Robbing the public till in broad daylight

The bailout of Wall street was presented as the only way to "save" the global economy.  The trouble is, anyone who looks closely can see it was simple robbery.

Testimony Reveals Need for Thorough Investigation of AIG Deals 

Thursday, 01/28/2010 - 2:52 pm by Bill Black

William Black calls for a deeper investigation of the conflicts of interest that shaped the AIG bailout.

The truly extraordinary disclosures were that Paulson, Bernanke, and Geithner all purported to have had no involvement in one of the most expensive decisions in history — the decision to pay 100 cents on the dollar to the least deserving of recipients (and who, if Geithner’s testimony were to be believed, did not need to receive that largess) — and the unprincipled and indefensible decision to try to get AIG to cover up that fact and the beneficiaries of that largess. Indeed, Bernanke testified that he entered into an oral recusal (such recusals have to be put in writing under Office of Government Ethics rules) that meant that at the most critical time in financial regulation in 80 years an “acting” official was left in charge of all regulatory decisions at the NY Fed. This is bizarre because he was one of the rare senior public officials that did not have a clear conflict of interest due to their Wall Street ties.

Those senior officials, e.g., Paulson, that had clear conflicts of interest did not recuse themeselves and Goldman Sachs was the biggest single recipient of what two Fed Members aptly labeled a “gift” from the taxpayers. Worse, the acting Fed President reported to the NY Fed Board and its Chair, Stephen Friedman (of Goldman), who purchased a large block of Goldman stock in December 2008. (Rep. Issa has charged that this indicates he was trading on inside information that produced a large investment profit.) This was such an outrageous conflict of interest that other regional Fed banks were outraged. Worse, the Fed staff approved Friedman’s conflict of interest. Still worse, he did not inform the Fed of his large purchase of Goldman shares in December 2008 (just after it received $12.9 B from the taxpayers (via AIG)). more