From the New TMQ article on ESPN.com

Bankers and Wall Street Are Robbing You Blind, Yet Congress Does Nothing: I still can't understand how AIG, beneficiary of $152 billion in federal subsidies and loan guarantees, could get away with giving management $400 million in year-end bonuses for a year in which management did one of the worst jobs in financial history. That money was forcibly removed from your pocket and placed into the pockets of incompetent scoundrels -- yet Congress does nothing! Now it turns out federally subsidized Merrill Lynch, the Bank of America subsidiary given $20 billion of your money two weeks ago, lost $15.3 billion in the fourth quarter of 2008, and yet handed its senior managers $4 billion in bonuses. Four billion, not million, forcibly removed from your pocket -- or borrowed, with the bill handed to your children -- and put into the pockets of scoundrels who did a terrible, horrible, awful job. Merrill Lynch managers must be laughing out loud: They screwed up in a major way, and for screwing up were lavishly rewarded, while blameless federal taxpayers were punished. Why isn't our Democratic-led, supposedly populist Congress incensed about such abuses?

Unfortunately, I do understand -- because Congress is to blame for the abuses. Congress enacted October's $700 billion bailout of banks and Wall Street without including fraud provisions. At the moment of maximum leverage with banks and Wall Street, Congress simply handed over vast sums of your money without getting any accountability concessions in return. If a Pentagon contractor abuses federal money, if the vendor who supplies staplers and paper clips to the National Operational Hydrologic Remote Sensing Center abuses federal money, federal prosecutors move in, because contracts issued by federal agencies have fraud clauses. The October deal by which Congress handed over hundreds of billions of dollars to banks and Wall Street doesn't contain fraud clauses!

The AIG and Merrill Lynch top dogs may be despicable, but it's legal for them to stuff your money into their pockets as bonuses. As Michael Kinsley once said, "The real scandal is what's legal." That billions of the $700 billion bailout fund are being looted directly in front of our eyes is legal, owing to the carelessness of Congress.

Gordon Gecko

20th Century Fox

Compared to the people running AIG, Lehman Brothers and Merrill Lynch, Gordon Gecko was a paragon of fiduciary responsibility.

So why isn't Congress in emergency session to amend the bailout law to allow prosecution for fraud or misappropriation of federal funds? Much of the $700 billion still is being handed out; with every day that passes, more of your money is transferred to Wall Street and banking-industry con artists without necessary legal protections. If bankers and Gordon Gecko knew they could be prosecuted for awarding themselves bonuses taken from public money, this behavior instantly would stop. In October it was a huge blunder for Congress to start handing out hundreds of billions of dollars without accountability clauses, but at least repetition of this blunder can be stopped now -- if Congress would act. That Congress does not act, but continues to give away your money without fraud protection, indicates members of Congress, Republican and Democrat alike, simply do not care how much of your money they waste. Many members of Congress only care about personal power and campaign donations. Giving away your money to people who are already rich helps members of Congress maintain personal power and assure themselves campaign donations. If Barack Obama is to be a successful president, he must realize fast that the Congress is the source of the fiscal "anything goes" problem he had decried.

Supposedly Wall Street and bank bonuses must be paid in order to keep top people from leaving Wall Street and banks. We want the top people to leave! They, after all, are the ones who melted down the financial markets; the avalanche of losses at Bear Stearns, Lehman Brothers, Merrill, Washington Mutual and other institutions was not caused by the Klingons.Here is a fine article by Michael Lewis on how Wall Street insiders couldn't possibly care less how much of their clients' money they lose, so long as they can manipulate the system to get bonuses. Reckless borrowing and too-small cash reserves set up banks and investment banks for a crash, but created short-term numbers that allowed managers to award themselves giant bonus checks. At least the monies invested and lost with Wall Street brokers were monies freely given. Since the bailout began in October, Wall Street managers and bankers have had access to a far larger pool of cash -- the federal Treasury -- to loot. That's exactly what they are doing, and Congress stands by.

Shortly after Barack Obama was sworn in, he complained of "lack of accountability" in federal handouts to banks and Wall Street. You're in charge now, do something about it! The lack of accountability did not pop out of a rift in the space-time continuum -- the problem is the direct result of carelessness by Congress. Fix the problem! Amend the legislation!

AddThis Social Bookmark Button

blog comments powered by Disqus