Maybe you – like most of the media and most Congress Critters – think that the Bushites’ bailout of their pals on Wall Street is limited to the sum that Congress approved: $700 billion.
If only. That’s a pretty big wad in itself, but it’s only the ante. There’s also a secret bailout that Bloomberg News says has now topped $2 trillion! These are emergency rescue loans from U.S taxpayers that the Federal Reserve has quietly committed to America’s biggest banks, investment firms, and insurance companies.
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Which financial outfits got this money, and how much did each get? That’s a secret, say the Bushites and the bankers. Well, what did the beneficiaries put up as collateral to protect taxpayers? None of your business, say the insiders. Excuse me. It’s our money that’s at risk, not the Fed’s money.
Then there’s Section 382. This is a tax-code provision passed by Congress 22 years ago that makes it illegal for big bank barons to play a shell game that uses dummy companies to dodge the taxes they owe. Good policy.
However, using today’s financial meltdown as an excuse, Treasury Secretary Hank Paulson has unilaterally, autocratically, and illegally repealed Section 382. He didn’t even inform Congress, much less consult with lawmakers, about his astonishing usurpation of power.
It seems Hank wanted big banks to be able to use these tax shelter scams as a way of financing their takeovers of smaller bank competitors – so, he simply vetoed the Congressional ban on such scams. This is a glorious taxpaid windfall for the bankers. For example, when Wells Fargo took over Wachovia this year, it got about $25 billion from Paulson’s tax dodge. Over all, the giveaway is expected to cost tax payers another $140 billion.
This ever-more-odious bailout has become the biggest bank robbery ever.
“Fed Defies Transparency Aim in Refusal to Disclose (Update 2),” www.bloomberg.com, November 10, 2008.
“A Quiet Windfall For U.S. Banks,” www.washingtonpost.com, November 10, 2008.
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