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Romney and Cain Defend Big Government TARP Outrage

One of the establishment outrages that led to the middle class rebellion now known as the Tea Party was the $700 billion TARP program that bailed-out a select group of Wall Street and international banks from their bad bets on the U.S. housing market.

Former Massachusetts Governor Mitt Romney and former Godfather’s Pizza CEO and Kansas City Federal Reserve Bank Member Herman Cain’s defense of TARP was one of the few moments during The Washington PostBloomberg News debate that reminded us what is at stake in the 2012 election.

Defending TARP should burst Herman Cain’s populist bubble, but Romney in particular, defended the 2008 bank bailout in one of the most disingenuous statements of the evening, if not the entire debate cycle.

According to Governor Romney, the $700 billion Wall Street rescue package "was designed to keep not just a collapse of individual banking institutions, but to keep the entire currency of the country worth something."

Noting could be further from the truth and Romney knows it.

TARP was not sold as a program to prop-up the dollar; it was sold as a means of keeping credit markets liquid, to keep banks lending to business, so businesses would keep people employed.

Not surprisingly, from that perspective TARP has been a spectacular failure -- because as soon as Congress granted then-Treasury Secretary Henry Paulson a blank check for $700 billion (along with near-dictatorial powers over the American financial services industry and de facto control over the U.S. economy), something changed.

Suddenly, instead of being a program to move illiquid mortgage-backed securities off the books of banks, TARP became a no-strings-attached cash infusion to favored financial institutions and corporations.

Among the insiders who received the no-strings-attached cash were Goldman Sachs Group Inc, Deutsche Bank AG, Merrill Lynch, Societe Generale, Calyon, Barclays Plc, Rabobank, Danske, HSBC, Royal Bank of Scotland, Banco Santander, Morgan Stanley, Wachovia, Bank of America, and Lloyds Banking Group – that’s what Romney and Cain were defending.

But it gets even better for the establishment politicians, like Romney and Cain, who helped get TARP passed. As documented by Newsweek and other media outlets, much of this money was recycled back as PAC contributions to the very politicians who voted for TARP and sit on the committees responsible for financial services-related legislation.

In defending TARP, Romney and Cain firmly aligned themselves with the Washington-Wall Street axis that put-over the greatest crony capitalist raid ever perpetrated on the U.S. Treasury, and they also reminded Tea Party and conservative movement voters why they can not be trusted to change Washington's insider culture.

Investment Wisdom: Buy Low, Sell High

The original TARP package pushed through by President George Bush used the classic investment strategy of Buy Low, Sell High. And it did it with Other People's Money (mostly borrowed cash from China). As a result, Bush's version of TARP (which only spent $250 billion, not the $700 billion authorized) turned a significant profit. Every bank loan made has been paid off, plus interest and profit. The only outstanding loan from Bush's TARP is to AIG (an insurance company, not a bank). AIG will probably pay off in the next year, also in the black.

Obama's later version (which expanded TARP into Fannie May, Freddie Mac, Chrysler and GM)  was NOT an investment strategy. It was political payoff to the "affordable housing" crowd and the auto worker unions. These investments look like huge losers; there's no way for these entities to make the taxpayer whole.

In short, Bush made the right play. He saved our financial sector, spent not one taxpayer dime and made a profit for the Treasury. He paid a big political price, but that's only because the typical voter doesn't understand the program.

Obama went in a different direction, with much different results. Kiss that money goodbye.

Romney's comment on TARP was largely accurate

The currency comnent wasn't his best but it wasn't an outrage.
You say TARP "was sold as a means of keeping credit markets liquid, to keep banks lending to business, so businesses would keep people employed."

Keeping credit markets liquid has a very high correlation to keeping our currency worth something.

The rest of his comments on the subject were dead on perfect.

I don't get the Romney animosity

You write in your blog that Romney was being disengenous when he talked about keeping our currency worth something. I remember when he said that and I thought it was a little off, but tolerable. He also said peoples savings would be destroyed and employment would cease if the financial system failed.

You excoriate him as a politican of the worst sort. Why? Because Romney knows that TARP was "sold as a means of keeping credit markets liquid, to keep banks lending to business, so businesses would keep people employed." Keeping Credit markets liquid is thoroughly related to keeping the currency worth something.

Romney and Cain and TARP

Although the author has a point, his conclusion is wrong, namely that we don't need "establishment Republicans".  Obama is anti-tradition and anti-establishment and has proven it by an ever-expanding abuse of power, appointing czars, scoffing at DOMA, granting amnesty by executive order, and a host of other "anti-establishment" lawless actions.  Give me an "establishment Republican" any day, one with respect for law and order and sovereignty....a little mistake in perception is one thing, throwing the baby out with the bathwater is another.  Romney-Cain in 2012 !!! Newt for AG, Bachman for State Dept., Huntsman for UN Ambassador until we quit the blasted UN, Santorum (or better yet, Col. Alan West) for DoD.  Cris Christie for Dept of education head so he can bash the unions. A better America is just in sight if the democraps don't rig the elections (which they will).

No "Romney-Cain in 2012"

Romeny is a politician, of the worst kind and we do not need those! Same with Santorum and Huntsman ... Are you joking aboiut Christie? He's better off in Jersey, completely useless for anything else!

Bachmann or Paul Ryan may do well as Speaker ... dunno about who for Senate (not Reid!)

Cain is not of the old mold, and is malleable. Match him with someone great like Palin ... West is another good possibility. Would love DeMint as a VP, but it is up to him.

Oliver North for the DOD

Bolton back to UN, until we quit

That will only buy us some time and give some honor back to America

before it is all over and He reigns in Jerusalem.

You can not be serious.

Obama is VERY pro establishment. The Tea Party movement is anti-establishment. The establishment is the status quo, that is who we are tired of stealing from us. The establishment is the problem, where have you been the last 8 years, because it sure hasnt been in the act of watching the pillefering of our country by the corporate shills and their establishment backroom buddies.

That's not the Alan Greenspan I knew!

I agree that Cain's reverence for Greensoan last night was red meat for the Paulies, but I've read enough history to know why he might have that opinion.

Early on, Greenspan was a devotee of Ayn Rand and Barry Goldwater, and a firm supporter of the gold standard. As time went by, he became seduced with the levers of power at his command, and sought to keep the good times rolling by excess money creation.

Cain's been around long enough to have known and worked with the more conservative version of Greenspan, but I hope he won't make that slip again. He knows that the Fed needs to be restrained, both by being single-minded about dollar stability, and by tying money creation to price signals like gold. Furthermore, Cain plans to restrain the Fed in exactly that way.

Sorry

But Greenspan never espoused  the tenets of goldwater, he painted the picture at one time to create an image but it was nothing but varnish to fool the casual observers.

Greenspan has always been a big goverment shill that was the very antithesis of Goldwater. Anyone who supports him in any forrm or fassion is either ignorant of that truth or as Pual said "spoken like a true insider" an insider of the 1st degree.

Cain's to be trusted.  If he

Cain's to be trusted.  If he has faltered on some things, he will step back, seek further reliable info and if wrong will admit it.  Hey he has more on his plate than the stamp pad politicians!  But Cain as a non-politician is willing to step up to the plate and take some radical action, which most will not do wanting to play it safe!  What we most like about Cain is he does not beat around the bush, but addresses the questions with a direct answer and not preface every answer with an explanation on what the problem is, we already know the problem, no need to reiterate it and waste precious time in the 1 minute allotted.

Cain defending TARP?

Odd that I can find no other article or video demonstrating Cain's supportive comments of TARP in the debate.  Neither did I see any quotes from the transcript referenced in this article in which you make the claim.  I believe your bias is showing sir. 

Not Bad Bets But Good Thievery in Mortgagegate

Mr. Viguerie,

I agree with you on so many things.  But let's get one thing straight.  Mortgagegate (and the resulting TARP bailouts) was not about banks making bad bets on mortgages. It was about deliberately sucking people into dubious mortgages so the banksters could make money on their interest payments and steal their homes, their equity in their retirement accounts, pensions, etc. The whole thing was structured from the outset so the banksters could not lose money on the deal.  It was funny money created and loaned by The Federal Reserve that financed the whole scam. If the mortgages went sour, it wasn't their own equity that was at risk.  Then they resold the notes making profits on the sales of the "secured" instruments and putting other people and institutions on the hook when the loans went bad.  So the investors lost their "secured" investments while the banksters walked off with the interest money and homes of homeowners. They were able then (or thought they would be) to sell the homes and acquire a new mortgage for the total value of the home after receiving a considerable amount of principle and interest from the prevous homeowner.   Then when they goofed (as inflationists always have ever since John Law's Mississippi Scheme) about the severity of the meltdown they and The Federal Reserve created, they got the TARP bailouts.  The big banksters made money--and obtained real equity--all the way around.

It is important to remember how the Bush administration and the big banks pushed the second mortgages to pay off debts and for home improvements or other purposes.  There were big national advertising campaigns on TV and other media and lots of hard sell involved, remember?  After all, most baby boomers had paid off their mortgages and were no longer paying interest to the big banks.  The big banks wanted to be able to get more interest out of them and then their homes if they couldn't pay.  The big inflation and the big push started right after Dubya took office in January 2001.  I remember writing e-mails to people complaining about Dubya’s crackpot Proudhonesque social credit scheme.  I don't know who concocted this scheme and sold it on the basis of making home ownership available to the poor when the real goal was to steal what little equity the poor and middle class had.  It is clear important members of the Bush administration were involved.  Also, of course, then Fed Chair Alan Greenspan doing with the Fed just what he warned about in his famous 1966 article in The Objectivist, “Gold and Economic Freedom.”   Likewise, of course, the big banks and mortgage companies.  And finally, from the Congressional side, the name of Rep. Barney Frank (D-Mass) keeps coming up with regard to pushing the scheme through Congress.  A proper investigation of the whole rotten scheme is yet to be made.

One of my customers told me he has known four people who committed suicide as a result of losing everything in the depression.  I have been driven to the brink of suicide myself despite religious opposition to it.  But what do you do when you are out of work and your ability to look for a job, get a job, and do a job if you get it is totally destroyed?  The people behind mortgagegate are murderers and deserve to be held in the low esteem of such.

Romney

Anybody But Romney

 

He is big GOVERMENT and Republican Establishment which brough us Presendial canidates like Dole, McCain and others of that species.

Anybody But Romney

I don't know about "anybody" but Romney, but I could not agree with you more that Mitt Romneycare would be a disaster for the nation. His real actions on domestic policy are reprehensible and, as you say, showing arch-RINO Romney to be indistinguishable from Barack Obama.  Now he has appointed a bunch of Dick Cheney clones to advise him on foreign policy so we can have perfectly good, brave, dedicated, American young men and innocent civilians dying around the world in ever more wars so Pentagon brass hats and bureaucrats can  keep their cushy, high paying, high prestige jobs and go on buying their multi-million dollar toys without cut backs and Halliburton, General Dynamics, BAE, VSE, et. al can go on making thier death profits without having to lower themselves to competing for and meeting the needs and desires of actual consumers.

It must be remembered that Mitt's father, George Romney, gave Michigan a state income tax and weak Romney constitution and actively persecuted movement conservatives in the Republican Party.  I place evidence how the late Richard Durant was persecuted for failing to change his first-ballot vote from Goldwater to Romney, even though he ran committed to Goldwater at the 1964 Republican National Convention and the Lenore Romney "Consensus Candidate" Senate campaign against the late Congressman Robert Huber (R-Mich) when it appeared "the Hube" would have beat the three liberals initially running against him in the primary.

If Romney gets the nomination, it will split the Tea Party vote and the Ron Paul vote from the Republican Party and give the re-election victory to Obama.

This holds true

"If Romney gets the nomination, it will split the Tea Party vote and the Ron Paul vote from the Republican Party and give the re-election victory to Obama."

This holds true for any candidate but Paul, as no republican candidate can win without the support of Ron Pauls block it is to large and to well organised and they know the corruption of both parties leadership and will make sure no republican candidate can win but him. A significant portion of Pauls supporters are so tired of the corruption and lies that they will vote for Obama if Paul does not recieve the nom and the rest will either write in Paul or vote 3rd party. It is a VERY small percentage of Paul supporters that will vote for any other nom.

So simple math, Pauls block is at least 20% of republicans and likely more than that, losing that block will basically make it impossible to win assuming they simply do not vote republican if it is not Paul. Cosider then that 30% of that block would outright vote Obama just to spit in the face of the corrupt GOP leadership if he did not get the nom and then nom has zero chance of winning if it is not Paul.

Paul supporters understand that if we do not get him then we are just getting conned into another Bush/Obama so there is zero difference.