The use of taxpayer dollars to bail out Wall Street will continue, as Treasury Secretary Timothy Geithner, talking to a watchdog panel on Thursday said the Obama Administration will extend the highly controversial and unpopular bailout program until October 2010, the original period the legislation allowed. The plan was going to be shut down at the end of December before this decision.
Harvard University law professor Elizabeth Warren, who headed the panel said the program was “far from an unmitigated success.” While it has helped the “too big to fail” banks, it has done very little if anything for main street America. In my opinion that will continue, as government can’t create jobs, as the failed stimulus has already proven.
Warren added that banks are doing okay because of the infusion of taxpayers dollars, but that hasn’t went down to small business and consumers, who still have trouble getting loans in an ongoing credit market.
Oddly, Obama communicated this week in a giddy fashion that with lower spending there would be more federal funds available for a new stimulus package. Call it whatever he wants, the stimulus package was an abysmal failure, and has spent billions of dollars while unemployment continued to rise.
What Obama should do is get out of the way and quit looking to gain political capital by continuing to spend the taxpayers dollars to make it look like he’s trying to do something. It isn’t working. Business will lead the way out of the recession, and that will take time.
Even lending to small businesses won’t do anything if people aren’t spending. It’s as simple as that. It won’t create jobs for that reason alone. Getting a loan doesn’t create jobs unless there’s additional business done to pay for those jobs. That’s not hard to understand.
What Obama is saying he will target is simply more government projects. Things like public works and highway projects. He also said he’ll use the stimulus to offer rebates to home owners who make their homes more energy efficient. Oh, that’s going to help a lot. Obama did give a little bit of lip service to small business, saying he wants to encourage them to hire more people. Of course there is no way he can really do that, for the reason I mentioned above: consumers have to be spending in order for businesses to grow and need more workers. No amount of government spending can change that unless they do things like the disastrous ‘cash for clunkers’ program where they attempt to create artificial markets in hopes the recession will end during those times. Now that it hasn’t, there’s nothing much else government can do, other than spend more money, even when the public largely opposes it, knowing it’s doing nothing to change the situation.
Say what they want, this is still about Wall Street and nothing much else. You’ll get some public works projects to create some jobs, but other than that, this is about the government making the wrong decision to bail out the big banks, insurance companies and automakers, and now they’re committed to take it all the way, as the political backlash would be extraordinary if everything fell apart after they spent all that money. That’s what the TARP extension is all about, no matter what other reasons are offered to justify more big government spending.
