Treasury Secretary Henry Paulson should be placed behind bars. He is bailing out of the bailout, yesterday announcing his intention to provide funds to financial institutions holding credit card and student loan debt obligations. (See New York Times ) Congress is not in session and the lame-duck President is... well, ducking; and not one single step has been taken to put in place audit and oversight for the first half of the $700b bailout package. (See Washington Post )
Citigroup shares will soar on the news that they'll be getting more billions on top of the $25b they received in the first of the handouts to banks. You may remember from previous posts that it was Citigroup lobbyists who pushed for the Gramm-Leach-Bliley Act of 1999, removing regulations and restrictions that set the stage for the derivative market in the first place. Citi lobbyists steerheaded the more than $100 million in incentives to congressmen and senators to get the bill passed; thus enabling Citibank to merge with Travellers Insurance to form Citigroup. This same Citigroup issued 40% of America's credit cards and 60% of American student loans.
If this isn't the biggest fraud in history, then what is? There is little hope that Obama and the Democrats in the House will be able to do anything to get the economy on anything like an even keel. The only hope for sanity in all this is for the G20 to play America's game and begin cashing in their US Treasury bills and dumping their US dollars. After all, America can't go to war against everybody.