Democrats signal support for Wall Street bailout at Senate hearing

Tuesday, September 23, 2008 :There is nothing mysterious about the abject servility exhibited by the members of the Senate Banking Committee toward Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke at Tuesdays hearing on the Bush administrations bailout plan for Wall Street.

All of them have a stake, personal and financial as well as political, in rescuing the financial elite at the expense of the American people. This applies no less to the Democrats than to the Republicans.

About half of the Senates 100 members were millionaires in 2006, according to the Center for Responsive Politics (CPR), with an average net worth of $8.9 million.

The two leading Democrats on the Banking Committee, Chairman Christopher Dodd of Connecticut and Charles Schumer of New York, are among the most favored recipients of campaign cash from big Wall Street interests.

Senator Schumer raised $12,928,000 in the 2003-2008 election cycle, according to the CPR. His top five industries for campaign cash were securities and investment, lawyers and law firms, real estate, miscellaneous finance and commercial banks, from which he netted a total of $3,937,000. His top five contributing firms were Citigroup, UBS, Paul Weiss et al, Kasowitz, Benson et al and Metlife, which funneled a total of $271,000 to his campaigns.

In the course of his political career, Senator Dodd has raised $43,344,000. In the 2003-2008 election cycle his top five industries for campaign funds were securities and investment ($4,268,000), lawyers and law firms, insurance, real estate and commercial banks, for a total of $9,826,000. His top five contributing firms were Citigroup, SAC Capital Partners, United Technologies, Royal Bank of Scotland and the insurance giant (taken over by the government earlier this month) American International Group. His total take from these firms was $1,315,000.

Read More

Tuesday, September 23, 2008 :In a further demonstration of his subservience to Wall Street, Democratic presidential candidate Barack Obama said that the $700 billion bailout of US financial institutions now moving through Congress would force a delay in additional spending by an incoming Democratic administration.

In an interview Tuesday morning with NBCs Today show, Obama said of the bailout, How were going to structure that in budget terms still has to be decided. He continued, Does that mean I can do everything that Ive called for in this campaign right away? Probably not. I think were going to have to phase it in. And a lot of its going to depend on what our tax revenues look like.

The new spending Obama has proposed on programs like education, infrastructure and health care is so minimal, compared to the vast social need, that it doesnt deserve the label reform. It is barely a sop. But even this is likely to be withheld initially, and then canceled outright once the cost of the Wall Street bailout mushrooms, as it inevitably will.

As late as the weekend, in an interview with John Harwood of CNBC, Obama had rejected suggestions that the magnitude of the Treasury expenditure for purchasing mortgage-backed securities would put any new social spending off the agenda. He claimed that he would proceed with a proposal to expand health insurance as well as additional funding for education, the environment and child care.

But by Tuesday the Democrat had abandoned even this position, promising only to retain a series of tax cuts in the first budget of an Obama administrationwhich will inevitably accrue more to upper-income familieswhile making no such pledge for social spending.

Read More

Tuesday, September 23, 2008 :US stocks suffered their worst two-day slump in six years this week, amid concerns in financial circles about any obstruction or delay to the Bush administrations massive $700 billion bailout announced last Friday as well as its adequacy and long-term consequences. This market volatility will undoubtedly be exploited to push the plan through Congress as rapidly as possible and on the most favourable terms to Wall Street.

There could even have been an element of market manipulation on the part of major investors who stand to profit from this unprecedented government handout to the banks and financial elite.

All of the US share indexes fell sharply on Monday and Tuesday, wiping out gains last Friday when investors enthusiastically greeted the initial bailout announcement. The Standard & Poors 500 fell by 1.6 percent on Tuesday on top of 3.8 percent on Monday. The Dow Jones Industrial Average was down by 4.8 percent over the two days. The banking sector was hard hit with the S&P banks index falling 3.1 percent yesterday, on top of a 12 percent plunge on Mondaythe largest fall since the index was created in 1989.

Global stock markets followed suit yesterday, negating most of the gains made since Friday. The MSCI Asia Pacific indexa composite indicator of Asian sharesdropped 2.1 percent. All of the regions markets fell except for South Korea, Taiwan and Vietnam. Japan was closed for a holiday. Chinas CSI index slid 3.8 percent, Hong Kongs Hang Seng fell 3.2 percent and the Australian benchmark S&P/ASX 200 closed 1.9 percent lower. The story was similar in Europe. The French CAC-40 was down 2 percent, the German DAX fell by 0.6 percent and the FTSE-100 in London dropped 1.9 percent.

Read More