Obama and Democrats Try To Sneak $100 Billion Stealth Bailout To European Banks
There is an update. Details are inside at the bottom of the original story.
Surreptitious and sneaky is the plan. Before the left attacks me, read what liberal blogger Jane Hamsher of FireDogLake thinks about the Democratic ploy to attach a $100 billion debate-free IMF credit line to a war supplemental funding bill for Iraq and Afghanistan. Take a minute to check out the citizen whip count tool they constructed to help defeat the bill. Nice work.
Apparently the $35 billion in AIG payouts to over-leveraged Euro banks wasn't enough for Obama who has championed borrowing the $100 billion from your kids and the Chinese in order to give it to the IMF, so that they will rescue European banks who invested unwisely in Eastern Europe. Even Iran and North Korea could potentially be eligible for IMF funds. Luckily, the Republicans are out in force against the amendment, and at least 35 Democrats have broken from leadership and now oppose the bill.
Think Latvia, the Ukraine and Poland, cuz that's where many of these leveraged bets were made. Obama calls it supporting a global stimulus. We call it bullshit. The IMF does not stimulate anything. When they show up, it's all about austerity: spending cuts and interest rate hikes. These funds will go directly to ailing European, over-leveraged financial institutions to buttress their im-balance sheets against future writedowns. Put Societe General, Credit Suisse and Deutsche Bank into your mind's eye, and you have a good idea where your borrowed money is headed.
These are strange times indeed. I am unable to articulate the frothy menagerie of nonsense that would lead the Democratic leadership to actually conclude that this is a smart decision. The American taxpayer and our Treasury are completely tapped. There is no more money. This decision to borrow an additional $100 billion to buttress European mistakes should not be confused with intelligence.
The final keelhaul was the calculated choice to attach the IMF largesse to the war funding supplemental, which by rule allows for no debate of amendments. Convenient for Pelosi and Reid, cuz there isn't a chance in hell it would pass on its own.
DailyBail
Update
It looks tonight as though the Obama administration has succeeded in securing the votes to get the war funding supplemental legislation passed. From the Financial Times tonight:
Congress is this week expected to approve Barack Obama’s request for an extra $108bn for the International Monetary Fund, but it will come at a political price after weeks of grandstanding, messy compromise and horse-trading.
The request, tacked on to a $100bn (€71bn, £60bn) war funding bill, provoked a backlash in Congress as Republicans and some Democrats balked at what they called another bail-out, this time for foreign countries and banks. The administration had thought putting it in the war funding bill would speed its passage: which Republican would vote against money for US troops? But the move backfired and the administration spent last week scrambling for votes.
So why has the president spent so much political capital trying to protect the IMF amendment, when he needs all he can get to enact his ambitious domestic agenda? In part, it is about his international standing. Mr Obama has called for the IMF’s members to triple its firepower to help it combat the global downturn, and promised at April’s Group of 20 meeting the US would contribute an extra $108bn, $100bn in the form of a credit line. He would face humiliation if he did not deliver.
But from the start, it looked a tough sell at home. “The most plausible explanation for the request – and the lack of proper debate and Congressional process – is that the funding would be used to bail out private European banks with US taxpayer money,” wrote Dennis Kucinich and Bob Filner, two Democratic congressmen, in a letter to their colleagues.
The administration first tried to win the intellectual argument. The Treasury put out a “fact sheet” explaining why the IMF needed the money. It also released a letter in support from a bipartisan group of big guns including Hank Paulson, Henry Kissinger and Condoleezza Rice, former secretaries of Treasury and state.
However, the Republicans would not budge. They painted the war bill strategy as a cynical attempt to use US troops as leverage. They said the IMF money could end up going to countries associated with terrorism, such as Syria and Iran.
To win over a crucial group of liberal Democrats, it killed off an amendment that would ban the release of photos showing US military personnel abusing detainees. This brought the votes it needed but upset moderates and conservatives, who agree with Mr Obama that their release could spark retaliation against US troops.
There was also a compromise on Guantánamo inmates, who will be allowed to enter the US for trial – with Congress permission – but not to stay.
Critics say the administration played fast and loose with the legislative process over the IMF money and deserved to get burned.
“Unfortunately, rather than doing the right thing – stripping out the IMF money and passing a clean troop-funding bill – they chose to cater to the left of the left,” said Michael Steel, spokesman for John Boehner, Republican leader in the House. “It’s certainly not the way the president promised to govern during the campaign.”
Reader Comments (14)
http://en.wikipedia.org/wiki/Keelhauling
If the Republican party knew what they were doing (they don't) they'd be talking bailouts and taxes all the damn time. Their attempt at this so far has been pathetic. If I understand it correctly, Rep. Alan Grayson (D-FL) won his election this fall mainly because he opposed the bailouts and his opponent voted for them. Forget abortion and gay marriage, any politician that takes up our cause will win if they play their cards right.
You are absolutely, without a mf-ing doubt correct. As Clinton and Carville would have said, "It's the Bailouts, stupid!"
Daily Bail,
I don't know if you plan on doing t-shirts and coffee mugs and whatnot, but this^ would make one hell of a slogan.
Wake up and start working and do not expect other people to pay for your misdoings. For a very long time US has enjoyed a better living standard through the fraud of printing dollars (when 80% of the paper is outside the US), devaluating without feeling the bite, because the rest of the world is paying your bills. Stop crying and change your fraudulent system, before it will be too late. Read what your founding fathers wanted for your country and how you managed to screw it up.
Why so much hate?
http://dailybail.com/home/can-we-party-like-its-1776-and-just-start-over-thomas-jeffer.html
What would California look like broken in three? Or a Republic of New England? With the federal government reaching for ever more power, redrawing the map is enticing, says Paul Starobin.
http://online.wsj.com/article/SB10001424052970204482304574219813708759806.html
"If your Government does not step in to remedy somehow the US sponsored fraud, the world would turn the back on you, stop using the dollar which you print like toilet paper and your country will colapse."
Uh, like you said later in your post, the rest of the world also holds U.S. treasuries, and in greater quantity than they hold American bank and mortgage paper. If the U.S. government insists on stepping in and spending zillions of dollars to prop up this shady paper, treasuries will tank in value, the countries who hold them will turn their back on us, and stop using the dollar, which we print like toilet paper, and our country will collapse.
Other nations need to pick their poison already. Either you can have your bank/mortgage bonds propped up, OR you can have your treasuries' value preserved. Not both. If a nation holds X in bank or mortgage paper, and Y in U.S. treasuries, where Y > X, then their preference should be obvious.
Now, if by "your Government does not step in to remedy somehow the US sponsored fraud,", you mean that we should craft and/or enforce regulations to stop the fraud from happening in the future, I totally agree. But so far, the bulk of government intervention has been to throw money -- money it doesn't even have -- at the problem.
"Wake up and start working and do not expect other people to pay for your misdoings."
Maybe something is being lost in the translation here, but I am not asking for anybody to pay for my misdoings. I am willing to take my medicine, I do not want a bailout nor do I want to bailout a bunch of morally corrupt banker/politician/broker/dealer/insertwhoever. I say let them all fail, they made the bets not me,and let the chips fall where they may.
I work my ass off to provide a better future for my family. What is taking place right in front of our eye's is bulls@#$. From what I have seen, everyone on this site is trying to do something, so get off of the soap box, I dont come here to be preached to.