Saturday, July 25, 2009

How to fund Health Care reform: send more money to the banks

a href=""Dana Garrett/a is currently trumpeting the supposed 23% return the US government received on its bail-out investment in Goldmann Sachs:br /br /blockquotespan style="font-style:italic;"Boo hoo for you conservative Republicans and Libertarians. Instead of the dire consequences you predicted, the bailout is already starting to work for both the companies it helped and the taxpayers. Goldman Sachs is ALREADY giving us a 23% return on our tax dollars. We are ALREADY making a good return on the bailout--just like what happened in Sweden./span/blockquotebr /br /This is GREAT NEWS! Because, you see, it means we now have a funding mechanism for Health Care reform: we just keep sending bail-out money to America's /br /It will work like /br /First (h/t a href=""ABC/a) we spend $23.7 Trillion on the Troubled Asset Relief Program:br /br /blockquotespan style="font-style:italic;"span style="font-weight:bold;""The total potential federal government support could reach up to $23.7 trillion," /spansays Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a new report obtained Monday by ABC News on the government's efforts to fix the financial system./span/blockquotebr /br /If the Goldmann Sachs model works, the banks will then return that bwith 23% interest/b, meaning that we'll get back span style="font-weight:bold;"over $29 Trillion/span, which gives us, say, $3 Trillion to spend on health care and another $2 Trillion in case we need to fight any more really pressing /br /Now I know there are nay-sayers who would point out that Goldmann Sachs only achieved this amazing return through the concatenation of a href=""infiltrating the government/a:br /br /blockquotespan style="font-style:italic;"Indeed, Goldman’s presence in the [Treasury] department and around the federal response to the financial crisis is so ubiquitous that other bankers and competitors have given the star-studded firm a new nickname: Government Sachs. br /br /The Times points out that Goldman alums include:br /br /* Former treasury secretary Hank Paulsonbr /br /* Paulson's bailout chief Neel Kashkaribr /br /* Interim Treasury investment officer Reuben Jeffreybr /br /* Key Treasury players Dan Jester, Steve Shafran, Edward C. Forst, and Robert K. Steelbr /br /* Key New York Federal Reserve players Stephen Friedman (head of the New York Fed board of governors, who sat on Goldman's board and owned a substantial stake in Goldman while he was making official decisions - and see this), William C. Dudley (head of the New York Fed's unit that buys and sells government securities), and E. Gerald Corrigan (charged with convening a group to analyze risk on Wall Street)/span/blockquotebr /br /And from a href=""some truly creative accounting/a:br /br /blockquotespan style="font-style:italic;"While the propaganda-machine is trumpeting the huge “profits” reported by Goldman Sachs for the second quarter, we should not forget Goldman's shady maneuver to create an “orphan month” - which was not included in any quarterly report – where the company hid billions in losses. None of these factors are supportive of the official posturing of company officials that Goldman Sachs has put the collapse of Wall Street's multi-trillion Ponzi-scheme behind it./span/blockquotebr /br /Or the fact that GS received additional billions in bail-outs funneled indirectly through AIG thanks to former Treasury Secretary Paulson, who also used his influence to shit on GS rival Lehman Brothers at the same time [from a href=""HuffPo/a]:br /br /blockquotespan style="font-style:italic;"Goldman this week defended itself by reiterating the fact that it received US$10 billion in TARP bailout money last year to avert bankruptcy but has repaid that amount in /br /That is true but that's only a fraction of the /br /span style="font-weight:bold;"Goldman received an estimated three times' more, or US$30 billion, in an indirect bailout which was funneled through bankrupt insurer AIG./spanbr /br /Washington bailed out AIG's counterparties, to whom it owed hundreds of billions, because AIG had sold to them unbacked credit default swaps (a form of insurance on bond values). Goldman was not only ahead of the queue in collecting its IOU, but is reported to have gotten 100 cents on the dollar to /br /Goldman was made whole even though it is arguable that it was imprudent to buy these swaps which were not actuarially approved and had no capital behind them as insurance products are supposed to. Even so, Goldman and AIG's other foolish customers got backstopped for lousy business /br /The point of all this is that Goldman Sachs cannot argue that the proceeds it received from the AIG rescue did not constitute an indirect bailout any more than can auto parts makers who are saved by Detroit's /br /Paulson should have never been appointed in the first place because he had conflicts of interest after pocketing hundreds of millions a handful of years before as CEO of Goldman /br /But he was. So having been put there, he should have recused himself from any fiduciary dealings involving public funds aimed at replenishing the coffers of his old firm and buddies that still worked /br /Likewise, he should have recused himself from dealing with his and Goldman's arch rival, Lehman Brothers. But he didn't and span style="font-weight:bold;"handed over the keys to the investment banking kingdom to Goldman and refused to help Lehman./span By so doing, he turned the crisis into a full-blown catastrophe./span/blockquotebr /br /None of that matters, however, Dana Garrett assures me [and Tyler]:br /br /blockquotespan style="font-style:italic;"One issue is the need for reform. Granted. But how does that negate the FACT (the 2nd issue) that the US taxpayer is getting a 23% return on its investment? That's the fact that you don't want to acknowledge because it runs contrary to your doctrinaire belief that the government can only fail when it involves itself with the /br /Sorry, but you were /br /You are implying the US didn't get a 23% return. Oh, is this yet another example of more secret knowledge you have, Tyler, (you and some other conspiracy theorists) that the MSM doesn't have? Let me guess. This is all a lie. The US really isn't getting this return, right? /br /So what are these illegal and--this is funny coming from a Libertarian--unethical business practices that GS is engaging in post bailout, Steve. You make these bald assertions w/o offering one scintilla of proof./span/blockquotebr /br /Dana's obviously right: all the government needs to keep doing is ploughing money into the banks [under the direction of iGovernment Sachs/i] in order to reap those 23% interest rewards and pay for everybody to have health /br /Yeah. And the Obama administration doesn't appoint lobbyists to key positions or extend Bushco arguments about gay marriage, wire-tapping, or the right to detain people indefinitely who have been found innocent by the /br /It's just my Libertarian myopia that keeps me from understanding how this all works out.div class="blogger-post-footer"img width='1' height='1' src=''//div

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