
Federal regulators announced late Sunday night that the government had approved a radical plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank.
A plan to have the taxpayers “soak up billions” in bad bets, foolish choices, and criminally incompetent decisions. What’s “radical” about that? We do it every year. It’s called the federal budget. We’re already close to $11 trillion, and counting, in hock to the Chinese, the Japanese, and the Saudis because of our government’s stupidity, why not tack on a couple trillion more for our corporate stupidity while we’re at it?
Just how much cash are we talking about? A lot.
The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.
If you think President-elect Obama is going to staunch this seemingly endless emesis of public money into private coffers, you might not want to put away the bedpans quite yet. As we posted on the other day, he’s taking economic advice from none other than Robert Rubin. After he left the Clinton White House, Rubin worked for, that’s right, Citigroup. He made a cool $150 million from the bank for … well, for ruining it, we guess. Not only that, he helped bring this whole crisis down around all of our ears by killing key Depression-era regulations back in his government days.
And who was Rubin’s chief accomplice in this deregulation crusade? Lawrence Summers, Obama’s new chief economic adviser.
Then there’s Obama’s Chief of Staff Rahm Emanuel. After he left the Clinton White House, he created “too big to fail” companies like Citigroup for a living by helping them convince government regulators to allow questionable (but oh-so-lucrative) mergers and acquisitions.
And let’s not forget which politician has taken more money from Wall Street than any of his peers. The new Mr. President himself.
In other words, meet the new team. Same as the old team.
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