Over the past decade, Fannie Mae and Freddie Mac transformed themselves into some of the worst-run companies in recent history. But contrary to current talking points, the firms' failings had almost nothing to do with their programs for low-income borrowers. As policymakers debate what should be done with the mortgage giants, a battle is now beginning in which the very availability of affordable housing for the middle class may be at stake.
While the national economy struggles under the weight of a massive bank bailout effort, the banking lobby's ability to influence public policy is more problematic than ever. The too-big-to-fail bankers may be dependent on U.S. taxpayers for their survival, but corporate lobbyists still have members of Congress, the Treasury Department and the Federal Reserve asking the banks' permission to bring the Big Finance behemoths under control. The relationship between Wall Street and the government is so out of whack that it's difficult to distinguish the political players from the panhandlers.
The details of AIG's bonuses are pretty appalling: 73 employees took home at least $1 million, while one person got a whopping $6.4 million. What's more, NY Attorney General Andrew Cuomo proved AIG's excuse about needing these "retention" bonuses to keep employees at its Financial Products subsidiary was (believe it or not) complete and utter bullshit, since 11 of these bonus recipients have since left the company.
Now, Congress can try to rectify this situation by putting a 100% surtax on these bonuses. They can impose stricter limitations on the subsequent $30 billion bailout for AIG--if you can believe AIG is even getting another bailout! Still, this news is too infuriating to just sit back and wait for Congress to check Wall Street's ridiculous hubris.
This Thursday, March 19, SEIU and a slew of other organizations will be holding demonstrations at bailed-out banks and corporations in over 100 cities across the country, demanding fiscal repsonsibility. Sign up at TakeBacktheEconomy.org and join a demonstration in your community for a national day of protest. No more sitting around yelling at the TV screen when Obama's Press Secretary pretends like we should have any sort of confidence whatsoever in Geithner as Treasury Secretary. Enough is enough, it's time to take back the economy!
Every morning lately, we have turned anxiously to the news to see if financial markets are in freefall...and some days, they actually are.
Governments across the world have responded over the past two weeks--including a massive commitment by the United States Treasury that is, to say the least, highly controversial to the American voter.
As this is being written markets are opening in Asia. At the moment things are somewhat stable, and except for Shanghai and Taiwan, they're heading upward. During the writing process, Europe has opened, and there are gains there today as well.
The US credit markets did not open today (although the stock markets did) because of the Columbus Day holiday-but anyone who recalls Mr. Dow's Wild Ride last Friday is quite nervous ahead of the Tuesday opening.
Despite all that bailout stuff we're hearing about, confidence doesn't seem to be returning to the markets. Why?
Excellent question, Gentle Reader, and I have a few helpful answers.
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