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Government by Wall Street?

There are certain things I ex pected to disagree with the Obama administration on. We knew he didn’t support marriage equality or single-payer healthcare. There are others I expected that there would have to be a lot of careful watching, advocating, organizing, and protesting about before an eventual win—I don’t like that we’re still engaged in Afghanistan, but I’m not surprised. I don’t feel like my rose-colored glasses were all that heavily tinted.

But I’ll admit that I was expecting to have more energy and success with the fighting-for-the-important-things part because I expected that, unlike with the Bushies, the Obama administration would generally, you know, follow the law. I figured that we’d gotten a break from a daily barrage of backstabbing “I can do what I want and what I want is to shovel money from the regular people into the pockets of my friends” administrative moves.

I suppose I can say it’s not quite daily anymore. And the friends aren’t quite the same people. And yet, I can’t say that that makes me feel better about the blatant Wall Street pandering, though—and the longer it goes on, the less forgiving I find I can be.

Greg Palast, the investigative journalist who wrote The Best Democracy Money Can Buy, published a searing article last week in which he described how Steve Rattner, the “Car Czar,” is breaking the law by replacing GM workers’ pensions with worthless bankrupt stock in order to pay back bailed-out banks JP Morgan Chase and Citibank in full.

Palast is livid, and it’s hard to argue with him. Even if weren’t technically against federal law, pensions were part of workers’ compensation—if pensions hadn’t been there they would have been paid more, or perhaps taken another job with better benefits or higher. The pensions are theirs, not GM’s. Everyone takes a hit when the company goes bankrupt, but the workers’ sacrifices are jobs and wages; no one should be able to take away paid-for pensions any more than they could take away houses bought ten years ago with GM salaries.

Meanwhile, the banks don’t even take a partial hit? This is worthy of the Bush administration—blatant pandering to wealthy interests that’s not even politically astute, unless you’re a campaign treasurer.

Meanwhile, banks are trying to pay back their Troubled Assets Relief Program bailout money—which they distinctly did not use for its intended purpose of modifying loans and getting credit loosened up again—so they can be free of even the window-dressing restrictions that came with it. In order to do that, they are supposed to buy back the stock the government took for itself at fair market value, so the taxpayers benefit from the increase in value that our bailout money enabled. (In other words, we saved your sorry asses when you didn’t deserve it.)

Unfortunately, as Doug Henwood of Left Business Observer reports, Old National Bancorp of Indiana, one of the first to do so, got away with paying about a fifth of what the stock was worth, according to “standard, first-year MBA financial formulas.” So much for getting our money back. If that pricing prevails when other banks wriggle free, says Henwood, we’ll be out about $10 billion.

You’d think that people who spend so much time brown-nosing Wall Street types would be better investors/negotiators at least.

Meanwhile, companies such as BlackRock that own “toxic assets” and serve clients who own “toxic assets” have been hired to advise the government on the worth of those assets. To quote Henwood: “The polite way The New York Times, which I feel a little guilty about making fun of given its dwindling life expectancy, would describe this relationship is ‘raising questions.’ It doesn’t really raise questions—it screams profound conflict of interest. . . . No, the relationship doesn’t raise questions. It answers them, if anyone’s asking.”

It’s no Halliburton—yet—but it’s got the same smell.

President Obama: We overlooked your relative inexperience because we knew that you had the skills to govern well, if you surrounded yourself with the right people. To be blunt, in terms of economic issues, you have so far utterly failed to pick the right people. At least, that’s the kindest, least scary interpretation I can come up with. Despite your supposed never-before-so-strong rules on lobbyists and conflicts of interest that we swooned over, the foxes are once again guarding the hen houses—and dining well.

You’ve got a lot on your plate, much of which you are handling well, but if you want to show us that the economy is a top concern of yours (as it damn well ought to be), and that you do actually respect the rule of law and care about the integrity of your administration (as you so carefully crafted your image to claim)—you need to clean house already and quit this weird I-quail-before-the-almighty-financial- companies crap. It didn’t work (in fact it got us here), it won’t work, and we need you to do something that will.

—Miriam Axel-Lute

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