goldman sachs

Our government spent as much money bailing out foreign firms as some countries spent on stabilizing their entire financial system.  Much of the money in the $140 billion AIG bailout actually went to mismanaged foreign firms that dealt with AIG.  The government also used that bailout to give billions to the Wall Street investment firm Goldman Sachs, an immensely rich and profitable company that didn’t even need the money.  (While harming most banks, and the productive  sectors of the economy, the recent financial reform bill will benefit politically-connected Goldman Sachs, which endorsed it.  Goldman Sachs is one of the biggest donors to liberal politicians.)

Earlier, the Obama administration devoted $6 billion in taxpayer money to bailing out Greece, which ran into trouble because of generous pensions that let many occupations like hairdressers retire at age 50.

American workers are also suffering due to the stimulus package.  It is using taxpayer subsidies to replace U.S. jobs with foreign green jobs. It also destroyed thousands of jobs in America’s export sector.

Even more jobs will end up overseas if the Obama administration’s poorly conceived global warming legislation passes.

Reason magazine has an insightful article called “Five Lies About the American Economy.”

“American International Group Inc.’s bailout had a ‘poisonous’ effect on the U.S. financial system because it demonstrated the government would protect Wall Street firms from their own risk-taking, said a Congressional” bailout oversight panel.

Earlier, the Obama administration used the $170 billion AIG bailout to give billions in legally unnecessary payments to the Wall Street firm of Goldman Sachs, which is so rich that it has admitted it didn’t even need the money.  Goldman Sachs, one of the Democratic Party’s biggest donors, is using its political connections to reap record profits.

Obama and Congressional leaders later pushed through a Trojan-horse financial “reform” bill backed by Goldman Sachs that would further enrich Goldman Sachs, which was recently accused of fraud by the Securities and Exchange Commission (SEC).

In a party-line vote, Senate Democrats earlier blocked any reform of Fannie Mae and Freddie Mac, the corrupt, government-sponsored mortgage giants that even Obama administration officials admit were at the “core” of “what went wrong” in the financial crisis.

(Obama received $125,000 in contributions from these mortgage giants as a Senator, second only to the corrupt Senator Chris Dodd, who is retiring this year due to his financial scandals, yet is the chief drafter of the financial “reform” bill.)

At the direction of the Obama administration, Freddie Mac ran up more than $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.)  The Obama administration showered the mortgage giants’ executives with $42 million in compensation.

Fannie and Freddie helped spawn the mortgage crisis by acting as loan toilets, buying up risky mortgages and thus creating an artificial market for junk.  “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”  They paid their CEOs millions, and engaged in massive accounting fraud — $6.3 billion at Fannie Mae alone — to increase the size of their managers’ bonuses.  As Government-Sponsored Enterprises, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Banking expert Peter Wallison, who warned for years about the risky practices of Fannie and Freddie, said the financial “reform” bill would lead to “bailouts forever,” contrary to Obama’s claims.

Government pressure on banks to make loans in economically-depressed neighborhoods was a major cause of the mortgage crisis.  That pressure will increase under the financial “reform” legislation.  Legislators approved Obama’s proposal to create a new consumer “protection” agency.  But it may harm rather than help consumers.  Why?  “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”  It would do so without regard for banks’ financial safety and soundness, even though the Community Reinvestment Act was a key contributor to the financial crisis.

The CEO of Goldman Sachs, the Wall Street firm accused of fraud by the SEC, has endorsed the so-called financial “reform” bill backed by President Obama and congressional leaders.

The bill would enrich Goldman Sachs at the expense of taxpayers and smaller competitors.  While the bill contains lots of red tape and fees that will harm insurance policyholders and Main Street, it contains selective “carve-outs” from consumer-protection laws for cronies of Senator Chris Dodd.  Dodd recently attracted criticism for financial and ethical lapses, such as his receiving “a sweetheart deal on an Irish “cottage” from a crooked stock-trader” and “two preferential discount mortgage interest deals from the now-bankrupt Countrywide.”  Goldman Sachs is the fourth-largest donor to Democratic campaigns, ranking just below public-employee unions and trial lawyers in its massive support for liberal politicians.

The financial bill contains goodies for Big Labor and “too big to fail” banks and financial institutions, at the expense of taxpayers and competing firms.

As journalist Matt Welch notes, Obama “is lying his face off about financial reform.”

Obama has collected millions from Wall Street special interests, his administration contains many Wall Street lobbyists, and he supported the unnecessary $700 billion bank bailout.  But now, he’s pushing a deceptive financial regulation bill with phony rhetoric about “reform,” claiming it is “not legitimate” to point out that the bill could lead to yet more bailouts and government takeovers.

Obama’s legislation would do nothing to rein in the worst offenders behind the mortgage crisis, the government-subsidized mortgage giants Fannie Mae and Freddie Mac, while enriching left-wing lobbying groups and community organizers, and giving the government the permanent ability to bail out and take over Wall Street firms.

Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax cheat Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.” Worse, the Obama administration lifted the $400 billion limit on bailouts for Fannie and Freddie, so that they could continue to buy up junky mortgages at taxpayer expense, and showered their executives with $42 million in compensation.  The Obama administration is now expanding the bailouts of these mortgage giants so that they can lavish pay on their CEOs and reduce the payments of deadbeat mortgage borrowers.  (At the direction of the Obama administration, Freddie Mac is now running up $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.)

Fannie and Freddie helped spawn the mortgage crisis by acting as loan toilets, buying up risky mortgages and thus creating an artificial market for junk.  “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”

Why did they buy these risky loans?  They put up with Clinton-era affordable-housing regulations that required them to buy up lots of risky loans, in order to curry favor on Capitol Hill and thus retain their annual $10 billion in tax and other special privileges (which they possessed owing to their status as “Government-Sponsored Enterprises” or GSEs). They paid their CEOs millions in the process, and engaged in massive accounting fraud — $6.3 billion at Fannie Mae alone — to increase the size of their managers’ bonuses.  As GSEs, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Banking expert Peter J. Wallison, who prophetically warned against the risky practices of Fannie Mae and Freddie Mac for years, says that Obama’s proposals will lead to “bailouts forever” and give big, politically-connected banks that are “too big to fail” the ability to drive smaller rivals out of business at the expense of consumers and taxpayers.  His colleague Alex Pollock notes that Obama has not lived up his administration’s claims that it would back reform of Fannie Mae and Freddie Mac.

Obama claims that it will not lead to more bailouts, but even congressional Democrats admit that it will.  As Congressman Brad Sherman (D-Calif.) admitted, the “bill has unlimited executive bailout authority. . .The bill contains permanent, unlimited bailout authority.”

Government pressure on banks to make loans in economically-depressed neighborhoods was another key reason for the mortgage meltdown and the financial crisis.  If Obama has his way, that pressure will increase.  The House earlier approved Obama’s proposal to create a politically-correct entity called the Consumer Financial Protection Agency. “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”  It would do so without regard for banks’ financial safety and soundness, even though the Community Reinvestment Act was a key contributor to the financial crisis.

Obama’s proposed financial regulations would also harm retail banking operations used by middle-class people and small businesses.

President Obama has collected millions from Wall Street special interests, his administration is chock full of Wall Street lobbyists, and he supported the unnecessary $700 billion bank bailout.  But now, he’s pushing a deceptive financial regulation bill with phony rhetoric about “reform,” claiming it is “not legitimate” to point out that the bill could lead to yet more bailouts and government takeovers (as economists and banking experts like Peter Wallison have demonstrated).

Obama’s legislation would do nothing to curb the abuses of the worst offenders behind the mortgage crisis, the government-subsidized mortgage giants Fannie Mae and Freddie Mac, even as it would enrich the politically connected liberal Wall Street firm Goldman Sachs (recently accused of fraud), enrich left-wing lobbying groups and community organizers, and give the government the permanent ability to bail out and take over Wall Street firms.

Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax cheat Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.” Worse, the Obama administration lifted the $400 billion limit on bailouts for Fannie and Freddie, so that they could continue to buy up junky mortgages at taxpayer expense, and showered their executives with $42 million in compensation.  The Obama administration is now expanding the bailouts of these mortgage giants so that they can lavish pay on their CEOs and reduce the payments of deadbeat mortgage borrowers.  (At the direction of the Obama administration, Freddie Mac is now running up $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.)

Fannie and Freddie helped spawn the mortgage crisis by acting as loan toilets, buying up risky mortgages and thus creating an artificial market for junk.  “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”

Why did they buy these risky loans?  They put up with Clinton-era affordable-housing regulations that required them to buy up lots of risky loans, in order to curry favor on Capitol Hill and thus retain their annual $10 billion in tax and other special privileges (which they possessed owing to their status as “Government-Sponsored Enterprises” or GSEs). They paid their CEOs millions in the process, and engaged in massive accounting fraud — $6.3 billion at Fannie Mae alone — to increase the size of their managers’ bonuses.  As GSEs, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Banking expert Peter J. Wallison, who prophetically warned against the risky practices of Fannie Mae and Freddie Mac for years, says that Obama’s proposals will lead to “bailouts forever” and give big, politically connected banks that are “too big to fail” the ability to drive smaller rivals out of business at the expense of consumers and taxpayers.  His colleague Alex Pollock notes that Obama has not lived up his administration’s claims that it would back reform of Fannie Mae and Freddie Mac.

Obama claims that it will not lead to more bailouts, but even congressional Democrats admit that it will.  As Congressman Brad Sherman (D-Calif.) admitted, the “bill has unlimited executive bailout authority. . .The bill contains permanent, unlimited bailout authority.”

Government pressure on banks to make loans in economically-depressed neighborhoods was another key reason for the mortgage meltdown and the financial crisis.  If Obama has his way, that pressure will increase.  The House earlier approved Obama’s proposal to create a politically-correct entity called the Consumer Financial Protection Agency. “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”  It would do so without regard for banks’ financial safety and soundness, even though the Community Reinvestment Act was a key contributor to the financial crisis.

Obama’s proposed financial regulations would also harm retail banking operations used by middle-class people and small businesses.

The Obama administration and Congressional leaders are pushing a trojan-horse financial “reform” bill that would enrich the wealthy and powerful investment bank Goldman Sachs, which was recently cited for massive fraud by the Securities and Exchange Commission (SEC).  That’s the discovery of John Berlau, who won the National Press Club’s Sandy Hume Memorial Award for exposing the conflicts of interest of a former IRS Commissioner.

Earlier, the administration used the AIG bailout to give billions in legally unnecessary payments to Goldman Sachs, which is so rich that it has admitted it didn’t even need the money.  Goldman Sachs, one of the Democratic Party’s biggest donors, is using its political connections to reap record profits.

Moreover, Obama’s legislation would do nothing to rein in the worst offenders behind the mortgage crisis, the government-subsidized mortgage giants Fannie Mae and Freddie Mac, even as it would give the government the permanent ability to bail out Wall Street firms.

Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.” Worse, the Obama administration lifted the $400-billion limit on bailouts for Fannie and Freddie, so that they could continue to buy up junky mortgages at taxpayer expense, and showered their executives with $42 million in compensation.

The administration is now expanding the bailouts of these mortgage giants, which are now giving lavish pay to their CEOs and reducing the payments of deadbeat mortgage borrowers.  (At the direction of the Obama administration, Freddie Mac is now running up $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public).

Fannie and Freddie helped spawn the mortgage crisis by acting as loan toilets, buying up risky mortgages and thus creating an artificial market for junk.  “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”

Why did they buy these risky loans?  They put up with Clinton-era affordable-housing regulations that required them to buy up lots of risky loans, in order to curry favor on Capitol Hill and thus retain their annual $10 billion in tax and other special privileges (which they possessed owing to their status as “Government-Sponsored Enterprises” or GSEs). They paid their CEOs millions in the process, and engaged in massive accounting fraud — $6.3 billion at Fannie Mae alone — to increase the size of their managers’ bonuses.  As GSEs, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Banking expert Peter J. Wallison, who prophetically warned against the risky practices of Fannie Mae and Freddie Mac for years, says that Obama’s proposals will lead to “bailouts forever” and give big, politically connected banks that are “too big to fail” the ability to drive smaller rivals out of business at the expense of consumers and taxpayers.  His colleague Alex Pollock notes that Obama has not lived up his administration’s claims that it would back reform of Fannie Mae and Freddie Mac.

Government pressure on banks to make loans in economically-depressed neighborhoods was another key reason for the mortgage meltdown and the financial crisis.  If Obama has his way, that pressure will increase.  The House earlier approved Obama’s proposal to create a Consumer Financial Protection Agency. “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”  It would do so without regard for banks’ financial safety and soundness, even though the Community Reinvestment Act was a key contributor to the financial crisis.

Today, the SEC charged giant investment bank Goldman Sachs with more than $1 billion worth of securities fraud for its dealings in the subprime mortgage market.

Ironically, at the same time the SEC is seeking justice for Goldman’s alleged victims, President Obama and Senate Banking Committee Chairman Chris Dodd (D-Conn.) are pushing a bill would reward the firm with potentially billions of dollars by instituting a so-called “resolution authority” that would, in practice, be a permanent bailout fund.

Supporters of Dodd’s bill maintain that it does not create bailouts because the failing firm’s shareholders would be wiped out and its managers would be fired. But what they don’t say is that the money from the $50 billion resolution fund would be used to frequently give creditors of this firm a better deal than they would have in bankruptcy.

Recall that during the financial implosion of late 2008, Goldman was not bailed out directly by taxpayers, but instead received tax dollars as a creditor of AIG. Goldman received $12.9 billion in the “backdoor bailout” of AIG because of the credit default swaps it owned that AIG had insured. Goldman and other of AIG’s counterparties were paid by the government 100 cents on the dollar in this bailout, whereas creditors in bankruptcy court often get less than 50 cents on the dollar.

So as American Enterprise Institute scholar and Financial Crisis Inquiry Commission member Peter Wallison puts it: “That act—paying off the creditors when the government takes over a failing firm—is a bailout. It doesn’t matter that the management lose their jobs, or that the shareholders get nothing. When the creditors are aware that they will get a better deal with the failure of a large company than they will get with a small one that goes the ordinary route to bankruptcy, that is a bailout.”

To top it off, the fees for the Dodd bill’s resolution fund that would pay off a failing firm’s creditors would come not just from banks but from a broad array of Main Street businesses. Stable life, auto and home insurance companies would have to pay into this fund to subsidize the failure of the next high-roller, and the fees they pay would likely be passed on in the premiums their policy holders pay. And the bill’s definition of  “nonbank financial company” is so broad that it could cover manufacturers only tangentially involved in extending credit, such as those that lease equipment to their customers. This would raise prices and cost Main Street jobs.

All in all, the Goldman indictment should serve as a wakeup call to those who want to ram a bill through Congress without looking at who both its victims and beneficiaries would ultimately be.

Earlier, the Washington Post reported on how the Obama administration pressured Freddie Mac not to disclose to investors and the SEC the $30 billion in losses it was incurring as a result of Obama’s mortgage bailouts for undeserving (including high-income) borrowers.

Now, Bloomberg News reports that then-Federal Reserve Bank head (and now Treasury Secretary) “Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis,” and to hide them from the SEC in its SEC filings.  Such conduct is not too surprising coming from Geithner, a sanctimonious and hypocritical tax cheat.  Geithner also used the government’s bailout of AIG to pay billions of dollars to the wealthy Wall Street investment firm of Goldman Sachs, money that it neither needed to stay afloat, nor was legally entitled to.

Earlier this year, Freddie Mac’s CFO killed himself amidst a sea of red ink, as the administration forced Freddie to run up losses on mortgage bailouts, even though economists and real estate experts have criticized those bailouts as harmful to the economy.  Now, the Obama administration is making Freddie Mac and Fannie Mae deliberately run up losses on bailouts and buying up risky loans, even though the government took over Fannie and Freddie in 2008 in the name of ending their risky practices.  It is rewarding their executives for carrying out such terrible policies by showering them with multimillion dollar pay.

The mortgage crisis was caused partly by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac, and partly by the affordable-housing mandates imposed on them.

But Obama’s proposed financial rules overhaul does absolutely nothing about the risky practices of Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.”

Instead, it pressures banks to make even more risky loans.  The House has approved Obama’s proposal to create a politically-correct entity called the Consumer Financial Protection Agency. “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”  The Community Reinvestment Act was a key contributor to the financial crisis.  But the administration’s proposal would direct the new agency to enforce the Community Reinvestment Act without regard for banks’ financial safety and soundness.

Unemployment has risen to 9.8 percent, a 26-year high.

That’s much higher than the Obama administration predicted unemployment would rise, if Congress had refused to pass his $800 billion stimulus package.  The administration claimed unemployment would rise to 8 percent without a stimulus.

Small businesses are finding it more difficult than ever to borrow badly needed money to meet their payrolls.  New financial regulations backed by the administration are contributing to a terrible credit crunch.  Meanwhile, the wealthy Wall Street investment bank Goldman Sachs, perhaps the biggest donor to liberal politicians, received billions of dollars it didn’t even need from the taxpayers’ $170 billion bailout of AIG.

The administration claimed that the stimulus package would deliver a short-run “jolt” that would quickly lift the economy, but unemployment rose very rapidly after its passage, and the package has actually destroyed thousands of jobs in America’s export sector.

Countries that refused to adopt big stimulus packages have fared better than those that imitated Obama. And the biggest-spending countries have suffered worst in the recession.

President Obama claimed the stimulus was needed to prevent an “irreversible decline,” but the Congressional Budget Office said it would actually shrink the economy “in the long run.”  It subsidizes lots of waste, corruption, and welfare, and repeals welfare reform.   It also contains racial set-asides (which are costly) and prevailing-wage rules (which will waste $17 billion).

In his 2008 campaign, Barack Obama talked a lot about “bipartisanship,” but in office, he has governed from the far left, on both domestic and foreign policy, by meddling overseas in favor of left-wing would-be dictators, and at home in support of powerful left-wing unions, at the expense of taxpayers, airline security, the Constitution, and the rule of law.  (One possible exception to his left-wing path is his support for the obscene Wall Street bailouts, which disgusted left and right alike, although those bailouts showered billions of dollars on the liberal Wall Street firm Goldman Sachs, which was so rich that it didn’t even need the money).

The Wall Street Journal criticizes Obama for seeking to force Honduras to accept the return of its ex-president and would-be dictator, Manuel Zelaya, a demand backed by left-wing Latin American dictators. “Mr. Zelaya was deposed and deported this summer after he agitated street protests to support a rewrite of the Honduran constitution so he could serve a second term. The constitution strictly prohibits a change in the term-limits provision. On multiple occasions he was warned to desist, and on June 28 the Supreme Court ordered his arrest. Every major Honduran institution supported the move, even members in Congress of his own political party, the Catholic Church and the country’s human rights ombudsman. To avoid violence the Honduran military escorted Mr. Zelaya out of the country. In other words, his removal from office was legal and constitutional, though his ejection from the country gave the false appearance of an old-fashioned Latin American coup. The U.S. has since come down solidly on the side of—Mr. Zelaya.”

The Weekly Standard criticizes Obama for blocking travel to the U.S. by Hondurans, even while inviting to the White House, and giving a visa to, an official of Burma’s genocidal government, which has used mass rape and massacres against ethnic minority groups, and used torture and murder against Buddhist monks protesting oppression. The Obama Administration earlier imposed travel sanctions on the people of Honduras to punish them for their Supreme Court’s ruling refusing to allow the return of Honduras’s ex-president dictator to office.  Michael Barone, the dean of American political commentators, chides Obama for undemocratically “opposing the elected Congress, courts and civil society of Honduras.”

The Washington Times calls it “the worst foreign policy ever.” It notes that Obama has bullied “Honduras, which is desperately trying to stave off a socialist takeover by an anti-American autocrat whom the State Department has concluded is worthy of full U.S. support. This has delighted Cuban dictators Raul and Fidel Castro and Venezuelan strongman Hugo Chavez, who are very willing to let the United States carry their water. Venezuela, meanwhile, has signed a major arms deal with Russia, continues to build the anti-Gringo “Bolivarian” bloc, bullies U.S. ally Colombia and plans to launch its own nuclear program.” (Obama’s actions have also emboldened Nicaragua’s corrupt, bullying President Daniel Ortega to behave dictatorially).

The Washington Times reports that “President Obama’s diversity czar at the Federal Communications Commission” has praised Venezuelan dictator Hugo Chavez and his crackdown on independent media, in remarks in which he “described Hugo Chavez’s rise to power in Venezuela as ‘an incredible revolution.’” (Chavez recently closed 240 radio stations in Venezuela, and his regime has shot unarmed demonstrators).  Other Obama appointees have Marxist roots or sympathies.   Obama’s green jobs czar was the race-baiter Van Jones, “a self-avowed communist” who remained in office for months, desite controversy, until revelations that he was a Truther who believed that George Bush may have been behind the 9/11 attacks. Obama’s nominee to be Assistant Secretary of State, Arturo Valenzuela, has a reputation as a loud defender of Venezuelan dictator Chavez’s terrible record on freedom of the press.

The Times also criticizes Obama’s congressional allies for moving to unionize airline security screeners and authorize collective bargaining at the TSA, making it more difficult for lazy or careless employees to be fired for incompetence.  The unions have “urged TSA Acting Administrator Gale D. Rossides to suspend use of the agency’s skills test for screeners. Failure rates this year reached more than 50 percent and were as high as 80 percent at some airports. The skills test shows that large numbers of airport screeners are failing at jobs that are intrinsic to keeping our airports and commercial airplanes secure, and the union’s response is to get rid of the test. The government employees union is also pushing to have failed screeners’ records cleared because pay and bonuses are tied to performance and unsatisfactory employee records prevent those who were fired for poor performance from being reinstated. So much for worker accountability.”

Obama also wants to introduce union-backed collective bargaining at the TSA. (A study found that the TSA is more than twice as likely to fail to detect a bomb as the private security firms it replaced. And TSA’s failure rate is three or four times as high as the few remaining private firms still allowed to handle airline security.)

The Obama administration is also undermining the security of railroad passengers by gutting an expert, highly-rated, anti-terror agency at Amtrak, which Amtrak’s unions hate, despite its efficiency, because it is not unionized.  Political cronyism is also playing a role in the gutting of Amtrak’s Office of Security Strategy and Special Operations (OSSSO).  Ultimately, OSSSO’s “highly-specialized officers” will likely be replaced by unionized employees with ”alarmingly low pass rates” in “basic” classes.

Earlier, the Obama administration ripped off taxpayers and retirees in the General Motors and Chrysler bailouts, in order to enrich the left-wing United Auto Workers union, in unnecessary bailouts that have cost at least $70 billion, drawing criticism even from the liberal Washington Post.  Many commentators argued that the auto bailouts were illegal, such as the Heritage Foundation and Clinton administration Labor Secretary Robert Reich.

In the Washington Post, George Will criticizes Obama for caving in to demands by left-wing unions for protectionist policies like tire tariffs that will harm consumers without saving jobs.   The stimulus package passed earlier this year contained protectionist provisions that backfired, destroying thousands of U.S. jobs by triggering massive retaliation against our export industry while doing little to reduce imports.

The Obama administration has now ordered a private provider of Medicare Advantage services to remain silent about how the Obama health-care plan would destroy the Medicare Advantage programs relied on by millions of seniors.  Eugene Volokh, a leading expert on First Amendment law, says that this violates the First Amendment.

Obama’s congressional allies have decided to conceal the exact language of their health-care bill until after it is voted on in committee, preventing the public from learning about controversial provisions buried in it.  (Earlier versions of ObamaCare have contained lots of provisions that do nothing to enhance health care, like racial preferences that were criticized as unconstitutional by the U.S. Commission on Civil Rights).

Obama’s Energy Secretary likens the American people to unruly “teenage kids” who don’t know what’s good for them, and need to be told what to do.  (The cap-and-trade bill he backs to fight global warming would be devastating for the economy and do nothing to protect the environment).

Obama’s health care plan would raise taxes, break promises, harm people with insurance, explode the budget deficit, destroy many inexpensive health-care plans, and take away important freedoms.

The Obama Administration wants to convert the preferred shares the government got from banks in the bank bailout into common shares. In theory, it could help expand lending, but in practice, it could politicize the banks, harm the economy, and waste taxpayer money.

Common shares, unlike preferred shares, vote on who manages the company. The Government could use its votes to make banks waste money on ideological causes — the way it recently did with Freddie Mac, in order to promote mortgage relief for even high-income borrowers, and is now attempting to do with banks that lent to automakers, in order to bail out the UAW union. Or it could use its new power over corporate management to bail out politically connected Wall Street firms — as it did with the AIG bailout, gave billions of dollars to wealthy customers of AIG like Goldman Sachs, a wealthy Wall Street firm which was in little danger of going bankrupt, but which gave millions to liberal politicians, and which was formerly headed by Bush’s last Treasury Secretary.

On the other hand, preferred stock gets paid dividends before common stock. One of the ideas behind conversion is to increase banks’ cushion of common stock, and thus dilute future losses by common shareholders. The theory is that this will make bank managers less reluctant to lend money for fear of losses. Conversion could also reduce troubled banks’ burden of paying preferred dividends, and give the government more incentive to make banks profitable. For this reason, some banks apparently like the idea of conversion.

But there are big pitfalls in practice, since common shares, unlike preferred shares, vote on who manages the company. The Government could use its votes to make banks waste money on ideological causes — the way it recently did with Freddie Mac, in order to promote mortgage relief for even high-income borrowers, and is now attempting to do with banks that lent to automakers, in order to bail out the UAW union. Or it could use its new power over corporate management to bail out politically connected Wall Street firms — as it did with the AIG bailout, gave billions of dollars to wealthy customers of AIG like Goldman Sachs, a wealthy Wall Street firm which was in little danger of going bankrupt, but which gave millions to liberal politicians, and which was formerly headed by Bush’s last Treasury Secretary.

It’s not clear whether the government will negotiate with banks, or follow normal contractual provisions, as to the rate of conversion, or whether it will use financial pressure. Many healthy banks were strong-armed into accepting TARP bailout funds in the first place, so that banks that really needed a bailout would not be stigmatized by accepting the funds. Now, the government doesn’t want them to be allowed to return the unnecessary funds in order to escape micromanagement of their business practices. Nor does the Administration seem to have an exit strategy to sell shares when the economy recovers, to keep banks from being subject to destructive political meddling and corruption, the way parastatal companies long were in Italy.

As the New York Times notes, after converting its preferred stock into common, “The Treasury would also become a major shareholder, and perhaps even the controlling shareholder, in some financial institutions. That could lead to increasingly difficult conflicts of interest for the government, as policy makers juggle broad economic objectives with the narrower responsibility to maximize the value of their bank shares on behalf of taxpayers.”

Freddie Mac offers a cautionary tale of what happens when the federal government takes over a financial institution. After federal regulators took over failing mortgage giant Freddie Mac, they didn’t stop its risky lending practices. Instead, they ramped up its risk-taking, making it run up even bigger debts at taxpayer expense to try to artificially pump up the economy. They made Freddie buy countless risky mortgage loans. Recently, the Obama Administration forced it to incur $30 billion in losses as part of the administration’s bailout for irresponsible mortgage borrowers, which caps mortgage payments for even high-income borrowers at a ridiculously low level. The Obama Administration tried to prevent Freddie Mac from even disclosing these losses in the financial disclosures it must make to investors under the securities laws.

I was a huge critic of GSEs like Freddie Mac and Fannie Mae. CEI President Fred Smith publicly criticized their risky practices for years. Congress ignored his prophetic warnings about the risk they posed to taxpayers. But federal regulators have been so reckless that they have managed to make matters even worse at Freddie Mac.

Obama’s car czar, Steven Rattner, is pressuring banks to satisfy the Administration’s costly political goals at the expense of shareholders and taxpayers. As Michael Barone notes, “The banks that have received federal TARP funds—some unwillingly—were told by government car czar Steven Rattner that they must accept 15 cents on the dollar on some $7 billion (face value) of Chrysler bonds. They professed shock and refused.” The reason for this demand is that absent such concessions, Chrysler won’t be taken over and bailed out by Italian carmaker Fiat unless the UAW union is willing “to give up some of the supergenerous health care benefits and supergenerous pension arrangements that the UAW has extracted from the U.S.-based automakers over the years.” Rattner, a major liberal donor, wants to keep such cost-cutting from happening at all costs, in order to benefit the staunchly liberal UAW — even though doing so will cost U.S. taxpayers billions.

Given its poor track record of financial management, such as record deficits, there is little reason to believe that the Administration can run banks better than their current managers, however mediocre. The Administration is spending $800 billion on a stimulus package designed to revive the economy, but the Congressional Budget Office says the “stimulus” will actually shrink the economy “in the long run.” And Treasury Secretary Geithner has a history of bungling responses to past economic crises, such as his role in the destruction of Indonesia’s economy in the Asian Financial Crisis of the 1990s.