December 10, 2009

Banks get bailout, Indians don't

Cowboy Banks Get Big Bucks as Indians Get Little

By Ann WoolnerIf the Indians had been AIG, the $3.4 billion settlement announced this week would have been many times larger. The real AIG--insurance giant American International Group Inc.--sopped up $180 billion in government aid after helping to create the economic havoc felt around the world.

The Indians sought no bailout, no handout when they filed suit in 1996 to claim royalties due them for oil, gas, timber, mining and grazing rights to lands allotted them under an 1887 agreement with the federal government.
And:The government didn’t need precision when it doled out $180 billion to AIG and did it in a matter of days. Whether it was wise or foolish is beside the point.

The government had no obligation to do that. Or to bail out Chrysler or General Motors. It had no legal responsibility to rescue Wall Street’s hot-shot risk-takers.

The $3.4 billion the Indians got amounts to roughly a third of Goldman Sachs’s government bailout. It’s little more than one-tenth the loss the government expects to suffer from its AIG bailout.

Executives balk at the idea of capping pay at $500,000 in firms that haven’t repaid the government. The Indian settlement will come to $1,500 to $2,500 for most of the beneficiaries.
Comment:  To be clear, the Indian account holders didn't ask for a bailout. They asked only that the government calculate the money it owed them and then pay it.

But the accounting would've been difficult if not impossible. So the government had to come up with an arbitrary settlement figure.

The question is: Why didn't the government err on the generous side with Indian account holders the way it did with AIG and Goldman Sachs? Why not give them double or triple what they were owed as a penalty for the government's malfeasance? Why were the criminally negligent banks rewarded while the innocently victimized Indians weren't?

Answer: Because rich white people own and operate the banking firms. The rich white people in Congress protected their own while letting the poor brown people suffer. It's Hurricane Katrina all over again. Billions in taxcuts and bailouts for those who don't need them; pennies on the dollar for those who do.

For more on the Cobell case, see Cobell Settlement = "Reparations"?!. For more on Indians and bailouts, see Satire:  Sioux Attack Wall Street and Indians and Bankers Mismanage Money?

Below:  Cowboy capitalism means bankers get bailed out while Indians get burned.


dmarks said...

"Answer: Because rich white people own and operate the banking firms."

Good points, until you got racial (racist?). Nonwhites were present at the top in this, even in key positions that helped trigger the whole financial meltdown (in Fannie Mae, for example, and at other places.

"The rich white people in Congress protected their own while letting the poor brown people suffer."

Tell that to the members of the Democratic Black Caucus (almost half of them favored the bailout) who voted for the no-strings-attached bailout. Or the current President, who supported it as a Senator. Also non-white. And guess what, the Republicans (the party of rich white males, according to racists) by and large voted against bailing out AIG.

You make good points otherwise, though.

dmarks said...

And you might as well find a picture of Harry Reid in a cowboy hat for this one, instead of Bush. Sure, Bush signed the bailout. However, the Dems in Congress voted for it in such overwhelming numbers that they might have been able to override a Bush veto, had he done one.

Lacking a Harry Reid cowboy hat photo, here is a photo of a major Democratic leader who supported the bailouts . A man who is now the major Democratic leader

Rob said...

According to one website, only 76 of Congress's 535 members are Hispanic or nonwhite. Whenever a bill passes Congress, the majority of its supporters are white. So it's accurate to attribute anything Congress does to white people.

It's also accurate to attribute anything Congress does to rich people. Here are the latest net-worth statistics:

Washington lawmakers are feeling the effects of the recession, reports the Center for Responsive Politics--just not as much as the rest of us.

According to a study of personal financial disclosure reports by the CRP, the median wealth of members of Congress dropped nearly 5 percent in 2008 compared to the previous year.

Don't feel sorry for them: Despite the drop, 237 members of Congress are still millionaires.

Senators' median worth currently stands at $1.79 million, down from $2.27 million the year before. House members' current median income is $622,254, down from $724,258 in 2007. Fifty lawmakers have an estimated wealth of at least $10 million.

Anonymous said...

Bailouts aren't "capitalist". A policy that's contrary to free-market principles is not capitalist.

Also, when deciding whether "accurate to attribute anything Congress does to white people", it's not enough to cite the numbers for Congress as a whole. You have to break it down according to how members voted.

Rob said...

I didn't cast this as liberal vs. conservative issue. I was blaming the rich, white politicians of both parties. They voted for the bailout and they didn't do anything to settle the Cobell case--until now.

When I referred to "protecting their own," I wasn't thinking only about the bailout. A big issue has been Congress's failure to enact tougher financial regulations or crack down on executives who are profiting at taxpayer expense. If you want to get partisan, let's discuss who's protecting these rich, white capitalists from further oversight.

I chose the picture of Bush because--like 9/11 and Hurricane Katrina--the meltdown occurred on his watch. He appointed the lax federal regulators who let it happen. If nonwhites headed agencies such as Fannie Mae, he appointed them too.

I addressed your point about minority politicians in Exercising Power:  Individuals vs. Groups. As far as I'm concerned, this posting remains valid. Here's what I said to reader Stephen:

Apparently you think a few exceptions disprove the rule. I guess this is a corollary to your stupid misunderstanding of generalizations. When I say white privilege, you think I'm saying "whites have absolute control over absolutely everything." Wrong. I'm saying they have control in general.

Rob said...

No, I don't have to break down Congressional actions according to how members voted, Anonymous. Not when I'm generalizing, at least. Let me repeat my mathematically correct statement: Whenever a bill passes Congress, the majority of its supporters are white.

There's no such thing as a pure free-market system in existence. We're talking about how capitalism works in the real world, not in the fairy-tale world of theory. In the real world, capitalists commit legal and moral crimes. That's why every capitalist system needs and has government regulations.

You're wrong about capitalist theory, too. Adam Smith developed it and he included regulation as a necessary component. Here, read what he had to say on the subject:

"Such regulations may, no doubt, be considered as in some respects a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments; of the most free, as well as of the most despotical. The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed."

Kat said...

I first agreed with dmarks, but you've managed to convince me regarding White Privilege.

However concerning capitalism:
Smith makes a comment on preventative regulation, not on subsequent bailouts.

Rob said...

Lax regulation was a primary cause of the financial collapse and the subsequent bailout. Without one, the other wouldn't have been necessary.

Again, the "protecting" part of my comment had to do with shielding capitalists from further oversight and responsibility. Adam Smith's quote addresses that point.

Stephen said...

Hmmmm nothing racist at all about trying to blame economic trouble on a single race. *Clicks sarcasm off.* Off this isn't Rob's first racist post, check out this gem of a quote:

"Violence is an American...white...and male problem."

dmarks said...

The "why not show Obama in a cowboy hat also" point still stands, as he has been President for 11 months now, and has not re-instated the banking regulations. Not only that, Obama voted for the bailout that "sopped up $180 billion in government aid after helping to create the economic havoc felt around the world" [Rob's words], and he has been reluctant and two-faced about a "crack down on executives who are profiting at taxpayer expense".

At one point, you're going to have to retire the Bush-bashing imagery. Especially on issues like this, where President Obama has been an ongoing part of the problem since before he got elected.

dmarks said...

Stephen: I went to the post you pointed out, and have to agree with you. Violence is definitely not a "white problem", and the assertion that it is is as easily dismissed as that of the KKK-type racist who blames high crime rates on some sort of inferiority in the gene of the "Negro".

Violence is a human problem, with shocking and overwhelming examples of it found for many thousands of years in areas the white man never touched until recently.

Stephen said...

Hmmmm, still no reply I guess Rob hushes up pretty quick when you point his racism.

dmarks said...

He has probably not seen it, or is too busy to bother with it. I don't think the "nya nya chicken, you ran away!" type accusation applies here. No big deal to me.