President Obama got up on the stage and gave the speech that we all wanted to hear.
“I proposed a set of reforms to empower consumers and investors, to bring the shadowy deals that caused this crisis into the light of day, and to put a stop to taxpayer bailouts once and for all,” Obama said to supporters. “Today, thanks to a lot of people in this room, those reforms will become the law of the land.”
It sounds really good. The problem is that it has no relationship at all to reality.
The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) released a report within hours of the president giving his speech, and its finding portrayed something very different.
“Indeed, the current outstanding balance of overall Federal support for the nation’s financial system…has actually increased more than 23% over the past year, from approximately $3.0 trillion to $3.7 trillion — the equivalent of a fully deployed TARP program — largely without congressional action, even as the banking crisis has, by most measures, abated from its most acute phases.
It’s an amazing divergence. President Obama is promising no more bailouts for Wall Street, while at the exact same time we are bailing out Wall Street. How is that possible? It’s because the media-sold perception of the bailouts have little or no relationship to reality.
For instance, the Federal Reserve’s program to buy $1.25 Trillion worth of dodgy mortgage-backed securities ended on March 31, 2010.
At least that was what we were told. It turns out that just a few weeks ago the Fed was still “adjusting” the end to this program.