Obama Should Focus on Bank Crisis Rather Than “Fake Populism”

NLPC President Peter Flaherty said today, “Excessive executive pay and perks are indeed a problem, as NLPC sought to highlight way before the financial meltdown. But the real scandal now is bank bailouts without end.

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Instead of engaging in fake populism by trashing corporate travel to Las Vegas or the Super Bowl, Obama should produce a plan to deal with the banking crisis. Throwing more taxpayer money at AIG and Citigroup as they lurch from crisis to crisis is not a plan.  I am worried that by the time Obama and Timothy Geithner come up with a strategy, there will be no money left.

The tally for AIG is now $175 billion with no end in sight. AIG placed bets on derivative trades that it could not possibly pay off if it lost. This is called fraud. These bad bets were big enough to bring down the financial system. Obama would have more credibility if his administration were seeking to prosecute these criminal acts.

I guess Citigroup is too politically well connected to fail. Why is not Robert Ruben the target of Obama’s ire? He realized $128 million in compensation, but is being allowed to simply walk away as billions more are pumped into the Citigroup carcass. Citigroup is not the first meltdown with which Ruben has been associated. In 2001, he improperly attempted to get the Treasury Department to intervene with bond rating agencies to prevent a downgrade of Enron’s bonds.

While Obama is raising taxes on the middle class, he and Geithner are the best friends that failed Wall Street executives have ever had.”

On January 29, NLPC asked the Special Inspector General for the Troubled Asset Relief Program (TARP) to investigate the sponsorship of a Congressional junket to the Caribbean by TARP recipient Citigroup. The trip, which violated House Rules, was led by House Ways and Means Chairman Charles Rangel (D-NY).