In this issue
April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Nov. 18, 2008 / 20 Mar-Cheshvan 5769

The largest heist in America's history — and it's legal

By Ed Koch

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http://www.JewishWorldReview.com | Not so long ago, Secretary of the Treasury, Henry Paulson, joined by Chairman of the Federal Reserve Ben Bernanke, proposed a strategy to Congress for dealing with the financial crisis.

As I recall, Paulson and Bernanke said the biggest and most immediate problem was liquidity: unless the federal government took action, lending by banks to other banks and to consumers and businesses, which has stopped, would not begin again. In fact, the banks took the money and did not lend it to consumers and businesses, but are purchasing other banks. What an outrage. The largest heist in America's history, only it's legal.

Our economy does not grow, indeed quickly diminishes, when businesses, large and small, are unable to obtain short and long term loans to deal with payrolls, purchases and expansion measures.

Congress was not convinced but Paulson assured the House and Senate that if the bailout bill did not pass, Congress would be responsible for driving the U.S. economy into another Great Depression like the one that almost destroyed America in the 1930s.

In 1933, President Franklin Delano Roosevelt, who inherited a devastated economy from Herbert Hoover, took heroic measures to get America going again. At age 83 I remember that era well. Nevertheless, even with FDR's New Deal reforms, the U.S. did not come out of the Depression until 1941, when World War II and the war-driven economy put the entire country back to work.

At the height of the Great Depression, unemployment reached 25 percent. Today, according to The New York Times on November 17th, "The unemployment rate was likely to peak at 7.5 percent by the third quarter of 2009...The unemployment rate rose to a 14-year peak of 6.5 percent in October."

Even with the threat of another Great Depression hanging over their heads, the House of Representatives refused to vote for a bill that gave the Secretary of the Treasury unlimited power to spend as he saw fit $700 billion dollars. This money was intended to secure liquidity in the country's financial institutions by buying their so-called "toxic assets."

The bill gave the Secretary stunning powers, which could not be appealed to any court. He was to be immune from any oversight whatsoever. A sufficient number of House members, to their great credit, refused to go along and the legislation was defeated by a vote of 228 to 205. Paulson and Bernanke, joined by all of the major economic leaders of our country, went to work and got the Senate to pass a slightly improved bill, providing among other things, that while the Secretary would continue to administer the fund with enormous unilateral power, he could only disperse half of the fund, $350 billion, after which he would have to seek to get the Congress to release the balance. This would give Congress the opportunity to add additional conditions, if they were needed. To date, Paulson has committed all but $60 billion of the $350 billion fund under his control.

This extraordinary legislation passed the House by a vote of 263 to 171, having passed the Senate earlier by a vote of 74 to 25, and was immediately signed into law by President Bush on October 3rd. Six weeks later, Paulson announced he had made a mistake in his approach to correcting the liquidity problem and wants now to modify his future strategy. He will no longer buy "toxic assets," but take an equity position in financial firms.

It is not clear to me if he is seeking Congressional approval for that, but probably so, because Congress must agree to allow him to expend the balance of $350 billion. In the meanwhile, liquidity has not been achieved. What the Treasury Secretary has done is expand the categories of applicants seeking to obtain money from the $700 billion spigot. He has approved loans to banks, also to General Motors, Chrysler and Ford for $25 billion with an endorsement of their request for another $25 billion to the automakers coming from TARP, and he has dispensed or agreed to dispense, a total of $150 billion to the gigantic insurance company, A.I.G.

The name of the program, TARP (Troubled Asset Relief Program), is an apt one, since tarp is a nautical term for cover, and we now have, in addition to all our other problems, a cover-up engaged in by Secretary Paulson who refuses to provide details of the loans he made in response to FOIL requests of the media.

Recently, someone wrote to me, commenting on my suggestions on dealing with liquidity and the sub-prime mortgage crises. First, I suggested that banks receiving bailout funds agree to commence lending to creditworthy applicants or not be eligible to receive the funding. Second, bankruptcy judges, who are court officers, should be given the power to evaluate the mortgages before them and make independent decisions on modification, as they do other contracts before them. I believe that banks, knowing that an independent authority can make such decisions, will prefer to negotiate directly with the mortgagor, rather than have a decision imposed upon them by a judge.

The writer stated, "I'm not anything like an expert on banking and mortgages, but your message on a pure common sense basis sounds both right and reasonable." I wrote back, "The experts have failed us...so don't be too humble."

Adding to the public's outrage was the position taken by President Bush at his appearance at the U.S. Sub-Treasury Building on November 13th. With the stock market in freefall and the unemployment rolls rising daily, he defended his administration's failure to regulate the stock market and the mortgage market. He said, "The crisis was not a failure of the free-market system, and the answer is not to try to reinvent that system...Free-market capitalism is far more than an economic theory. It is the engine of social mobility, the highway to the American dream....We must recognize that government intervention is not a cure-all. History has shown that the greater threat to economic prosperity is not too little government involvement in the market, but too much."

Bottom line: there is a shocking lack of leadership in Washington and throughout our financial system. Is it unfair to say that the lunatics have been — and still are — running the asylum?

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JWR contributor Edward I. Koch, the former mayor of New York, can be heard on Bloomberg Radio (WBBR 1130 AM) every Sunday from 9-10 am . Comment by clicking here.


© 2008, Ed Koch