About | Archive | Blog | Featured Content | Films | Library | Links

Obama Plan Blows Secret Kisses to Wall Street



Ernest Istook
The Foundry, The Heritage Foundation
April 28, 2010

Somebody spilled the beans Tuesday, telling the truth about the financial reform bill being debated in Congress. But most media ignored it.

Rather than being the targets of this bill, Wall Street financiers will be rewarded by it. The chairman of Goldman Sachs, Lloyd Blankfein, told a Senate subcommittee, “The biggest beneficiary of reform is Wall Street itself.”

So why does President Obama instead want us to believe the legislation is our revenge against Wall Street, a chance to get our money back after so many bailouts?

Simple. Bailouts are the most unpopular topic in the country, so the quickest way to pass another big-government bill is to label it “anti-bailout,” even when it’s the opposite.

Obama says this bill will end bailouts. Opponents say it will perpetuate bailouts. Then they call each other liars.

The key is that they use different definitions. Obama claims that so long as taxpayer money doesn’t go directly to a company or to its shareholders, it’s not a bailout. But he considers it okay to send billions to pay off that company’s creditors—who typically are big companies and Wall Street firms. To the rest of us, paying a company’s debts IS the bailout, as we’ve already seen happen multiple times.

Obama also pretends that it’s not government money. Bankers would be ordered by the new law to create a $50-billion fund; but since Obama won’t agree that it’s a tax, he claims it’s not taxpayer money. Of course, the banks will charge higher fees to us customers to recoup this amount.

Obama’s tough talk against Wall Street draws headlines. But when whipping boy Goldman Sachs says they like the proposed punishment, they’re not being masochists. They know that they’re getting a government guarantee that they and their friends—as creditors—won’t suffer losses when a business partner goes under. Plus anyone doing business with the Wall Street big boys knows they won’t take a loss thanks to the proposed law. They’ll get more business thanks to that assurance and protection.

The financial reform bill has plenty of other dangerous flaws, but the bailout issue attracts the most attention. The selling of this bill echoes the pattern used to pass Obamacare; only now are some realizing just how many false claims were used to jam that health care bill into law.

Nobody should forget that the supporters of the financial reform measure are mostly the same members of Congress who made false claims about the health package. People also should remember that most of these same members of Congress supported the original bailouts, making their current criticism of bankers ring hollow.

A well-known ad campaign for a former firm, EF Hutton, bragged that “When EF Hutton talks, people listen.” Today, when the CEO of Goldman Sachs now admits, “The biggest beneficiary of reform is Wall Street itself,” then it should not be ignored. It’s a dramatic sign that this bill is being sold under false pretenses.

But Wall Street is about money, not adoration. They benefited from the original bailouts, which means more to them than the criticism. They invested $15-million in Obama’s campaign—and plenty more in congressional campaigns. Now they’re willing to take a public bashing from their friends so long as they’re rewarded with what counts. And that’s the bottom line.

Related Content

Economic Freedom: Key to Post-Conflict Recovery
Anthony B. Kim, The Foundry, The Heritage Foundation, 04.27.2010

Bailouts, Stimulus Packages and Jobless Recovery: The Crisis of Wealth Destruction
Henry C.K. Liu, Global Research, 04.27.2010

NABE Economists on Stimulus: No Impact!
The Foundry, The Heritage Foundation, 04.26.2010

Relying on Economic Freedom in Trying Times
The Foundry, The Heritage Foundation, 04.23.2010

Austrian Economics Rising
Thomas R. Eddlem, The New American, 04.15.2010

Central Banking as an Engine of Corruption
Thomas J. DiLorenzo, Ludwig von Mises Institute, 04.16.2010

Catherine Austin Fitts
Alex Jones, PrisonPlanet.tv, 04.10.2010

Sponsors

Your Ad Here

IndyTruth
Education for Freedom

FAIR USE NOTICE. Many of the stories on this site contain copyrighted material whose use has not been specifically authorized by the copyright owner. We are making this material available in its efforts to advance the understanding of public policy, world events, human rights, economics, and health. We believe this constitutes a 'fair use' of the copyrighted material as provided for in Section 107 of the US Copyright Law. If you wish to use such copyrighted material for purposes of your own that go beyond 'fair use,' you must obtain permission from the copyright owner.

COPYRIGHT NOTICE: IndyTruth does not make legal copyright claims to its original content, on the principle that readers should be able to freely spread information for educational purposes. If you repost anything, please respect our hard work by crediting the author and linking to the original source.