Tag: troubled asset relief program

Does It Really Matter How Elizabeth Warren Spent TARP Oversight Funds?

Sometimes it seems like Republicans — and much of the press covering them — are more worried about how those scrutinizing the financial industry and the nature of the 2008 economic collapse are spending their rather small operating budgets than the big picture: the hundreds of billions doled out to the big banks.

Thus the latest broadside at the Massachusetts Senate candidate, former chair of the Troubled Asset Relief Program (TARP, the bailout of the banks) Congressional Oversight Panel, and mastermind of the new agency to protect consumers from bad faith financial actors, Elizabeth Warren:

Elizabeth Warren became a hero of the left for her unrelenting pursuit of accountability and transparency with big banks and Wall Street firms that took billions of dollars in federal bailout money in 2008.

But when it comes to how her own bailout watchdog committee spent more than $10 million in taxpayer money, Warren has been a lot less forthcoming.

Warren, who is seeking the Democratic Senate nomination in Massachusetts to take on Republican Scott Brown, has yet to break down exactly how her congressional panel spent the money on travel expenses, meals and consultants, nor has Warren revealed the total amount she was paid while serving as chairman.

The Congressional Oversight Panel, which existed for more than two years, has not yet disclosed any other staff salaries either — even though the five-member panel was created and run by Congress, where nearly every staffer salary and office expense, from plane tickets to bottled water, is publicly available.

In fact, Warren opposed GOP efforts to draft a budget for the bipartisan oversight panel, despite telling The Associated Press in 2008 that she wouldn’t buy a winter coat without a spending plan.

Warren declined to be interviewed for this story, and a spokesman for her Senate campaign insisted that the oversight panel had been transparent in its operations. However, late Wednesday night, the spokesman said Warren had reversed her position and now supports opening up all the committee records to public scrutiny.

“The Congressional Oversight Panel was responsible for overseeing hundreds of billions of dollars in TARP spending and was recognized for its strong return on investment, saving taxpayers billions of dollars,” said spokesman Kyle Sullivan. “The panel followed all reporting requirements set up by Congress and publicly disclosed its budget and spending information to Congress and in published reports. Now that the panel has completed its work, Elizabeth supports public access to its records.”

The narrative here is that Ms. Warren isn’t the squeaky-clean moral leader on this issue that she claims — or something.

But the difference between overseeing how $700 billion is distributed to the banks that brought down the world economy and being completely transparent in accounting for how a relatively tiny sum is used to look out for taxpayers seems lost on everyone here.

Lest we forget, Rep. Darrell Issa, top Republican on the House Oversight Committee, raised a stink last year over how the Financial Crisis Inquiry Commission was spending its (also tiny) budget in reporting on how the economy collapsed in 2008:

Monday is the deadline set by Darrell Issa, the Republican chairman of the House oversight committee, for Phil Angelides, chairman of the commission, to provide financial information and e-mail records to allow a congressional investigation of the investigators.

Mr Issa says he wants to check that taxpayers got value for money in the investigation and to examine any potential conflicts of interest, the high staff turnover, requests for more funding and the breakdown in relations between Republicans and Democrats.

To be sure, there’s no reason for Warren not to come forth and be transparent about her work and how it was budgeted — and the same applies to the FCIC.

But that Republican leaders continue to harangue tiny inefficiencies in the federal government while refusing to address broader, structural budget problems — like an increasingly regressive tax code and banks holding taxpayers hostage — is a huge isuse for America, and deserves all the reportorial oxygen possible.

‘Job Creator’ To Eliminate 30,000 Jobs

Bank of America, the nation’s largest bank, plans to cut about 30,000 jobs over the next few years in an effort to save $5 billion per year. These cuts, many of which the company expects to come through eliminating unfilled positions, will follow up 6,000 job cuts that the bank has already made through the third quarter of this year.

The bank’s plan to cut 10 percent of its workforce is yet another sign that Congress’ policy of corporate welfare is not working. Senate Minority Leader Mitch McConnell says that President Obama must lower the corporate tax rate and “be as bold about liberating job creators as he is about shackling them” if he hopes to lower unemployment and stimulate the economy. It’s hard to see what more could be done for a “job creator” like Bank of America, however.

Bank of America received $45 billion dollars of capital investments and emergency funding through the 2008 Troubled Asset Relief Program, it paid zero dollars in federal income tax in 2009 and 2010, and last year it received a tax refund of $1.9 billion from the IRS despite making $4.4 billion in profits. But despite all of this goodwill from the U.S. government, Bank of America is choosing to eliminate 30,000 more jobs in a climate of over 9 percent unemployment.

It’s about time that we stop showering praise on companies like Bank of America, which receive charity from the federal government and respond by exploiting loopholes to avoid paying taxes, and by cutting jobs at the worst possible time. It’s time to be honest with ourselves: Bank of America is not a “job creator;” it’s a profit-seeking institution without concern for the public good.

You Think Obama’s Been A Bad President? Prove It

Aug. 26 (Bloomberg) — Tell me again why Barack Obama has been such a bad president? I’m not talking here about him as a tactician and communicator. We can agree that he has played some bad poker with Congress. And let’s stipulate that at the moment he’s falling short in the intangibles of leadership.

I’m thinking instead of that opening sequence in the show “Mission Impossible,” the one where Jim Phelps, played by Peter Graves, gets his instructions.

Your mission, Jim (and readers named something else), should you decide to accept it, is to identify where Obama has been a poor decision-maker. What, specifically, has he done wrong on policy? What, specifically, would you have done differently to create jobs? And what can any of the current Republican candidates offer that would be an improvement on the employment front?

I’m not interested in hearing ad hominem attacks or about your generalized “disappointment.”

I want to know, on a substantive basis, why you think he deserves to be in a dead heat with Mitt Romney and Rick Perry and only a few points ahead of Ron Paul and Michele Bachmann in a new Gallup Poll. Is it just that any president — regardless of circumstances and party — who presides over 9 percent unemployment deserves to lose?

Left, Right, Center

Every day you’re pummeling him from the right, left and middle. Senators John McCain and Lindsey Graham even attacked the president for letting Libyan rebels take Tripoli instead of burying Muammar Qaddafi under American bombs months ago. Here we have the best possible result — the high probability of regime change for about one-thousandth of the cost of getting rid of Saddam Hussein and no bad feelings from the locals — and Obama gets savaged anyway.

Like everyone else, I’ve got my list of Obama mistakes, from failing to break up the banks in early 2009 to neglecting to force a vote on ending the Bush tax cuts when the Democrats still controlled Congress. He shouldn’t have raised hopes with “Recovery Summer” and “Winning the Future” until the economy was more durable. I could go on.

But do these miscalculations really mean it’s time for him to go?

Most of the bad feeling goes back to the first year or so of the Obama presidency. And in hindsight, those decisions really weren’t so bad. To prove my point, let’s review a few areas where he supposedly messed up.

A Few Rebuttals

From the left: “He should have pushed for a much bigger stimulus in 2009.”

That’s the view of New York Times columnist Paul Krugman, now gospel among liberals. It’s true economically but bears no relationship to the political truth of that period. Consider that in December 2008, Pennsylvania Governor Ed Rendell, a hardcore liberal Democrat, proposed a $165 billion stimulus and said he would be ecstatic if it went to $300 billion. President- elect Obama wanted to go over $1 trillion but was told by House Democrats that it absolutely wouldn’t pass. In exchange for the votes of three Republicans in the Senate he needed for passage, Obama reduced the stimulus to $787 billion, which was still almost five times Rendell’s number and the largest amount that was politically possible.

From the right: “The stimulus and bailouts failed.”

When Obama took office, the economy was losing about 750,000 jobs a month and heading for another Great Depression. The recession ended (at least for a while) and we now are adding several thousand jobs a month — anemic growth, but an awful lot better than the alternative. How did that happen? Luck?

Fed, Stimulus, TARP

All the bellyaching ignores that the Federal Reserve’s emergency policies stabilized the financial system, and that the non-partisan Congressional Budget Office estimates that the stimulus increased economic growth and saved or created millions of jobs. According to the Treasury Department, taxpayers will end up actually making money on the bank bailouts under the Troubled Asset Relief Program, which Obama inherited from the previous administration.

The Republican alternative for job creation wasn’t tax cuts (the stimulus contained almost $300 billion in tax cuts) but deficit reduction and rolling back regulation. I’ve yet to see a single economist convincingly argue how either would have reversed the catastrophic job losses.

From all sides: “He took his eye off jobs by pushing health care.”

Not really. Health care consumed enormous time and political capital in late 2009 and early 2010. But with the stimulus new and still being absorbed (with remarkably little scandal) into the American economy, it’s not as if health care distracted the president from another jobs program in that period. Sure, he should have rhetorically “pivoted to jobs” earlier, but substantively it wouldn’t have made much difference. And Republicans have offered no evidence for their claim that the Affordable Care Act (which includes tax credits for small businesses) has contributed to current levels of unemployment. How could it? The program hasn’t even fully begun yet.

The all-purpose explanation from the business community is “uncertainty.” We’re told that people, and enterprises, won’t invest because they aren’t sure about future taxes. This is a crock. “People invest to make money,” the noted lefty socialist Warren E. Buffett recently wrote in the New York Times, “and potential taxes have never scared them off.”

Again, from all sides: “He looked weak during the debt- limit debate.”

Yep. And if you were president and a group of extremists was pointing a gun at the head of the American economy, what would you have done? Invoking the 14th Amendment sounded satisfying, but a constitutional crisis layered on top of a debt-limit crisis would have been a fiasco, and probably would have ensured default as world markets spent months wondering who in the U.S. had the authority to pay our bills.

Be Specific

Elections involving incumbents are inevitably hire/fire decisions. With foreign policy mostly off the table, hiring a Republican means buying his or her jobs plan. Firing Obama means rejecting where he has come down on big decisions. He and Romney will unveil their jobs plans in September. In the meantime, I’d like to hear from Democrats, Republicans and especially independents who voted for Obama the last time but have given up on him now. Why?

Your mission, Jim, should you decide to accept it, is to be specific and rational, not vague and visceral.

(Jonathan Alter, a Bloomberg View columnist, is the author of “The Promise: President Obama, Year One.” The opinions expressed are his own.)

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