Cronyism has entered the picture. There is a rather large body of evidence demonstrating that the Bush and Obama Administrations have favored large banks in an unseemly way. The same is true for the Congress and other big business insiders like Big Pharma, the Defense Industry and Health Insurance companies.
Witness these posts from the last month alone:
- The less optimistic view of Treasury’s handling of the crisis – Nov 2009
- Healthcare insurance industry insider: “We win” – Dec 2009
- Why is Barney Frank allowing lobbyists to gut financial reform? – Dec 2009
- Bank lobbying e-mail: Quid Pro Quo to kill mortgage modification bill – Dec 2009
- Obama and the Fat Cat bankers – Dec 2009
- U.S. forfeiting billions in future taxes to let Citi repay TARP – Dec 2009
- Gasparino: No woodshed for the fat cats, just a lovefest – Dec 2009
- The phony Senate health care reform bill – Dec 2009
- On releasing Citi from TARP and banking by accounting subterfuge – Dec 2009
- Blodget: Obama suffers because “taxpayer always finishes last” –Dec 2009
I could provide you with a far longer list of posts from the January to April period when the Citi and BofA bailouts were conducted and the alphabet soup of liquidity programs began which Bank of America and Citi were prepared to game.
I said in March it’s the writedowns, stupid. When accounting rules were formally changed to reflect the de-facto accounting policies favoring banks, I knew the big banks were on easy street and The Fake Recovery had begun. So, by April, I said Wells profit forecast is a clear bullish sign.
Don’t even get me started on the stress tests. They were a sham from the start and were merely a means of recapitalizing the banks via inflated equity valuations. They were neither tests nor stressful, as Bill Black has demonstrated.
More recently, posts by Yves Smith and Bruce Krasting confirmed my long-held suspicions that Fannie Mae and Freddie Mac would be used as a nationalization of America’s mortgage problems via a back door bailout of banks.
The evidence, therefore, tends to demonstrate that we have witnessed an orchestrated campaign by the Bush and Obama Administrations to recapitalize too big to fail institutions by hook or by crook, bypassing Congressional approval if necessary. And when it comes to healthcare, both Congress and the White House have bent over backwards to keep the lobbyists onside. As I see it, our government has favored special interests in the past year of Obama’s tenure to our detriment.