Remember this the next time you read the Democrat-sponsored financial reform bill helps contain the so-called dangers of Wall Street.
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.
But why oh why would Democrats create legislation that helps create more bailout opportunities for the financial sector? Easy!
Wall Street helped give a fundraising edge to Democratic committees and candidates. Employees in the securities and investment industry made $34.3 million in donations last year, about the same as in 2007, with 62 percent going to Democrats, the party’s largest share in a non-election year in the 20 years of data compiled by the Center for Responsive Politics, a Washington-based research group.
One reason for the increased Democratic share is that investors aren’t unanimously opposed to proposed financial regulations making their way through Congress, said Joe Keefe, president and chief executive officer of Portsmouth, New Hampshire-based Pax World Management LLC, which manages $2.4 billion.
That clears that right up.