Recently, House Speaker Nancy Pelosi was heckled by members of ADAPT, a disability rights group, as she addressed a progressive audience this past Tuesday. According to the Politico ADAPT, and other groups, heckled Pelosi for about 20 minutes. As Pelosi wrapped up her speech she, again, accused the ills of the United States economy on the Bush administration. When does the blaming of a prior administration end? Did Pelosi forget that in Bush's final two years the Democrats controlled both chambers of Congress? I understand the blame game is part of politics and is an attempt to keep Americans polarized too.
The most troubling part of her speech was the words she had for Wall Street. "No longer will recklessness on Wall Street be able to cause joblessness on Main Street. No longer will those on Wall Street be able to privatize the gain and nationalize the risk" (http://www.politico.com/news/stories/0610/38249.html). WHAT?!?!?! How can Wall Street nationalize the risk? It is Congress that passed the bailouts and not Wall Street. One can make an argument that lobbyist for Wall Street influenced the process but the lobbyist nor Wall Street actually cast a vote or sign on the dotted line. Granted TARP was signed by Bush but it was passed by Pelosi/Reed led Congress. Our current politicians failed America by nationalizing the risk that Wall Street takes.
The dotcom bubble was not nationalized yet Congress chooses to nationalize the housing bubble; why is that? Did the dotcom's not give enough money to Congress? There is nothing wrong with Wall Street in privatizing gains. Remember the increased profits and stock appreciation of Wall Street fuels our 401K's, IRA's and our nest eggs. I do agree with Speaker Pelosi that we cannot nationalize the risk but be honest as to who is nationalizing the risk. It is Congress that is nationalizing risk and the President rubber stamps it.
The dotcom bubble was estimated at 1 trillion in losses worldwide when it burst. The housing bubble has been estimated at between 16T and 28T in losses worldwide. The entire worlds GDP is 61.1T as of 2008. That's a difference of 1.6% of GDP vs. 36.1% of GDP (22T estimated value).
ReplyDeleteIf that doesn't explain to you why they were handled differently then nothing will.
And I find it ironic that when Obama does something, you hold him personally responsible regardless of congressional actions. But while Bush was in office, you hold congress accountable, even though the entire TARP bailouts were negotiated by Bernake/Paulson. That doesn't seem to support your claim of impartiality does it?
http://www.politico.com/news/stories/0610/38348.html
ReplyDeleteGood article that holds Bush/Paulson's feet to the fire over AIG. Or is this Obama's fault too Chris?
Kevin
ReplyDeleteI agree that the dotcom bubble had a difference in impact on the GDP. The extent to which I hold Obama personally liable versus Congress is when he signs into law what Congress is sending him. If he really disagrees with any aspect of the legislation then veto it. Just as Bush should have veto'd TARP.
Where I hold Congress accountable is in regards to Pelosi's comment that Wall Street is expecting that the Government will "nationalize the risk". The passing of TARP or any other bailout bill can only be done by Congress and signed into law by the President not Wall Street.
I do like the article you posted as well. What was done with TARP goes on Democrats in Congress, which Obama was part of, President Bush and Paulson. Now, Obama's willingness to expand TARP to other industries is on him. Obama should not allow TARP to be expanded.
BTW...found it interesting that no one commented on the positive obama post...
ReplyDeleteViper, you honestly believe that Pelosi was referring to TARP, the bank bailout and the auto bailout when she talked about nationalizing risk? You seem to have forgotten about the deregulation of the banking and finance industries. Yes, Congress would have played a part in that, but what party? What President? The nationalization of risk to which she is referring is the risks that Wall Street took leading up to the great recession. It was only then that Congress was put in the uncomfortable position of having to bail out Wall Street. I'm sure you see this as a prime example of reaping what you sow, but let's be clear, it's not as if Wall Street is without blame or were against receiving billions in taxpayer dollars. You give these people way too much credit and assume that they have such strong moral groundings. Either you're one of them (which you're not), or you're ignorant enough to buy into their rhetoric. Oh wait, what's the name of your new business?
ReplyDeleteTo get an idea of how remorseful a wealthy Wall Streeter can be, check out this article: http://nymag.com/news/crimelaw/66468/
Anon
ReplyDeleteI heard that Madoff was not feeling remorseful for scamming the wealthy investors he did.
Our current owes started with the repeal of Glass Steagall that was signed into law by President Clinton. Granted Republicans had control of the Senate at the time but the bill passed, after conference committee, by a 90-8 vote.
Flash forward to 2008 when a Democrat controlled Congress passed TARP and was signed in by a Republican President. The establishment of TARP was Congress and the President set the "nationalization of risk" not Wall Street. There is not one reason why any taxpayer dollars should go to help Goldman Sachs, AIG, Citigroup, GM or any private company in America.
As for my business, you will not find the company I work for in the headlines because we do not deal with derivatives, junk bonds or penny stocks; rather we choose to deal with companies with strong ethics, moral compass, solid management and a proven track record of being responsible.
You are correct that Wall Street took risks but they were calculated because Freddie Mac/Fannie Mae were there to absorb the toxic assets. We do need reform in the financial markets and it needs to start with the Government. Eliminate TARP, Freddie Mac/Fannie Mae and any other government backed bailout programs.
How is Pelosi not referring to TARP, the bank bailout and auto bailiout when she complains that Wall Street was risk "nationalized"?