Money Still Owed In Federal Bailout: $1.5 Trillion Still Owed to Treasury, Federal Reserve 3AUG11

WELL if this doesn't piss you off I don't know what will. While we all stewed about the looming financial crisis and a double dip recession and the negotiations over raising the federal debt ceiling this report shows there's $1.5 TRILLION owed to the government, to us, the taxpayers by recipients of federal bailout funds!!!!! The President and Congress are cutting funding for vital social safety net programs and vital government funding for all levels of education, food safety, the EPA, health care, and more while no doubt many of these companies and institutions have lavished obscene bonuses and pay increases on their top executives! This from BANKSTER (banker + gangster), be sure to click the links in the story for more in depth reports...
Submitted by Mary Bottari 

A new study released today by the Center for Media and Democracy (CMD) shows that, despite rosy statements about the bailout's impending successful conclusion from federal government officials, $1.5 trillion of the $4.8 trillion in federal bailout funds are still outstanding.
The analysis, presented in charts and an online table and program profiles, is based entirely on government records. This comprehensive assessment of the bailout goes beyond the relatively small Troubled Asset Relief Program (TARP) program to look at the rest of the Treasury and Federal Reserve’s multi-trillion dollar response to the financial crisis. It shows that while the TARP bailout of Wall Street (not including the bailout of the auto industry) amounted to $330 billion, the government also quietly spent $4.4 trillion more in efforts to stave off the collapse of the financial and mortgage lending sectors. The majority of these funds ($3.9 trillion) came from the Federal Reserve, which undertook the actions citing an obscure section of its charter.
“In order to understand the big picture on the bailout, you have to look beyond TARP and examine the trillions the Federal Reserve has disbursed to keep the big banks above water. $4.8 trillion went out the door to aid financial companies and repair the damage they caused to financial markets, and $1.5 trillion of that is still outstanding,” said Mary Bottari, director of CMD’s Real Economy Project.
TOTAL WALL STREET BAILOUT COST TABLE: You can click here to see our a full list of each bailout program, the amount of money disbursed and the amount of money outstanding in each program.
Most of the bailout funds were comprised of aid to banks – the peak outstanding amount was $2.2 trillion in January 2009 – which took place at the height of the financial crisis in the form of loans with below-market interest rates and for questionable collateral to banks directly from the Treasury and Federal Reserve.

Mortgage-Backed Securities Purchases

CMD’s study also shows how the government is continuing to prop up the same banks that caused the crisis in its attempt to help the housing market. The government’s housing program – which peaked at $1.6 trillion outstanding in July 2010 – is aimed at keeping mortgage lending flowing by subsidizing deals Fannie Mae and Freddie Mac make with the banks. Treasury and the Federal Reserve’s main approach has been to buy more than a trillion dollars worth of mortgage-backed securities from Fannie Mae and Freddie Mac so that the two government-sponsored enterprises can continue to purchase and bundle mortgages from the banks, which they sell to Fannie and Freddie at a profit. The banks also benefit from the hundreds of billions in direct loans the government has made to Fannie and Freddie, which the GSEs then turn around and make in insurance pay-outs to banks for mortgages that have gone bad.
This massive effort is in stark contrast to the mere $2 billion the Treasury has spent to directly help homeowners stay in their homes via the widely criticized Home Affordable Mortgage Program (HAMP) program. With housing prices continuing to falter and the United States approaching 9.2 million foreclosure filings since the beginning of 2008, HAMP can be described as nothing less than an abject failure.
“The Federal Reserve and the Treasury have spent $1.6 trillion in a bank-shot to save the mortgage lending market by using the same financial companies that got us into this mess,” said Conor Kenny, lead author of the study. “That’s more than 800 times what they’ve spent directly to keep homeowners in their houses, and the banks have made money off the whole thing.”
CMD’s analysis also shows how the $4.8 trillion bailout of the financial sector dwarfs the $600 billion that the Federal Reserve spent on the much-hyped “Quantitative Easing 2” of 2010-2011 that was intended to help the broader economy – not just the financial sector – by lowering interest rates across the board and preventing deflation.

 

BOHICA!!! Who Screwed the Middle Class? 25MAR11

BOHICA working and middle class America! This from Mother Jones explaining why unemployment and economic inequality are government policy....

I've written several times before about Winner-Take-All Politics, in which Jacob Hacker and Paul Pierson argue that middle-class wage stagnation and growing income inequality are due as much to political decisions over the past 30 years as they are to broad economic trends. I find their arguments persuasive, but there's no question that it's a tough case to make. After all, exactly which political decisions are we talking about? Can we point to specific pieces of legislation or specific agency decisions that have retarded wage growth? In fact, we can—things like tax policy, financial deregulation, the decline of antitrust enforcement, and anti-union rulings by the NLRB all played a role. By themselves, though, these just aren't enough to account for what's happened. So what's the smoking gun when it comes to the impact of politics on wage stagnation and growing income inequality?
I think Lane Kenworthy fingered the right culprit a few weeks ago: the abandonment in recent decades of full employment as even a rhetorical goal of American economic policy:

The post–World War II experiences of the rich democracies suggest three routes to rising working- and middle-class wages. One is an environment in which firms face only moderate competition in product markets and limited pressure from shareholders, allowing them to pass on a significant share of growth to their employees. This characterized the period from the late 1940s through the mid 1970s, but it’s now long gone. The second is strong unions. I see little hope of that in America’s future. The third is full employment.

But full employment is only possible if the Federal Reserve is committed to it, and this is decidedly no longer the case: "Since the late 1970s, independent central banks such as the Fed almost always have prioritized low inflation, rendering low unemployment difficult to achieve. If the Fed isn’t on board, even a workable plan for full employment supported by the American public and our elected officials probably won’t be enough."
Following the stagflation of the 70s, conservatives decisively took over Fed policy and put it in the service of the wealthy, prioritizing low inflation over low unemployment and tacitly promising bailouts whenever Wall Street found itself in danger (a practice charmingly known as the "Greenspan put"). Matt Yglesias has a useful piece in Democracy this month arguing that progressives need to take the Fed far more seriously if we ever want to have any chance of reversing this:

Central banks and monetary policy are the primary determinant of short-term economic conditions—of the unemployment rate, and thus of workers’ ability to bargain for wages. This is, clearly, a hugely important subject in its own right. But it’s also a critical determinant of overall political conditions.
....But when Barack Obama was elected in 2008, he rather hastily chose to reappoint [Ben] Bernanke, creating a situation in which no Democrat has held the most important domestic policy job in the land since 1987. He inherited two vacancies on the Board of Governors that he left open for over a year, only putting names forward after a third vacancy emerged in 2010....Of course, no one can know for sure what the Fed would have done had Obama picked someone other than Bernanke to chair it or filled the vacancies more rapidly. But it’s certainly plausible that different personnel would have led to swifter and more forceful moves toward monetary stimulus, a more rapid end to the recession, and a lower unemployment rate.

A lot has happened over the past 30 years, but if you're looking for a single political sea change that's had the biggest impact on middle class wages—more important than union decline, more important than NAFTA, more important than the end of Glass-Steagall—it's the political consensus that underlies the Fed's reluctance to allow labor markets to stay tight enough to generate wage increases in the real economy. And it's something we're seeing all over again right now, as the DC chattering classes have almost unanimously decided that inflation is our real enemy right now, even though core inflation is running around 1% and unemployment is still near 9%.
This is a policy beloved of the business community, which prefers loose labor markets that keep wages low and executive compensation high, but it hasn't always been the Fed's policy and it's not written in stone that it has to be now. Tight labor markets and rising middle-class wages are, to a large extent, a choice we make. Politics took them away 30 years ago, and politics can return them to us if we want.

Front page image: Celine Nadeau

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Kevin Drum is a political blogger for Mother Jones. For more of his stories, click here. Get Kevin Drum's RSS feed.

Texas governor railed against ‘bailouts’ on same day he requested one from THE RAW STORY 25JAN11

ANOTHER example of gop & tea-bagger hypocrisy, this time from Texas, where everything is bigger, including governor rick perry's mouth.....This from The Raw Story..

Texas Governor Rick Perry, the Democrat-turned-Republican who served as George W. Bush's lieutenant and won his third term last year, wants you to think he's not a fan of federal bailouts.
Yet, on the same day "Texans for Rick Perry" launched their "No Government Bailouts" campaign, Perry himself was lining up with the rest of the states asking for billions in federal funding from President Barack Obama's Recovery Act.
Despite having $9.1 billion in surplus in a so-called "rainy day fund," Texas faced a $6.6 billion budget deficit in the 2010-11 fiscal years. To fill that gap, the state took $6.4 billion from the Obama administration and declared their budget gap covered, freeing up the Republicans who dominated the legislature to run on their fiscal responsibility.
The day after President Obama signed the Recovery Act, Perry published an op-ed in The Washington Times, railing against "unparalleled growth in government." On his blog, he urged supporters to sign his petition against "irresponsible spending that threatens our future."
Rick Perry's future, however, was not the one at risk. On that same day, CNN noted, Perry applied for funds from the Recovery Act, slamming shut the state's budget deficit and plugging holes in Texans' Medicare and public education.
A spokesperson for Perry told the network that "Texas would have balanced its budget regardless of the presence of stimulus dollars."
Texas, which had nearly double the national average percentage of its children who go without health insurance, today faced a $25 billion budget shortfall for the 2012-13 fiscal years.
The Republican-dominated legislature, which recently debated opting out of a federal children's health insurance program to raise money for the state's general fund, was seen as unlikely to raise taxes in order to close the gap.
The reason for such a sudden, massive hole? Texas "government gets about 60 percent of its revenue from sales taxes, so when there's a dramatic drop in state revenues, or collections, there's less money to spend," the Texas Tribune noted. "During the economic recession of 2008-2009, Texas saw a drop in state revenues for 14 straight months."
Grimmer still, the state's unemployment swamp was continuing to deepen: even while employers added 20,000 jobs in December, that did not exceed the number of jobs lost in the same month, driving unemployment upwards to 8.3 percent.
Since Texas also lacked an income tax, that growing number of jobless meant even less revenue in sales taxes. The state's job rolls still haven't recovered from 2009 either, when over 350,000 positions were lost state-wide.