The Financial Industry Turned Us into Chumps

Congressmen Elijah Cummings (Dem-Maryland) questioned Neel Kashkari during a meeting of the House Oversight and Government Reform Committee recently; bringing up several tough questions for the new Assistant Secretary of the Treasury, according to The Washington Post.

The primary emphasis of his questioning was rather straightforward: are we all being “chumped” by the financial industry? The Treasury Department was able to convince Congress that they must pass – against very strong constituent opposition – the Emergency Economic Stabilization Act or face the possibility of the worst economic crisis in American history. The government feared a catastrophe and used the fear to pressure the American people into accepting an outcome that very few taxpayers supported.

Now, in the wake of the obvious waste and curious redirection of funds, we are left “wondering if we have been had” by the financial giants of the world. Just weeks after receiving their initial $85 billion Federal Reserve bridge loan, American International Group executives enjoyed a luxurious resort retreat paid for by the taxpayers. The amount of money going into AIG from both the Fed and the Treasury has increased, yet so have AIG’s incomprehensible actions. AIG now plans to pay out $503 million to employees in deferred compensation. Certainly these employees in large part did earn their bonuses, but it is hard to argue in favor of extra salary benefits when a company is essentially insolvent and being propped up completely through government agencies.

Even the Treasury Department’s $700 billion bailout has become muddled and misguided. Initially the people were told that this money would be used to buy troubled mortgage assets and help homeowners avoid foreclosure. Now much of the funds are being given directly to large and wealthy banks for purposes yet unknown. The American people were always wary of the government’s involvement in this crisis, not because of some ideological opposition to “socialism” but because they knew the government tends to favor the rich. They did not want the elites who had buried our economy to be bailed out with their hard-earned tax dollars. That however seems to be precisely what has happened.

We must ask ourselves, as Congressman Cummings asked, “Are we a bunch of chumps?” It certainly seems like the Treasury Department is in over its head, and the only answer Congress can ever seem to fabricate is “more money” – which by the way, happens to be your money. The American people vastly opposed the Bailout, yet not three weeks ago we reelected hundreds of the very Senators and Representatives who approved the measure.

The greatest thing about living in a Democracy is that everyone – ideally – gets a piece of the pie. We all have a voice, we all have power, and we all have responsibilities. In this case, we all also have some of the blame for what has happened to this country and this economy. We are all chumps.

Source Washington Post:

Front Page Photo by - ttstam - Flickr © Some rights reserved

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