While the battle plays out for public opinion and in Congress on what the Wall Street Bailout will look like, banks and financial services firms and their lobbyists are already trying to get their hands on more of the taxpayers goodies.
Just since the idea of a bailout was floated, Paulson has already expanded the request to include foreign-based subsidiaries of American financial firms and to expand the list of assets eligible to include securities backed by credit cards and car loans. Anyone have an estimate on the size of those markets?
Now an article in the New York Times tells us that financial firms and banks are all asking for their own little spot at the slop bucket.
More of this sickening display over the bubble...
Big Financiers Start Lobbying for Wider Aid
Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.
We have met the enemy, and they are the Financial Services Roundtable:
"The definition of Financial Institution should be as broad as possible," the Financial Services Roundtable, which represents big financial services companies, wrote in an e-mail message to members on Sunday.
The group said a wide variety of institutions as varied as mortgage lenders and insurance companies should be able to take advantage of the bailout, and that these companies should be able to sell off any investments linked to mortgages.
Don't worry, there are plenty of lobbyists to represent all the different interests that stand to benefit from the bailout.
Each part of the financial industry is pursuing its own interests.
Small banks, for example, are pushing the government to buy loans they made to home builders and commercial developers. Wall Street banks are lobbying to temporarily suspend certain accounting rules to avoid taking big losses on the assets they sell to Treasury...Some bankers are pushing for government support of those securities [municipal bonds]as part of a broader effort to restore investor confidence in money market funds...
The group also discussed which securities would be eligible to be sold to Treasury. Under the latest proposal, the government would buy securities issued on or before Sept. 17.
But some bankers debated whether the cutoff date should be December 2007, when the market was clearly seizing up, to avoid bailing out those who bought securities recently...
Other firms hope to be hired to manage the assets that Treasury acquires, a job that could earn them $1 billion a year, even if they charged fees that were modest by industry standards.
Meanwhile, Jake Tapper points out that Last Years Big 5 Wall Street Bonuses a Record $39 Billion
Figures that Tapper compiled show that in spite of the fact that these firms lost $74 billion in value, the firms paid out what would be $201,500 per employee if the bonuses were split between all the workers at these firms (which of course they were not). That's $10 billion more than Morgan got to "rescue" Bear Stears.
ACTION IS NEEDED
If Progressives do not apply pressure NOW on the bailout, the narrative will be set.
Call your congresscritters and tell them NO BLANK CHECK. The financiers are CRIMINALS, and should be immediately investigated. The FBI already has a jump start on the predatory lending practices in the mortgage industry. Practices in that industry which have been reported widely should curl your hair.
THIS IS THE TIME TO APPLY LEVERAGE. Once the money is handed out, there will be no strength in our bargaining position. American people are quite rightly outraged and angry about this.
We need to remind everyone that these so-called financial geniuses got us into this mess with greed and recklessness. We also need to hit hard on the underlying causes of this mess, or the reasons that Americans are struggling to pay their medical bills, mortgages, school loans, auto loans and credit card debt. The republicans are hitting hard on the "irresponsibility" of average Americans who are just trying to make ends meet and who were sold the American dream. They are busy blaming the Community Redevelopment Act. They are standing up for their constituents, the fat cats, and demanding not to have regulation added, and not to extend any help to the little guy. Those who are trained in finance, and who supposedly could be trusted without regulation, are the ones who bear the largest responsibility for extending this credit to people who couldn't afford it. If borrowers made "dumb" loans and overextended themselves, then how dumb does that make the so-called responsible people who approved those loans?
Let's not let them make the taxpayers the villain and the scapegoat.
Let's hold them accountable for this epic fail.