Obama slams companies for squandering bailout funds

[sabra]

Source: CNN

WASHINGTON (CNN) — President Barack Obama had harsh words Friday for
companies that have engaged in lavish, frivolous spending while receiving
taxpayer dollars from the $700 billion federal bailout package.

During a White House meeting with the joint congressional leadership, the
president said he had seen reports “over the last couple of days about
companies (receiving) taxpayer assistance (and) then going out and renovating
bathrooms or offices or in other ways not managing those dollars
appropriately.”

Moving forward, the president said, it would be necessary to pass reforms
ensuring the kind of “oversight, transparency, accountability that’s going to
be required in order for the American people to confidence in what we’re
doing.”


Read more: http://cnnwire.blogs.cnn.com/2009/01/23/obama-slams-companies-for-squandering-bailout-funds/

[riqster]

1. Transparency is a good thing nt

[Jambalaya]

43. Cantor ain't Kosher

Bank Employing GOP House Leader’s Wife Got Bailout Bucks
by Aram Roston, Special to ProPublica and Paul Kiel, ProPublica - January 23, 2009 1:49 pm EST


Rep. Eric Cantor (R-Va.) holds up House Speaker Nancy Pelosi's statement while speaking to the media after the vote failed on the bailout on Capitol Hill on Sept. 29, 2008. (Mark Wilson/Getty Images)House Republican Whip Eric Cantor, a rising star in the Republican party, has been a prominent voice demanding accountability in how the government doles out hundreds of billions for bank bailouts.

"I think most American taxpayers now are sort of scratching their head," Cantor told CNN in December, "wondering when all this bailout stuff is going to end. And probably thinking, 'You know, when is my bailout coming?'"

This Thursday, Cantor cast a high-profile vote opposing release of another $350 billion in bailout funds. Unpublicized until now was a recent development: The Treasury Department used $267 million of taxpayer funds to buy preferred stock in a private banking company that employs Cantor's wife.

Read more...

[riqster]

44. "Unpublicized until now"

Better late than never!

[shraby]

2. At last.......a president who reads the news!!!

[HopeHoops]

8. You could have ended that sentence with the word "reads".

[Soylent Brice]

21. ZING!!

[Javaman]

23. LOL so true, so true!! LOL nt

[Stargazer09]

26. You took the words right out of my mouth! n/t

[lunatica]

41. Could have ended it with President...

At last, A President!

[nc4bo]

3. It needed to be said. I wish they would have direct quotes of exactly what he said though

then it should be aired on the teevee machine loudly and frequently. Think endless loop.

Oversight and accountability indeed!

[jfkraus]

4. Treat the disease, not the symptoms

My letter to Maria Cantwell and Patty Murry...


Dear Senator:

Please do not give bail-out money to companies that do not change their upper management. It is very simple if one uses a medical metaphor.

These failing companies have a cancerous disease. The financial condition of these companies is only a symptom of that disease. Treating only the symptoms by giving them more money will not cure the disease. The cancer is the upper level management-- the people running the companies who are making the poor decisions. John Thain of BoA being the latest in a long list of examples. How many times are you going to allow these people to get away with this stuff?

Treat the disease! Every CEO and every President of every company that receives bailout money should resign, removed like the cancers they are! And they should be replaced by someone competent. Period!

Thank you.

[lonestarnot]

6. Excellent letter!

[customerserviceguy]

10. There's only one problem

changing management is just like a game of musical chairs, only nobody takes away a chair before the music starts up. The real solution to this is to use aggressive tactics to utilize the tax code to enforce financial discipline that circle-jerk boards of directors (the same individuals serve on each other's boards) cannot seem to muster.

You can disallow deductions for wasteful spending, once you put in rules about what constitutes it. That usually gets their attention.

[notadmblnd]

11. The only problem with this is; they tend to only shuffle positions

Hasn't anyone noticed that it's always the same players in a game of economic Musical Chairs?

[Moostache]

13. You expect honor among thieves?

I look at it like this:

(full disclosure - I am a cancer survivor - renal cell carcinoma, surgically removed July 2008, confirmed cancer free September, October and December 2008, next screening is in August 2009).

The first step in treating this paricular financial system cancer should have been to surgically remove the tumor - ie. fire every board member, every director and every executive manager - anyone who was in charge of decisions that went beyond the type of stationary to order should have large boot marks on the backside of their $5,000 suits. If you leave a portion of the tumor behind - ANY portion, you are still very likely to have health problems in the future and may die of it eventually....and our financial system pretty much skipped this kind of radical surgery, then avoided starting the chemotherapy needed (see step two below) and went right on to placebo treatments in the hope of a miracle cure from a witch doctor....

On a personal level, I would not stop at just removing the tumor - I would kill it - ie. - I would punatively fine those who led to, built and benefitted disproportionally from this entire financial implosion....not a single bank executive whose business faltered and floundere in the past 5 years would have two nickels to rub together unless they earned them in the prison commisary or making license plates!

Madoff? Fuld? Thain? Paulson?

Hell...that is a pretty good start to an all-star chain gang right there and if we seized all of their amassed stolen assets (and I mean EVERYTHING - from cash and real estate to tangible physical assets like houses, boats, cars and jewerly, right down to any gold fillings in their teeth!) in the process, we might be able to pay for some of the legal work necessary to bring them to justice at the same time!

But, keeping with the cancer anaolgy, you do not remove a tumor from one patient only to turn around and implant it in another....these disgraced men should be penny-less, and barred from ever again working in the financial industry or holding any position of authority or management in any other company ever again....they have shown themselves to be carcinogens and should also carry a warning label on their resume forever:

WARNING: The attorney general of the Unites States has determined that hiring this individual is hazardous to the health of your business and is a fatal carcinogen. Use at your own risk.

The second step would be intensive chemotherapy to kill off any remaining malignancies and to ward off spread of the disease and prevent recurrences - ie. MASSIVE re-regulation of financial companies and MAJOR new legislation preventing two things: 1) the phenomenon of "too big to fail" and 2) curtailing the use of bonuses as a compensation tool in the industry and thus eliminating the obsessive-compulsive impulses to forget long-term stability in favor of short-term illusory gains on paper only at the cost of the long term health of the body.

We have not been interested in a cure though,(or we have been paralyzed by the kind of fear that makes some people want to avoid a diagnosis to remain in denial when they realize something is wrong); and the industry has remained anything but interested in behavioral modifications; which would be absolutely necessary to allow it to survive or thrive, even IF the cancer was removed...

When I learned of my cancer, I quit smoking that very minute (May 5th, 2008) and have not touched a single cigarette since. My condition was discovered early enough that a complete removal of the kidney was not necessary and a partial removal was possible, allowing me to keep more than 75% of the kidney. I fear that the finacial system is too sick for them to be able to keep anything remotely like that much of their orginal function...

I knew that the only way to give myself ANY chance was to quit doing the destructive things that led to my condition (smoking was certainly tops on THAT list) and agressively pursue any means possible to remove the existing damage from my system. In contrast to my personal situation, I see the financial system as having learned long ago that it was sick and instead of facing the pain all at once, coming clean and in effect quitting its vices cold turkey, it doubled down and go into even more ruinous behaviors (think of sub-prime loans as cigarettes and Credit Default Swaps and Collaterallized Debt Obiligations as heroin and you may be on the right track - sort of...)

I have been blessed with a new life and a second chance due to early detection, successful surgical intervention and preventative behavior modification. My cancer is gone now, and I continue to do all the things mecessary to keep it that way. Our financial system's cancer is still raging and has metatastized into a critical condition threatening systemic failure and death. The least we could do is TRY to cure the patient here...

[jfkraus]

Well said!

[Laelth]

17. Wow. Great post. Thanks. n/t

:dem:

-Laelth

[Jefferson23]

31. Welcome Moostache to DU and best wishes for your continued good health.

[glinda]

49. Agreed! They should give up everything. I have been saying that.

They have no right to their finances and profits when people are loosing theirs. They have no right to my money when I need it and they go have a spending spree. I will not settle anymore for this bull.

[BlancheSplanchnik]

I LIKE oversight!!

the last 8 (and more) years of the wolves guarding the hen houses shows how great that works.....

the Adults are in charge now! Phew!

[peacetalksforall]

5. Now, follow through, President Obama. .

[bahrbearian]

39. He did , he shook his finger at them after he said it.

[Lugnut]

7. Make them pay it back.

Let them fail if need be.

[tbyg52]

46. Make them account for every penny.

Pay back anything that was not related to the purpose they were supposed to be using it for, which is probably most of it.

I don't see that that $350B helped a darn thing except fat cats.

[grannie4peace]

9. can we press charges against them ?--it is stealing!!

[AtomTan]

29. Well, the Bush admin demanded the money with no strings attached and no oversight.

And our Democratic Congress gave it to them. With a cherry on top.

[bvar22]

12. Strong Words.

I still have some hope for Obama.

I have no faith in these people.

NOW we have Your Children’s Money too !!!
And there is not a fucking thing you can do about it!
Now THIS is “Post-Partisanship” !
Better get used to it!!
Hahahahahahahahaha!

[wroberts189]

14. THANK YOU !!!!!!! its about god damned time n/t k&r

[wroberts189]

16. One more thing. These bastards stole from the meek, the sick, the weakest of us all.

prosecutions for them all.

[natrat]

15. thank you and fuck byran dorgan and chris dodd for writing new bills with no oversight-whores

[Froward69]

18. Obama has me

Mellowing out so much... god god damn I haven't been this relaxed in 15 fucking years!

Good man, great president! He is paying attention and CARES!

Nothing what so ever to worry about.


I am hoping for an early spring.


AAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHH

[WriteDown]

19. Hahahhahahahaha....

So here's another 350 billion??????? Here's an idea, how about no more bailouts?

[SOS]

22. Use the money as Michael Lewis, rather than Goldman Paulson, suggests:

How to Repair a Broken Financial World
By MICHAEL LEWIS and DAVID EINHORN

"There are other things the Treasury might do when a major financial firm assumed to be “too big to fail” comes knocking, asking for free money. Here’s one: Let it fail.

Not as chaotically as Lehman Brothers was allowed to fail. If a failing firm is deemed “too big” for that honor, then it should be explicitly nationalized, both to limit its effect on other firms and to protect the guts of the system. Its shareholders should be wiped out, and its management replaced. Its valuable parts should be sold off as functioning businesses to the highest bidders — perhaps to some bank that was not swept up in the credit bubble. The rest should be liquidated, in calm markets. Do this and, for everyone except the firms that invented the mess, the pain will likely subside."

http://www.nytimes.com/2009/01/04/opinion/04lewiseinhornb.html

[1gobluedem]

20. About bloody time

After the way the auto companies were scolded, lectured, and all but put in stocks over their request for a bridge loan, and the conditions it came with, it's about time someone did something about the mismanaged funds at the financial companies.

[firedupdem]

24. I'm so happy he's refused to live in a bubble. He lives in the real

world and addresses valid issues. That's my President!

[dana_b]

25. rock on!!

a true leader. What's amazing is that it takes one strong leader to point the obvious out and then all the others (most congressional leaders) nod their heads in agreement. WHy couldn't they have spoken up before he took office?

[Deep13]

27. Presidential awesomeness reaches new heights. nt

[Dont_Bogart_the_Pretzel]

28. To all those Rethugs out there... The party's OVER ! ! !

[lelgt60]

30. To nitpick a little about a post I fundamentally agree with:

You said:

"anyone who was in charge of decisions that went beyond the type of stationary to order"

I think this is clearly too broad. Banks are made up of lots of different groups, many who had nothing to do with the problems that caused the fundamental failure.

1) Remove the tumor - as little as possible of everything else.

2) Keep testing for recurrence...forever.


That would, of course, still mean getting rid of most of the board and officers (maybe not the CTO)

[pleah]

32. That's great, but, are you going to throw a few of them in jail for theft of taxpayers money?

:shrug:

[RCinBrooklyn]

33. It would be better to simply not bail them out.

[Exen Trik]

34. I'm glad he's going to do thing's differently, but...

What can we do about all that squandered money already given to them? Institute a "misappropriated bailout dollars tax"? Something along the lines of if they didn't put it back into the economy, we'll want it back?

[ItNerd4life]

35. I blame the government, not the businesses!

Why did the government waste this money by giving to the businesses without having rules in place?

How many more businesses are they going to give money to that will just go and waste it?

You give money away to anybody, (people, business, not for profits, etc) without any rules I guarantee many if them will waste it.

[Fire1]

37. Please note, this was done PRIOR to the current admnistration,

so that horse has already left the barn.

[antimatter98]

36. These are your Republican business men, looting the country.

This is what the Republican party stands for: dishonesty, looting the Treasury,
cheating American workers, and going back to Congress for more hundreds of billions
of dollars while the individual American in trouble gets only collection notices,
shut off utilities, unemployment notices, and foreclosure notices.

Why is Congress allowing this disparity?

Are American workers just sea barnacles
that get scraped off the hull of American capitalism?

Or do workers count for something?

[bdamomma]

38. this is who President Obama was talking about.

http://abcnews.go.com/Blotter/story?id=6710368&page=1

Report: Merrill Lynch CEO Spent Over $1M to Redecorate Office
Before Accepting Bailout Billions, Exec Said To Have Hired Decorator-To-The-Stars; Purchased Luxury Furnishings

[Castleman]

40. This jackoff should be arrested,

and then tried on charges of theft from the people of the United States. He'd be convicted too, in a jury trial, then send the bastard to prison, and not some white collar country club, send him to fucking San Quentin, and every single prisoner who has family on the outside that are suffering can have their way with this pile of shit, and literally do to him what he's been figuratively doing to US for the last 8 years. I think after 20 or so executives and CEO's get gang raped in the laundry room 50 or 60 times, it ought to scare the rest of them into shape. We've got justice under control, now let's see it in action.
I'm trying to figure out how this Madoff character isn't in the slammer, he's been hiding his ill-gotten gains left and right, and the fucker's still free? WTF???? 50 fucking billion dollars? And the fucker gets to sleep in his mansion every night? If I stole a thousand bucks out of the safe at work, I'd never see bail because I don't have the cash for it, but this prick gets to eat caviar while awaiting trial?

To quote the incredible Little Steven:
"You know my baby can't walk the streets at night
Can't get no protection, you know that ain't right
I'm getting tired of paying for shit I never get
Somebody promised justice
But he ain't delivered yet!"

OK, Obama, how's about some justice for the American people??

[lelgt60]

42. Absolutely!!! But, at least he was fired (small recompense) n/t

[Jambalaya]

45. From the Gospel of St. George (Carlin)

The real owners are the big wealthy business interests that control things and make all the important decisions. Forget the politicians, they’re an irrelevancy.

The politicians are put there to give you the idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything.

They own all the important land. They own and control the corporations. They’ve long since bought and paid for the Senate, the Congress, the statehouses, the city halls. They’ve got the judges in their back pockets. And they own all the big media companies, so that they control just about all of the news and information you hear. They’ve got you by the balls. They spend billions of dollars every year lobbying – lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else,”

“But I’ll tell you what they don’t want, they don’t want a population of citizens capable of critical thinking. They don’t want well-informed, well-educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interests. They don’t want people who are smart enough to sit around the kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago. You know what they want? Obedient workers – people who are just smart enough to run the machines and do the paperwork but just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it. And, now, they’re coming for your Social Security.
They want your fucking retirement money. They want it back, so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all, sooner or later, because they own this fucking place. It’s a big club, and you ain’t in it. You and I are not in the big club.”

-George Carlin-..........................R.I.P.

[loudsue]

47. How 'bout prosecuting some of these fucking thieves???

Taking money under false pretenses...etc.?? Something? Accountability?

[Enrique]

48. where are the "harsh words?"

where did he "slam" them?

In that article, they just quote him saying he read reports about them.

[depakid]

50. Hopefully, federal authorities are now pouring over Thain's activities with a fine tooth comb

and when they find illegal acts- will prosecute them to the fullest extent of the law.

Some examples (actuially a LOT of examples) need to be made to ensure this sort of behavior doesn't keep happening in the future.