Patterico's Pontifications

12/26/2009

Hot Air: Welcome to the Obama Administration’s “New Transparency”

Filed under: Economics,Obama — DRJ @ 5:46 pm



[Guest post by DRJ]

Hot Air and the Wall Street Journal noticed the Obama Administration dropped a financial bombshell on Christmas Eve:

“The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies [Fannie Mae and Freddie Mac] to $200 billion each.

Unlimited access to bailout funds through 2012 was “necessary for preserving the continued strength and stability of the mortgage market,” the Treasury said. Fannie and Freddie purchase or guarantee most U.S. home mortgages and have run up huge losses stemming from the worst wave of defaults since the 1930s.

“The timing of this executive order giving Fannie and Freddie a blank check is no coincidence,” said Rep. Spencer Bachus of Alabama, the ranking Republican on the House Financial Services Committee. He said the Christmas Eve announcement was designed “to prevent the general public from taking note.””

A Credit Suisse analyst described the government’s blank check as “reassuring.” I’m sure it is … for analysts and Fannie and Freddie workers, but I’m not sure taxpayers should share that optimism.

The report states the U.S. Treasury will receive preferred stock paying 10% dividends and warrants to acquire nearly 80% of the common shares in Fannie and Freddie. However, the Treasury has already loaned $60 billion to Fannie and $51 billion to Freddie. At this point, it’s hard to believe more money is the answer.

Maybe the New York Times was right: Democrats plan to talk about deficit reduction in 2010 but not do anything about it for now. Or as President Obama puts it:

“Mr. Obama calls it “a false choice” to pit spending to spur the economy against reducing the deficit. His advisers say the president, and American voters, favor both — spending to create jobs in the short term, and commitment to spending discipline and deficit reduction over the long term.”

— DRJ

13 Responses to “Hot Air: Welcome to the Obama Administration’s “New Transparency””

  1. And, along with this transparancy, they are going to hand out “Wall Street” sized bonuses to top execs at FM2, for all of their good work in putting the GSE’s upside-down.

    Any suggestions for a location in DC for a modern “Place de la Concorde”?
    There seem to be a lot of deserving personages.

    AD - RtR/OS! (3ace85)

  2. What could go wrong?

    daleyrocks (718861)

  3. It’s all quite tragic. Even FDR wasn’t this bad. I really feel like Obama hates our way of life and wants to “transform” it. Period.

    Patricia (b05e7f)

  4. I have had it with the phrase “create jobs” and all that it entails. Jobs can be created at will, just as the money supply can be. These kind of jobs are simply wasteful and non-productive. Like having one guy dig a ditch, then have the guy behind fill it in over and over. Put all these so-called jobs on the supply side of the ledger, not the demand side. What can’t be created out of thin air are jobs deriving from true economic demand. And don’t be counting any govt job or service as anything coming from an economic demand.

    What we have now and will have more of is a command economy. Too big to fail, a chicken in every pot, a house for everyone. These are politically and governmentally commanded, not economically demanded. So the wail for creating jobs is nothing but another command from the politicians who have destroyed the private demand economy.

    political agnostic (50a057)

  5. So, in other words, we have to spend all the money in order to save it. Why can’t I manage to get that strategy to work for me on a personal level? Perhaps it’s because I don’t have a printing press in my basement.

    navyvet (e4db05)

  6. #3 Patricia:

    I really feel like Obama hates our way of life and wants to “transform” it. Period.

    Not surprising, he’s been trained since birth to hate America and everything about it and the result is a classic Marxist doctrinaire.

    It’s not just our way of life: he hates who we are as people, and is bound and determined to fundamentally change mankind just as his forebears last century attempted to.

    EW1(SG) (edc268)

  7. I agree, EW.

    Patricia (b05e7f)

  8. Patricia – Obama is just trying to correct the failed policies of the last two centuries. America is a mean country after all. Just ask his wife.

    daleyrocks (718861)

  9. AD – RtR/OS! – so is Mme Lafarge on your mother’s side or your father’s ?

    Personally, I doubt if President Obama “hates” the US way of life … rather, he exemplifies the typical person who knows better how things *should* be run, and who wants to protet the unenlightened from themselves … I suspect he sincerely (and most likely unquestioningly) believes what he has been told by the Ayers of this world and the rest of his handlers …

    And, becase of his belief an his faith in his handlers, he is content to deliver the speeches (and books) written by those same handlers – and it also explains why, without the TOTUS, President Obama is such a terrible speaker, as when forced to extemporise …

    (grin) Notice how, most of the time, when he speaks, he seems to speak in phrases short enough to be a single line or less on a teleprompter …

    Alasdair (928847)

  10. I don’t know if Obama “hates” the country but I do think he doesn’t like it as it is. I’m listening to another Democrat tell the TV audience that Republicans “lied” about health care because they “like the system just the way it is now.” In fact, the Republican attempt to control cost was the HMO. They had some reason to believe that it would work but it didn’t. I think one reason was because it didn’t change incentives.

    The Fannie/Freddie situation is worse, of anything, because this will keep kicking the can down the road while the solvency issue grows larger and larger. It is difficult for me to attribute this to good faith. The left never considered what Bush did, in Iraq and elsewhere, to be in good faith. I am trying but the conclusions are that they are at base Marxists, they are corrupt or they are incompetent.

    Pick one.

    MIke K (2cf494)

  11. Personally, I doubt if President Obama “hates” the US way of life

    As is true of many leftists, Obama is a chameleon, a mix of phony-baloney populist rhetoric (“my heart bleeds for the common man, for the downtrodden, for the disenfrachised!”) mixed in with a lot of limousine liberalism. So, on one hand, he likes to rally around the concept of “down with the man” — the anti-wealthy, anti-capitalist, anti-Western-World, anti-First-World, anti-powerful, anti-successful mindset of snot-nosed college-aged kids at Any Campus USA — while, on the other hand, glomming onto the privileges and comforts of capitalism (ie, wealth), Western-World/First-World sophistication, power and success.

    Mark (411533)

  12. If they want hot air then i suggest they invite AL GORE and the jerks from GRENPEACE over their the #1 sources of HOT AIR around

    Krazy Kagu (8fb162)

  13. “…speak in phrases short enough to be a single line or less on a teleprompter …”
    Comment by Alasdair — 12/27/2009 @ 8:38 am

    Gee, could that be because they are?

    The denizens of DC are very short on accountability, and if they are not careful, they will receive an accounting that will be very uncomfortable, as did Louis, Marie, and those they surrounded themselves with.

    AD - RtR/OS! (191d21)


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