Geithner to make power play before Congress today

It’s going to be a long day on the Hill as Treasury Secretary Tim Geithner outlines his plan to toss capitalism out the window. For some time, I have heard certain Republicans warn us of the Obama administration’s desire to increase the size and power of the government. Well, as much as I hate to admit it; Geithner’s scheduled proposal today to Congress is certainly evidence of that. Though this is obviously a reactionary response to the current economic crisis; the requests for regulations and mandates have clearly crossed the line. The thought of putting that much power in the hands of a Cabinet member scares the hell out of me.

According to an article in the Washington Post (see http://www.msnbc.msn.com/id/29887343), this proposed plan is the most aggressive since The Great Depression. The focal point of Geithner’s argument to Congress (no doubt at the behest of President Obama) is the necessity for the government to assume the responsibility of imposing regulations and mandates on ALL large financial institutions. Bid a fond adieu to our long history of the laissez faire approach to business; the foundation of capitalism.

Although President Obama alluded to the need for additional oversight in other financial sectors other than banking; I never dreamed it would be of this magnitude. Among the proposed mandates is to pay workers based on seniority and eliminating bonuses for what they will deem as short-term gains. Does this include the elimination of commissions on sales as well? How far do they intend to go? This will all be monitored by a specified government agency. Many experts predict that the Federal Reserve will be the likely choice. Don’t they answer to Geithner? This is a man who has yet to fill key positions in the Treasury; among them a Deputy Secretary.

Along with the previously mentioned proposals; Geithner is asking for the right to seize any company that he feels has put itself in danger due to risky investments. Doesn’t the government have enough on its plate in regard to the economy without adding to it by assuming the management of large financial institutions? As part of the plan, the FDIC would take over the management of these corporations. FDIC chairman Sheila C. Blair is a strong proponent of this plan citing the FDIC’s record of salvaging financial collapses. And yet; not one instance was given. Also on board and scheduled to testify today is SEC chairman Mary Schapiro-it seems they all want a piece of the pie.

I have not been asleep for the past few years so I am aware of the state of the economy. However, to completely restructure, or eliminate our capitalistic system seems a bit drastic to me. It seems that Geithner’s power play may be an indication of the lack of faith the Obama administration has in its own plans. I pray that isn’t the case.

Geithner was quoted as saying: “Our plan will give the government the tools to limit the risk-taking at firms that could set off cascading damage.” It seems a little late to close that barn door. Beware the wolf in sheep’s clothing.

The song remains the same!

Throughout the week, we have been bombarded with news of the bonuses given to employees of AIG. Though I will certainly address that; there are a few other details that remind us that “change” is nowhere in sight. Today, the deficit soared to $1.8 trillion while the California unemployment rate rose to 10.5%, it’s highest since 1983. One can only imagine what those stats are going to do to the market today. My original optimism is slowly waning. All I see is business as usual. The promise of Congressional oversight and the numerous bailouts and stimulus plans have, so far, accomplished zip. I have preached patience and will continue to do so but there are those in key positions who are performing as if they took a seminar put on by the Bush administration.

I am referring to Treasury Secretary Geithner and Democratic chairman of the Senate Banking Committee, Sen. Dodd of Connecticut. These two misfits have more to answer for than those greedy suits at AIG. Dodd, the highest ranking member of banking oversight community, claims that he had no knowledge of these bonuses. If that is true; then he truly is an idiot. I actually hope that he’s lying so he can blend in with the rest of them instead of being perceived as a moron. Treasury Secretary Geithner, an old Wall Street boy himself, seems to have shown complete indifference to the situation. Since the Fed now owns 80% of AIG, where was its fearless leader while this travesty was unfolding? Thanks in part to these two do-nothings; it is President Obama who now has egg on his face, and justifiably so.

AIG-where do I begin? First and foremost; I question the moral turpitude of any individual associated with AIG who accepted these bonuses because there were those who declined. $165 million to a group of people who are as responsible for our economy’s demise as anyone. The present and past CEOs of the company are now playing the blame game as far as who is responsible for these rendition bonuses. Who gives a damn who is responsible for creating this system-flush it!! While all this is happening, Geithner and Dodd both confess to being concerned about the possible legal implications of refusing to give out these bonuses. Who the hell are they going to sue? The government is the “chief stockholder.” Which brings me to my next question. As “chief stockholder”, shouldn’t we have had a say in the dispensing of these bonuses? Apparently not since no one stepped up to the plate. Oh yeah-I forgot that they were unaware.

As previously stated; Obama is now the one who looks the fool. His only salvation seems to be the House vote to levy a 90% tax on these bonuses. Now if only the Senate would step forward and impose a fine for misappropriation of funds. Though this may sound counter-productive; the way things are going this may be our only way to get any of our money back. I apologize for the tone of this article but I am pissed.