The Real Reason Geithner Is Afraid of Elizabeth Warren
by John R. Talbott
I was impressed (again) with how anything could be completely corrupt. It's actually hard to do. Congress isn't completely corrupt ... see there's Dennis Kucinich ... and over there is Bernie Sanders ... see ... it's not completely corrupt.
But ... after reading: (Bold italics are mine. Just my little way of screaming.)
"... If you remember, Hank Paulson, the Treasury Secretary at the time, had announced that the $700 billion TARP funds would be used to buy toxic assets like bad mortgage loans from the commercial banks. But this never happened and now the amount of bad bank loans has increased in the trillions. Immediately after receiving authorization of the funding for TARP from Congress, Paulson reversed direction and decided to make direct equity investments in the banks rather than using the TARP funds to acquire their bad loans.
So where are the trillions of dollars of bad loans that the banks had on their books? They are still there. The Federal Reserve took possession temporarily of some of them as collateral for lending to the banks in an attempt to clean up the banks for their supposed" stress tests". But as of now, the trillions of dollars of underwater mortgages, CDO's and worthless credit default swaps are still on the banks books. Geithner is going to the familiar "bank in crisis" playbook and hoping that the banks can earn their way out of their solvency problems over time so the banks are continuing to slowly write off their problem loans but at a rate that will take years, if not decades, to clean up the problem."
So Paulson pulled a classic "Bait & Switch" ... The Banksters gave themselves zillions in bonuses ... and the tremendous load of steaming crap got shoveled under everybody's rug. Geithner's plan is to clean it all up a teaspoon at a time by allowing the banks to gouge us all with made up fees and penalties. This is an incredible plan.
"... The banks have made no secret as to where they will find this increase in cash flow. They intend to soak their small retail customers, their consumer and small business borrowers, their credit card holders and their small depositors with increased costs and fees and are continuing many of the bad mortgage practices that led to the crisis (ARM's, option pay deals, zero down payments, second mortgages, teaser rates, etc). American and Banking Market News reports this week that the rule changes in the financial reform bill may lead banks to start implementing fees that had essentially disappeared from the industry early in the new millennium, such as fees for not meeting minimum balance requirements on a checking account, or reinstituting fees for certain online banking transactions that are currently free or charging to receive a paper statement or to talk to a live teller as Bank of America's CEO has recently proposed."
Paulson put us on the hook to pay back the 700 billion, but the toxic crap is still on the bank's books. So we're going to be made to buy it again. Every time we are forced to pay extra for not keeping a minimal balance or by having the gall to walk into a bank and actually talk to a teller ... we're paying down on the bad bets these guys made when they were all drunk out of their minds gambling in The Big Casino.
The beauty part of the plan is we remain screwed into the ground while the banks continue to make obscene profits.
The only roadblock in Geithner's way is Elizabeth Warren.
" ... Warren's appointment wouldn't just be a setback, it would devastate Geithner's entire plan on how to deal with trillions of bad assets the banks still won't recognize as losers. That is why I think she is going to face enormous resistance, even inside of the administration. The next one to oppose Warren after Geithner will be Larry Summers for this very reason. Then they will see if they can get Bernanke and finally Obama on board. The pitch to Obama and Bernanke will not be personal, it will be the same phony argument that Paulson and Bernanke used to justify TARP to congress, they will say that if Warren is appointed the entire world of banking and finance as we know it will come to an end.
... Elizabeth Warren won't just protect consumers, her Oklahoma bred sense of honesty, fairness and decency just might reinvigorate and redirect a government and a banking industry that for too long has seen the average American taxpayer and the typical small consumer as the enemy to be taken advantage of at every turn.
... If you want to help make sure Elizabeth Warren is appointed to head the new consumer finance protection agency, please take a minute and sign this online petition that will be presented to the President and then use the accompanying email opportunity to invite your friends to do the same."
Sign the petition and see if 125,000 signatures have any impact at all on Barack Obama.
Back to Talbott's article:
" ... As to the other two potential nominees on Obama's short list for the position, Michael S.Barr is Geithner's boy currently working for him as an Assistant Secretary at Treasury. More importantly, he is Bob Rubin's boy, having served as Rubin's assistant in the Clinton administration. If you are Rubins' boy, you are the bank lobby's boy as this position of Rubin's boy was previously held by Summers and then Geithner. Eugene Kimmelman seems like a nice enough person who has no background in finance. If the banking lobby can't get their guy in, the next best thing is to get a completely clueless person in who is too afraid to act boldly given he couldn't tell a CDO from a CEO. He has been the top lobbyist for the Consumers Union, so he is pro-lobbying and as a positive comment, really understands how toasters and garage door openers work."
If Obama picks Elizabeth Warren then I'll take back everything bad I've ever said about him. Everything but the war criminal stuff. But if he picks Barr or Kimmelman ... then we'll know what it looks like when something's completely corrupt.
Visual aids like that are very educational. Ever toured a sewage treatment plant? Like that.
(This didn't start out to be "A Moment." I read Talbott's article ... Became Furious ... clicked over to CREDO to sign the petition ... and wondered if online petitions have ever done any good. )
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My Favorite(?) Excerpt
The discrepancy between the kind of society many Germans thought they were building and the reality of the horror of the Third Reich presents one of the most intriguing questions of our age. How could Fascism -- have happened in a modern, industrialized, educated nation?
Click here for the excerpt from They Thought They Were Free, The Germans, 1938-45 (Chicago: University of Chicago Press, 1955) by Milton Mayer
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