Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone) | TigerDroppings.com

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DeltaDoc
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Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)



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quote:

It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you'd think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we've been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.


quote:

But the most appalling part is the lying. The public has been lied to so shamelessly and so often in the course of the past four years that the failure to tell the truth to the general populace has become a kind of baked-in, official feature of the financial rescue. Money wasn't the only thing the government gave Wall Street – it also conferred the right to hide the truth from the rest of us. And it was all done in the name of helping regular people and creating jobs. "It is," says former bailout Inspector General Neil Barofsky, "the ultimate bait-and-switch."


This is coming from an Obama supporter.

quote:

Congress was furious. "We've been lied to," fumed Rep. David Scott, a Democrat from Georgia. Rep. Elijah Cummings, a Democrat from Maryland, raged at transparently douchey TARP administrator (and Goldman banker) Neel Kashkari, calling him a "chump" for the banks. And the anger was bipartisan: Republican senators David Vitter of Louisiana and James Inhofe of Oklahoma were so mad about the unilateral changes and lack of oversight that they sponsored a bill in January 2009 to cancel the remaining $350 billion of TARP.

So what did bailout officials do? They put together a proposal full of even bigger deceptions to get it past Congress a second time. That process began almost exactly four years ago – on January 12th and 15th, 2009 – when Larry Summers, the senior economic adviser to President-elect Barack Obama, sent a pair of letters to Congress. The pudgy, stubby­fingered former World Bank economist, who had been forced out as Harvard president for suggesting that women lack a natural aptitude for math and science, begged legislators to reject Vitter's bill and leave TARP alone.


quote:

The failure of HAMP underscores another damning truth – that the Bush-Obama bailout was as purely bipartisan a program as we've had. Imagine Obama retaining Don Rumsfeld as defense secretary and still digging for WMDs in the Iraqi desert four years after his election: That's what it was like when he left Tim Geithner, one of the chief architects of Bush's bailout, in command of the no-strings­attached rescue four years after Bush left office.


quote:

Through behavior like this, the government has turned the entire financial system into a kind of vast confidence game – a Ponzi-like scam in which the value of just about everything in the system is inflated because of the widespread belief that the government will step in to prevent losses. Clearly, a government that's already in debt over its eyes for the next million years does not have enough capital on hand to rescue every Citigroup or Regions Bank in the land should they all go bust tomorrow. But the market is behaving as if Daddy will step in to once again pay the rent the next time any or all of these kids sets the couch on fire and skips out on his security deposit. Just like an actual Ponzi scheme, it works only as long as they don't have to make good on all the promises they've made. They're building an economy based not on real accounting and real numbers, but on belief. And while the signs of growth and recovery in this new faith-based economy may be fake, one aspect of the bailout has been consistently concrete: the broken promises over executive pay.


quote:

This is a virtual repeat of the financial crisis, in which a wave of greed caused bankers to recklessly chase yield everywhere, to the point where lowering lending standards became the norm. Now the government, with its Implicit Guarantee, is causing exactly the same behavior – meaning the bailouts have brought us right back to where we started. "Government intervention," says Klaus Schaeck, an expert on bailouts who has served as a World Bank consultant, "has definitely resulted in increased risk."

And while the economy still mostly sucks overall, there's never been a better time to be a Too Big to Fail bank. Wells Fargo reported a third-quarter profit of nearly $5 billion last year, while JP Morgan Chase pocketed $5.3 billion – roughly double what both banks earned in the third quarter of 2006, at the height of the mortgage bubble. As the driver of their success, both banks cite strong performance in – you guessed it – the mortgage market.


Hhhmmmmm...I remember a few people on her stating that government intervention would end badly.

quote:

So what exactly did the bailout accomplish? It built a banking system that discriminates against community banks, makes Too Big to Fail banks even Too Bigger to Failier, increases risk, discourages sound business lending and punishes savings by making it even easier and more profitable to chase high-yield investments than to compete for small depositors. The bailout has also made lying on behalf of our biggest and most corrupt banks the official policy of the United States government. And if any one of those banks fails, it will cause another financial crisis, meaning we're essentially wedded to that policy for the rest of eternity – or at least until the markets call our bluff, which could happen any minute now.

Other than that, the bailout was a smashing success.














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LSURussian
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


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Not only did it prevent another Great Depression, we've been told, but the money has all been paid back, and the government even made a profit.


I have never seen anyone claim all of the TARP money has been paid back, so I stopped reading there.






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Tiguar
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


Geez, another racist lunatic on the wrong side of history.





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Jimbeaux
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


quote:

I have never seen anyone claim all of the TARP money has been paid back, so I stopped reading there.


You should read the rest.






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GumboPot
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


However you do see headlines every now and then of individual banks paying TARP back. I guess that's a reading comprehension problem or a projection (that just because some banks have paid their TARP back that every bank has paid their TARP back) by Taibbi. I think I read somewhere that GMAC hasn't paid their TARP back yet?





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DeltaDoc
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


If you read nothing else:

quote:

"Government intervention," says Klaus Schaeck, an expert on bailouts who has served as a World Bank consultant, "has definitely resulted in increased risk."






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ironsides
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


quote:

However you do see headlines every now and then of individual banks paying TARP back. I guess that's a reading comprehension problem or a projection (that just because some banks have paid their TARP back that every bank has paid their TARP back) by Taibbi.


There's a reason why experienced journalists make $70k a year and experienced bankers make $700k......






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PaddlingTiger
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


It doesn't do this article justice to just read excerpts. The whole article is unbelievable.





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Porky
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


quote:

I have never seen anyone claim all of the TARP money has been paid back, so I stopped reading there.

Here's a thread from 2011:
LINK
Almost all of it anyway...








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LSURussian
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


quote:

Almost all of it anyway...

Nah, you missed an important point. "Almost of all the money disbursed to banks" has been repaid at a profit to taxpayers.

Banks were not the only recipients of TARP money. GM, Chrysler, FannieMae, FreddieMac and AIG got big chunks of it and much of that money has not been repaid.






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Porky
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re: Secrets & Lies Of The Bailout by Matt Taibbi (of Rollingstone)


quote:

Banks were not the only recipients of TARP money. GM, Chrysler, FannieMae, FreddieMac and AIG got big chunks of it and much of that money has not been repaid.

True. there's been all kinds of bailouts. Even Ben Bernanke has stated how most of the money was wasted on perks, etc. during his interview on 60 Minutes. Interesting interview!






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