I Bet You Won't Hear This On Teevee

As I posted on Tuesday, key Democratic members of the House Financial Services Committee published a scathing open letter to Northern Trust in which the bank was lambasted for sponsoring a PGA tournament after receiving TARP proceeds:

At a time when millions of homeowners are facing foreclosure, businesses and consumers are in dire need of credit, and the government is trying to keep financial institutions – including yours – alive with billions in taxpayer funds, this behavior demonstrates extraordinary levels of irresponsibility and arrogance.

It is impossible to argue with the Representatives' logic, golf is frivolous in the face of the suffering that the American people are currently facing and will continue to face as a result of the magnitude of these bailouts. As the Congresspeople clearly stated in their letter, the sole intent of the TARP program was to create credit and strengthen bank capitalization. Any other type of spending should be deemed unacceptable.

If you've read any of this blog, you'll know that I firmly believe that the current recession/depression is the inevitable result of the corruption of government by corporate interests via campaign contributions. I also believe that this corruption has so completely saturated the government that elected officials should be viewed as little more than corporate employees. Thus, I wasn't a bit surprised to find that 11 of the "outraged" 18 signatories of the Northern Trust letter had accepted campaign contributions from TARP recipients after the recipients had received taxpayer funds:

Tarp Recipient Making Campaign Donation
Tarp Amount Received / Date of Receipt
Northern Trust Letter Signatory Who Accepted Campaign Contribution from TARP Banks
Contribution Size and and Date
Bank of America1. $15B / 10-28-08
2. $10B / 1-9-09
3. $20B / 1-16-09
Rep. William Clay
$1500 / 1-28-09
Bank of AmericaSee aboveRep. Bill Foster
$1000 / 11-14-08
Bank of AmericaSee aboveRep. Dennis Moore
$2000 / 11-01-08
Bank of AmericaSee aboveRep. Charlie Wilson
$2500 / 11-04-08
Bank of AmericaSee above
Rep. Gwen Moore
$2500 / 11-04-08
Bank of AmericaSee aboveRep. Gary Peters
$1000 / 11-13-08
Goldman Sachs$10B / 10-28-08Rep. Paul Hodes
$2500 / 1-26-09
Goldman SachsSee aboveRep. Barney Frank
$4500 / 10-30-08
Goldman SachsSee aboveRep. Stephen Lynch
$1000 / 10-31-08
Goldman SachsSee aboveRep. Andre Carson
$2000 / 10-31-08
Wells Fargo
$25B / 10-31-08
Rep. Keith Ellison
$2000 / 10-31-08
1. US Treasury Tarp Completed Transactions List
2. Federal Election Commission Campaign Finance Database

To be fair, although companies can fund the operating expenses of a PAC, they are barred from contributing directly from their coffers. Instead, corporate PACs rely on "voluntary" contributions from their employees. In this farce, employees act as straw men by allowing automatic payroll deductions to be directed into their employer's PAC. Typically, the employees have little say as to how the PAC spends the contributions. To make the these deductions more palatable, many companies have offsetting an offsetting bonus scheme, to skirt the legal consequences of reimbursing the PAC donors. It is possible that some employees truly desire this arrangement, but I'm certain that if I was working at an undercapitalized finance institution during a depression, I'd want to extract every penny possible from my paycheck as quickly as possible.

Regardless, the contributions come directly from employee pay without the workers ever laying hands on the funds. Who is paying the employees? That would be us, now. If an employee's pay was reduced by the amount of their contribution, it would be invisible to the worker and would reduce the salary expense for the TARP recipient, not to mention the administrative costs of processing the payroll deductions and running the PAC. Most importantly, a ban on TARP recipient PAC contributions would eliminate the blatant conflict of interest created by the situation.

In summary, the practice of allowing TARP recipients to financially influence the legislators who "regulate" the bailout process is yet another example of the complete corruption of our political system. Despite the fact that campaign contributions bought the regulatory laxity that put these TARP recipients in their current state of disrepair, lawmakers are blatantly allowing the practice to continue even though this round of legalized bribery is being subsidized by the taxpayer.

The truly disturbing part of this situation is that hypocrites like Barney Frank publicly feign outrage at Northern Trust's behavior, while unabashedly taking contributions subsidized by TARP proceeds. (Honestly, Frank is such a contribution whore, I expect that he'd take diverted UNICEF funds.) Frank knows that campaign finance information is public record, so why would he risk political damage from this hypocrisy? The obvious reason: Our elected officials are well aware that public is asleep comatosed at the switch. We've been dumbed down to the point where we are almost incapable of critical thinking. Despite the fact that our retirement savings have been halved and our taxes will likely double, we still eagerly succumb to the self-serving propaganda spewing from our teevees. After all of these years the words of Mecken still hold, "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

1 comment:

  1. Well stated, and, unfortunately so true. This blog post gets circulated to my mail recipient list...