By Brent Budowsky - 04/29/09 06:26 PM EDT
My “epiphany” came when I glanced at the recent campaign finance report of Sen. Chris Dodd (D-Conn.), which shows a stunning lack of support from home-state donors and a deluge of donations from companies doing business with his Senate Banking Committee.
While Wall Street pay is quickly moving back to bubble levels, the system of speculation for compensation (which creates perpetual bubbles) remains intact. Campaign money still flows like a mighty river in a legalized pay-for-play that corrupts our financial and political systems alike.
The source of public anger is this: The core policy is fundamentally a multitrillion-dollar transfer of money from taxpayers to banks, which borrow money from taxpayers at low interest, punish taxpayers by charging them higher interest and pay themselves a king’s ransom for doing it.
The president speaks of transparency and accountability, but: Does anybody know exactly how much money the various government agencies have spent rescuing banks that still refuse to lend? Four trillion dollars? Seven trillion? Ten trillion?
What, exactly, have taxpayers received in return? These monies were provided to increase lending, but net lending is down. When banks receive trillions of dollars to increase lending, they insult the intelligence of taxpayers and the integrity of government by increasing credit card interest rates, increasing bank fees, lowering credit limits, increasing home foreclosures and lowering net lending.
Where’s the accountability?
Meanwhile, Obama and McCain received huge amounts of money from banks, Wall Street firms, hedge funds and mortgage companies while congressional fundraisers continue ad nauseam.
While money is doled out to banks by Congress, money is doled out to Congress by banks.
It is a direct attack against economic recovery, a direct attack against economic stimulus and a direct attack against economic growth for interest rates to be hiked, credit limits to be cut, bank fees to be raised and lending to be lowered.
Have they no shame?
Taxpayers pay for the bailout, subsidize the lobbying, underwrite the campaign donations. Then they are taxed by banks through fees and rates that work as regressive taxes. They will be taxed again to pay for the deficit. They will be taxed again when the value of their money declines from the inflation these trillions of dollars will inevitably cause.
Does anybody understand exactly what the Federal Reserve money is used for, exactly who received it, exactly what taxpayers receive in return and exactly how much money has been spent?
Where’s the transparency?
Can anyone justify the number of senior Treasury jobs that remain unfilled, or the pay-for-play schemes surrounding state pension funds?
Everyone should read the lengthy story in Monday’s New York Times about the career of Mr. Geithner. Did he do his job well, or disastrously, at the New York Fed when he failed to regulate the firms while they were causing this crisis?
Mr. Geithner is without doubt a great power-networker, who spent much time at the N.Y. Fed in endless networking events with the financial power brokers who were creating the crisis that Geithner was failing to prevent.
Geithner was not reforming the system, protecting the customers or opposing the abuses that endanger our national solvency. He was cultivating the support of financial power brokers who were, and remain, his true constituency.
What does it tell credit card CEOs that the president’s chief economic adviser falls asleep at a meeting where he should have been defending taxpayers and consumers like a lion?
The Republicans have virtually nothing to offer except hoping the president fails without serious ideas of their own. The “Party of No” has earned its 21 percent approval.
But, as a matter of conscience and concern for my party and my country, I must break ranks. What is happening is wrong. A whole generation will pay the price for what we do today. The cost will be enormous and incalculable. Both parties owe the next generation far better than either party offers today.
No bank should ever be too big to fail. Instead of taxpayers subsidizing mergers, regulators and legislators should break up any bank so large that its failure endangers the nation as a whole.
Banks given trillions of dollars to lend should lend. Those of either party who tolerate these abuses are betraying the largest financial trust ever given to public officials in the history of the nation, the world or any generation.
Budowsky was an aide to former Sen. Lloyd Bentsen and Bill Alexander, then chief deputy majority whip of the House. He holds an LL.M. degree in international financial law from the London School of Economics. He can be read on The Hill’s Pundits Blog and reached at email@example.com.