Two recent articles from the other side have put the lie to several Obama administration talking points without even realizing it. One is that the bank bailout money is well on its way to being repaid and that the government has made a profit on it. However, in an article entitled Banks Repaid Fed Bailout With Other Fed Money the Huffington Post reports that 48% of the money banks repaid to the government was taken from other federally funded programs that were intended to supply capital for loans to small business. Instead the money went to payoff the bailout money. The article cites GAO reports that of $205 billion lent under the first phase of TARP, the feds have been paid $211 billion. But if $101 billion of that $211 billion came from other federal funding, that just means that the taxpayers have been paid back with their own money, not the banks’ money, and that the taxpayers are actually still $104 billion behind in the bank bailouts. This completely contradicts Obama administration claims that the bank bailout money has been paid back at a profit.
A few days later the HuffPo reported that the Banks Figure The Feds Are A Safer Investment Than You. This article notes that despite record low interest rates on Treasury debt, banks are investing in that instead of making loans to small businesses. The banks can still make money on treasuries because they can borrow from the Federal Reserve for essentially no interest. The Fed is doing this “because it sees the economy as dead in the water. And the banks are sitting on that cash hoard because they, too, see the economy as dead in the water.” So much for Obama administration hype about the economy surging on the rebound.
Of course, neither article explicitly makes the connection that these facts totally undermine the Obama administration’s economic claims. But that is to be expected of the leftstream media. More interesting is that they illustrate the Left’s failure to understand the deep relationship between the Left’s great nemesis, Wall Street, and its great love, Washington. There is a reason Goldman Sachs people gave four times as much money to Obama in 2008 as they gave to McCain. The flow of money from the Fed and the feds to the banks under Obama dwarfs all of the other bailout boondoggles.
Progressives dream that they can somehow purify Washington, and rescue it from Wall Street. However, centralizing power can only facilitate centralizing wealth. As I have argued elsewhere, progressives need to realize that Wall Street’s dominance of the nation will only end when Washington’s dominance of the nation ends.