U.S. Taxpayers Lose $1.3 Billion to Bankrupted Chrysler
Last week, the U.S. Treasury Department announced the American people had lost $1.3 Billion from the government bailout of Chrysler. Apparently, the Treasury Department considered this loss a success because the auto industry is showing signs of recovery.
"In the year leading up to the Chrysler and General Motors' bankruptcies, the auto industry lost 400,000 jobs. Since the bailout, about 113,000 of those jobs have been recovered."We are nearing 4 years after the TARP Bailouts of the auto-industry. So, the creation of about 113,000 jobs in four years after the industry lost 400,000 jobs is success? Are you kidding me? About three fourths of those lost jobs still do not exist 4 years later, and the American tax payers lost over $1 Billion! In my opinion, there isn't a damn thing successful about that. Should we even consider the added tax revenue lost due to the continued unemployment for those roughly 300,000 people whose jobs still do not exist?
I am still waiting to be convinced the TARP program was necessary, let alone successful. Perhaps the readers can provide some insight for us all in the comments section? It is pure speculation to make claims about what would have happened had none of the bailouts occurred, but it sure makes one curious to wonder if the sky would have indeed stayed in place without it. It isn't like the sky isn't still falling anyways! Then, there is this...
The Fed Audit Exposes $16 Trillion in Secret Loans
Again, I am in no position to adequately provide a cost/benefit analysis of whether or not $16 Trillion in "secret loans" is for the benefit of the average, middle-class Americans, but I'll go with my gut and say it probably has nothing to do with stabilizing the American economy and benefiting average Americans, especially considering it has been revealed in the past that the Fed has made these sorts of exorbitant loans to foreign banks and governments. However, I do know that $16 Trillion dollars entering the market place sounds like a record breaking increase in the supply of the dollar, especially if even a fraction of this money enters the marketplace. The inflation from such belligerent monetary policy alone is something I'd rather average Americans did not have to face. It reminds me of a conversation I had years ago where a family member stunned me by saying he believed "they" were purposefully destroying the dollar. I'm still debating with myself whether that is true, or whether "they" are just that ignorantly egotistical and irresponsible.
A pizza guy by the name of Herman Cain who once served on the board of the Federal Reserve said, "There are no secrets going on in the Federal Reserve to my knowledge." Well, Mr. Cain, your knowledge is inadequate. You wish to be the next President of the United States? Hahaha...Good one, Mr. Cain, and you have jokes?!
I never thought I'd be posting a link to Senator Barney Sander's website. The guy is a full-fledged, self-proclaimed socialist, which isn't a position I agree with at all, but nonetheless, I do appreciate his exposure of the recent Fed Audit. Here it is in its entirety...
July 21, 2011Source: http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."
Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.
The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.
For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.
In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.
To Sanders, the conclusion is simple. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed," he said.
The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.
The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.
A more detailed GAO investigation into potential conflicts of interest at the Fed is due on Oct. 18, but Sanders said one thing already is abundantly clear. "The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street."
To read the GAO report, click here.
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