Many readers here likely remember September 29, 2008. For a brief moment, the U.S. House extended a big middle finger at Wall Street - and then, quite predictably, the entire political, media and corporate Establishment went apeshit. Though it only lasted a few days, the standoff helped further controversialize the Troubled Asset Relief Program, and thus ultimately forced the addition of some (albeit mild) restrictions on its power.
Most of us who opposed the TARP as written - and there were not many willing to take that position - were not against taking any action. We were against Congress trampling the Constitution and turning the Treasury Secretary into a king, and we were against simply handing away $700 billion with no strings attached. For this, we were attacked by the Punditburo, which preposterously likened a vote for the bill as a courageous - and necessary - vote for landmark civil rights legislation (I shit you not). And for the most part, the American public has remained opposed to writing blank checks to Wall Street, especially considering the news that these kinds of bailouts have put taxpayers on the hook for trillions of dollars.
And yet, as I show in my new newspaper column out today, the Obama administration, far from backing off or restricting TARP, is quietly moving forward a plan to create an even bigger, more permanent TARP.
In the column, I explain the details of this new bailout, which Rep. Brad Sherman (D-CA) calls "TARP on Steroids." You can find the relevant sections I refer to here in sections 1109 and 1604 of the bill, and you can see Sherman's full analysis of the proposal here. I also encourage you to watch the video clip at the bottom of this post in which Treasury Secretary Tim Geithner - the same Geithner who this week was nailed for secretly giving away billions via the AIG bailout - said the White House would oppose any Democratic amendments that would limit this new TARP on Steroids to $1 trillion. And, you can listen here to my Q&A about this issue with Sherman this week on my AM760 radio show.
I wish I could say I was surprised at this - but this is what you get when an administration packs its top-level economic positions with people connected to the same financial firms that destroyed the economy. Corruption, as we are learning, is not the exclusive domain of one party. The only question is whether or not Congress will stage another September 29th. I sure hope it does.
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