Elizabeth Warren’s Effort To Track The TARP $

Elizabeth Warren is someone to watch, and not because she has become the “heroine” of Michael Moore’s newest documentary.

“…the real economy is still in a perilous state.”, and “…the middle class became a resource to be pulled from; they became the turkey at the thanksgiving dinner, who could carve off a piece…”

A few money quotes from the entire transcript; Washington Post: Voices Of Power

ROMANO: There’s a wonderful moment when he asks you where the $700 billion is, and you look at him and you say, “I don’t know.” So the question is: why don’t you know?

WARREN: Well, we don’t know where the $700 billion is because the system was initially designed to make sure that we didn’t know.

When Secretary Paulson first put this money out into the banks, he didn’t ask “what are you going to do with it?” He didn’t put any restrictions on it. He didn’t put any tabs on where it was going to go; in other words, he didn’t ask. And if you don’t ask, no one tells. And so we have a system that originally put more than $200 billion into the financial institutions basically saying just take it.

ROMANO: And that money is gone. You have not been able to track where that money is?

WARREN: Well, we don’t know where the money went from the financial institutions.

The big conversation at the time was that the credit markets are frozen; if we put money into the financial institutions, they will start lending it because that’s what they do when they receive money. And you may remember we tend to have forgotten what the name of the program was initially. It was called the “Healthy Banks Program,” because the allegation was Secretary Paulson kept saying, over and over, these are investments in healthy financial institutions, no one needs any subsidy.

And so we put it in on the claim by Secretary Paulson that that money was going to be used in lending to small businesses and consumers and kind of get our whole credit market going again. That didn’t happen.

ROMANO: Do you agree with Michael Moore’s basic premise that capitalism as it is now has destroyed the country’s middle class?

WARREN: Well, I believe that the middle class is under terrific assault. And I don’t want to play this as a capitalism issue.

When we compare middle-class families today with their parents a generation ago  we have basically flat earnings-a fully employed male today earns on average about $800 less, adjusted for inflation- than a fully employed male earned a generation ago. The only way that houses could increase or families could increase their household income was to put a second earner into the workforce, and, of course that’s now flattened out because there aren’t any more people to put into the workforce. So you’ve got, effectively, flat income in this time period  with rising core expenses; housing; health insurance; child care; transportation, now that it takes two cars to get everywhere, two jobs to support; and taxes, because you’ve got two people in the workforce and we have a somewhat progressive taxation system. So that families are spending a lot more on what you describe as the basic nut.

The third leg to the triangle, and that is families, to deal with this, stopped saving and started going into debt.

And the debt side of where families both spend more money and are made much more vulnerable on mortgages, on credit cards, on check overdraft fees, all this side of it, the credit side of it really means that we have a middle class that a generation ago we would have described as solid, secure, dependable. If you could just get into the middle class, you could pretty much count on a fairly comfortable life and all the way through to a comfortable retirement.

That’s been hollowed out. Sure, there are people who are going to make it through just fine, but the vulnerability of families in the middle class has just it has gone up enormously.

11 thoughts on “Elizabeth Warren’s Effort To Track The TARP $

  1. Warren has been a voice in the wilderness since this mess started; the only government official I am aware of that has told the truth consistently about what a mess we’re in and how far south we’re heading.

    To be honest, I’m amazed she hasn’t been silenced by either the Bush or Obama administration.

  2. When we compare middle-class families today with their parents a generation ago we have basically flat earnings-a fully employed male today earns on average about $800 less, adjusted for inflation- than a fully employed male earned a generation ago. The only way that houses could increase or families could increase their household income was to put a second earner into the workforce, and, of course that’s now flattened out because there aren’t any more people to put into the workforce.

    And all of this due to the continuous Fed-induced inflation caused by the monetary policy of funding ever-increasing government spending/debt. Now they are trying to further weaken the dollar against other currencies, which will erode the middle class’ purchasing power even further… assuming you have a job. Those going into retirement will really be sucker-punched.

    Karl at Market Ticker has another excellent article on this very topic:

    http://market-ticker.denninger.net/archives/1502-Wheres-My-Economic-Recovery.html

    This house of cards is so enormously high right now. It’s no longer a question of whether it comes crashing down… only when.

  3. Pingback: Lyn Su
  4. Dug- you pretty much nailed it- “This house of cards is so enormously high right now. It’s no longer a question of whether it comes crashing down… only when.” The only thing I can add is that “THEY” are piling books on top of the already shaky house of cards.

    Only when. Not only have salaries and income gone down, and expenses have gone up, “THEY” are piling more taxes on top, and talking of even more taxes, which will increase basic costs even more. Cap and trade taxes, higher income taxes, mandatory medical insurance taxes, and now a “value added” tax. Is there any thing sane coming out of Washington? I find it hard to believe that no one there has any idea what THEY are doing. I find it hard to believe that THEY can not see that THEY are doing the opposite of what needs to be done. I find it hard to believe that in DC, party loyalty trumps the power of the people so thoroughly, that THEY will vote against all common sense and knowingly destroy the country and economy.

    This only leaves one explanation….conspiracy. If THEY are not loyal to the voters, look at where THEIR loyalties lie…with the money. THEY do not work for us, THEY have a fiduciary duty to the corporation U.S.A.,Inc., not us, and this is the only way to explain the actions this bunch up there takes. A willful, purposeful, intentional course of actions to wind up with the final endgame…a collapse of the system, witch can only be described as a conspiracy. It is no longer a theory, we can see it being played out.

  5. You are all so right on. Practical Madman, you refer to “corporation U.S.A. When I watched Glenn Beck a few weeks ago, he played a tape of a telephone conference between the National Endowment of the Arts (NEA), and others (including someone from the government), and the NEA person referred to the “corporation”; Glenn Beck never caught that. That is what we have now, a corporation. There was a link to a website that I visited, but I have since lost the link.

    I too believe that the economy will come crashing down. It’s being propped up by the printing press, but that can go on for just so long. It amazes me how many still don’t get the picture, or if they do they just aren’t saying so.

    This is a change of subject, but there is some really weird road work being done on Interstate 80 (an interstate freeway that runs coast to coast). The state (California) received funding from the Feds for highway work, but it comes with the stipulation that cement dividers and guard rails must be installed. The work I saw done was over Donner Pass in the Sierras (just west of Reno, Nevada). The dividers go all the way into Sacramento. Some are so high you can’t see the other side of the freeway. Cement guard rails are also being erected on the shoulder side of the freeway in various places. I saw cement guard rails on the shoulder that cut off access to a frontage road. When I consider Agenda 21 and all its possible ramifications, my paranoia goes into overdrive.

  6. THEY have a fiduciary duty to the corporation U.S.A.,Inc., not us, and this is the only way to explain the actions this bunch up there takes.

    PM… you’re exactly right, except that the corporations no longer feel they have any allegiance to their supposed home country. They consider themselves to be “global”… which is a convenient excuse to do whatever suits them.

    The reason they are trying to slowly take the dollar down is that it makes U.S. stocks attractive to foreign buyers… so, it falsely drives up Fraud Street’s prices for their advantage… while at the same time, decimating Main Street’s purchasing power.

    It also allows them to, in essence, decrease the value of debt being held by foreign countries… something I’m not sure China and Japan are going to be too happy about. If anything, it will hasten their diversification of foreign investment… which will make it even harder to sell our debt… which will cause the Fed to print more money.

    It is wickedly deceptive to those who do not understand economics and finance… and it is a financial disaster in the making the likes of which we have never seen in this country.

  7. So you’ve got, effectively, flat income in this time period with rising core expenses; housing; health insurance; child care; transportation, now that it takes two cars to get everywhere, two jobs to support; and taxes, because you’ve got two people in the workforce and we have a somewhat progressive taxation system.

    I’m not the sharpest knife in the drawer, but everything that is wrong with our monetary policy can be laid at the feet of the illegal Synopsis of the Supreme Court and the 16th Amendment and its resultant tax rules and regulations.

    Back in 1886 the USSC gave out an Opinion that was illegally crafted by the Court Reporter that has been used as stare decisis ever since. That false statement, which was an Instruction to the Lawyers and never addressed during the trial, has been used to allow Corporations all the Rights as a Man – as well as all the Permissions granted by Government. By using both Rights and Permissions, the Corporations have undermined the meaning and intent carefully crafted by our Founders to put We the People as Sovereign over both Governments and Corporations. They had seen the havoc wrecked by the Corporations acting with Government approval and assistance, with both the British East India Tea Company and the policies of Impressment of British Subjects (and her Colonials) into Military Service.

    I am coming to the belief that the only resolution for reclamation of the Constitution will be another Civil War, and the probable breakup of the current State’s Federal compact. Besides the current elected gang of miscreants in DC, we have, in both the Federal and State governments, allowed a privileged class of Union Bureaucrats to set their own policies and permissions into law, and the last numbers I saw made that group in excess of 50% of the workforce. (I include all governmental entities – School, Local, County, State, and Federal, along with the immediate managers of those union members, as most of them came from the Union themselves.) Meanwhile, to keep themselves in power, both the Governments and the Bureaucrats undermine our society by increasing the dependency of the populous on their largess.

  8. One more… this is priceless… Steve Wynn of Wynn Resorts taking down Michigan Governor Jennifer Granholm on Fox News Sunday:

    http://www.youtube.com/watch?v=T7cW9ujow5E

    In this short segment, Mr. Wynn explains something that no one in the current administration has figured out yet. He also does a masterfully cool job putting Ms. Granholm (who has presided over the destruction of the Michigan economy) back in her box.

    What’s that definition of diplomacy?: The ability to tell someone to go to hell in such a way he looks forward to the trip.

  9. There are a lot of people feeling the same way: “I am coming to the belief that the only resolution for reclamation of the Constitution will be another Civil War, and the probable breakup of the current State’s Federal compact.”

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