NLPC Blasts Obama/Geithner Big Bank Bailout

According to Peter Flaherty, President of the National Legal and Policy Center (NLPC):

“The trillion-dollar stimulus plan has not even passed Congress and the administration proposes to throw another trillion at Wall Street on top of the $750 billion already provided without a tangible benefit.

Buying toxic assets was supposed to be the purpose of the first TARP. After Henry Paulson and Timothy Geithner warned that our financial system would collapse if TARP were not passed, they spent the money on something else — bolstering the capital position of banks. Politically well-connected Citigroup has received $45 billion, more than the book value of the company, and it is still in trouble.

The burden is on President Obama and Timothy Geithner to explain why another Wall Street bailout will work when the first one did not. This latest plan would have the taxpayer finance the purchase of troubled assets, opening the door for unregulated, opaque entities like hedge funds to speculate with taxpayer funds.

The White House doesn’t get it. To have Countrywide VIP Christopher Dodd introduce tax cheat Timothy Geithner to detail the second stage of an already-unpopular Wall Street bailout shows poor judgment.”

NLPC promotes ethics in public life. On January 29, NLPC asked Neil M. Barofsky, the Special Inspector General for TARP, for an investigation of the sponsorship by Citigroup of a junket to the Caribbean by House Ways and Means Committee Chairman Charles Rangel (D-NY) and five other members of Congress, a trip that violated House Rules.