Mo Dowd's Column Today...
 

Even if you are not a big fan of Mo Dowd, (I am), she is a helluva
writer and this is worth the 3 minute read. I think she sums up
the banking/bailout bs, thus far, quite well.
BR,mD

I was going to paste this in the Lounge but I didn't want to infringe
on any of the "no politics forum" readers...:rolleyes:
BR,mD

Op-Ed Columnist
Trillion Dollar Baby

MAUREEN DOWD
Published: February 10, 2009
WASHINGTON
http://graphics8.nytimes.com/images/...owd-ts-190.jpg
Maureen Dowd



So much for the savior-based economy.

Tim Geithner, the learned and laconic civil servant and financial engineer, did not sweep in and infuse our shaky psyches with confidence. For starters, the 47-year-old’s voice kept cracking.

Escorting us over the rickety, foggy bridge from TARP to Son of TARP by way of TALF — don’t ask — Geithner did not, as the president said when he drew on the wisdom of Fred Astaire, inspire us to pick ourselves up, dust ourselves off and start all over again.

The Obama crowd is hung up on the same issues that the Bush crew was hung up on last September: Which of the potentially $2 or $3 trillion in toxic assets will the taxpayers buy and what will we pay for them?

Despite the touting, the Treasury chief unveiled a plan short on illumination, recrimination, fine points and foreclosure closure. The Dow collapsed on its fainting couch as Sports Illustrated swimsuit models rang the closing bell.

It wasn’t only that Geithner’s own tax history — and his time as head of the New York Fed when all the bad stuff was happening on Wall Street, and when he left with nearly a half-million in severance — makes him a dubious messenger for the president’s pledge to keep the haves from further betraying the have-nots.

It wasn’t only that Americans’ already threadbare trust has been ripped by Hank Paulson’s mumbo-jumbo and the Democrats’ bad judgment in accessorizing the stimulus bill with Grammy-level “bling, bling,” as the R.N.C. chairman, Michael Steele, called it.

The problem is that the “lost faith” that Geithner talked about in his announcement Tuesday cannot be restored as long as the taxpayers who are funding these wayward banks don’t have more control.

Geithner is not even requiring the banks to lend in return for the $2 trillion his program will try to marshal, mostly by having the Fed print money out of thin air, thereby diluting our money, or borrowing more from China. (When, exactly, can China foreclose on us and start sending us toxic toys again?)

There’s a weaselly feel to the plan, a sense that tough decisions were postponed even as President Obama warns about our “perfect storm of financial problems.” The outrage is going only one way, as we pony up trillion after trillion.

Geithner is coddling the banks, setting it up so that either we’ll have to pay the banks inflated prices for poison assets or subsidize investors to pay the banks for poison assets.

As Steve Labaton and Ed Andrews wrote in The Times on Tuesday, Geithner won an internal battle with David Axelrod and other Obama aides who wanted to impose pay caps on every employee at institutions taking the bailout and set stricter guidelines on how federal money is spent.

Geithner prevailed over those who wanted to kick out negligent bank executives and wipe out shareholders at institutions receiving aid.

In a move that would have made his mentor, Robert Rubin, proud, Geithner beat back the populists and protected the economic royalists. The new plan offers insufficient meddling with Wall Street, even though Wall Street shows no sign that the hardscrabble economy has pierced its Hermès-swathed world.

Wells Fargo, for instance, which has leeched $25 billion in bailout money, bought an inadvertently hilarious full-page ad in The Times to whinge about the junkets to Las Vegas and elsewhere it was forced to cancel because of public outrage. (The ad in The Times on Sunday could have cost up to $200,000, which may count as a bailout for our industry.)

“Okay, time out. Something doesn’t feel right,” John Stumpf, the president and chief executive of Wells Fargo wrote in an open letter defending their two decades of four-day employee recognition “events.” Calling them junkets or boondoggles is “nonsense,” he protested, adding about his employees: “This recognition energizes them.”

In this economy, simply having a job should energize them.

Geithner is wrong. The pay of all the employees in bailed-out banks, not just top executives, should be capped. And these impervious, imperial suits who squander taxpayers’ money after dragging the country over the cliff should all be fired — preferably when they come to D.C. on Wednesday in a phony show of populism on Amtrak and the shuttle to testify before Barney Frank.

Wall Street cannot be trusted to change its culture. Just look at the full-page ads that Bank of America (which got $45 billion) and Citigroup (which got $50 billion) are plastering in newspapers, lavishing taxpayer money on preening prose.

We don’t want our money spent, as Citigroup did, to pat itself on the back “as we navigate the complexities together.” Bank of America cannot get back our trust by spending more of our cash to assure us that it’s “getting to work” on getting back our trust.

Just get back to work and start repaying us.


http://www.nytimes.com/2009/02/11/op...ef=todayspaper

I'm a huge fan of Maureen Dowd, but she -- as most members of the media -- is simply misinformed.

- Wells Fargo did not ask, nor did they NEED the $25 Billion. Hank Paulson made them (and BofA, and others -- whether they needed it or not) take the money. They had no choice. They were locked up in a situation room in the White House, and they were all told they had to agree to the government's terms. (By the way, BofA did not need the money, either. They were "asked" by Uncle Sam to buy Merril Lynch, with the government's money.)

- The bailout money the banks received is not a gift. In return for the money, the Federal government received millions of preferred stock. In the long run, the government will make money off dividends and interest.

- As a preferred stock owner, the government already received a $375 million dividend from Wells Fargo. (Funny how no one has reported this, by the way.)

- The Vegas trip is not a luxury fringe benefit for high-level executives. The yearly trips (a Wells tradition) are indeed rewards for their top performers. This includes not only sales reps, but also processors, underwriters, and even executive administrative staff. Many of these folks could never afford such a trip, and look forward to it. And make no mistake about it, they've EARNED it... not to mention that these are the people who bring in business! Without sales and its supporting cast, you have no business. Whatever they spend on these yearly trips is more than made up for with the money these people bring in.

- Why pay CEOs so much? It's a simple matter of supply and demand. There simply aren't enough people around who could do these jobs. I know we all think we can do their jobs... but if we had shown that, we'd be in that corner office already. Furthermore, these people put in decades of dedication to their companies. What they bring IN to the company is (in most cases) worth a LOT more than what the company gives them. Jack Welch took a beating when he left GE for his retirement package. Yet, he took a $5 billion appliance maker and made it a $280 billion multi-national conglomerate.

Why does A-Rod get 25 mil a year? 'Cause there aren't many people in this world who can do what he does. And because despite the $275 million the Yankess will dish out, they will make a profit in ticket sales and merchandising, and advertising. (Please spare me the steroids argument. I'd like to know if ANY of us could hit 318 with 121 RBIs -- with or without steroids.)

Here is another point I'd like to make: Who forced us to buy houses we could not afford and run up our credit card debts? Sure, the banks made it easier for us to get those loans (because we wanted them)... but, why aren't WE (the consumer) taking ANY responsibility in any of this. We refuse to save; we spend more than we make; and we buy houses we cannot afford. When the whole thing comes crashing, we cry fowl and blame the banks! We are at least as responsible as they are for this mess. Isn't it like us to blame others, but not take responsibility for our actions?

"Idiot bankers in Wall Street," is what I heard one congressman refer to them as. How about "Idiot consumers"? Funny how none of us had any issues at all with the banks when things were going well. Suddenly, they are now evil, evil people.

Give me a fucking break...!

OK, I'm done. Carry on. :)