Corrupt Government
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Title: The new Obamanomic Czar, the Corruptocratic Party's crony capitalism continues
Source:
The Washington Examiner
URL Source: http://campaign2012.washingtonexami ... -business-government-collusion
Published: Sep 1, 2011
Author: Timothy P. Carney
Post Date: 2011-09-01 07:36:41 by Happy Quanzaa
Keywords: Obama-doma-ding-dong, Obamanomics in Action, Corruptocratic Crony Capitalis
Views: 289
Tim Geithner's deputy, Alan Krueger, is a fitting pick to lead President Obama's Council of Economic Advisers -- which is to say he believes in the same noxious collusion of Big Business and Big Government that has dominated the Obama administration's economic policy. The Wall Street bailout, cash for clunkers, the stimulus, subsidized municipal bonds, an infrastructure bank: Anytime you find the big business lobby rallying behind a proposed expansion of federal spending, you're likely to find Krueger's fingerprints, or at least the sound of his hands clapping. Krueger's pet policy at Treasury, a convoluted program called Build America Bonds, amounted to a taxpayer subsidy for big banks and other corporate giants that increased public indebtedness. In other words, typical Obamanomics. Next week, expect to see President Obama start banging the drum for an "infrastructure bank." Krueger testified in favor of the bank at a Senate hearing where he insisted this new government program wouldn't just be a Fannie Mae for roads and mass transit. But the "bank" Krueger wants is a quasi-governmental agency that puts taxpayer money at risk in order to finance activity that profits big companies. It's the same formula as another Krueger special, cash for clunkers: A taxpayer subsidy launched in the name of stimulus, with some benefits for special interests and no apparent long-term gain. The pinnacle of Big Business-Big Government collusion, the Troubled Asset Relief Program, is Krueger's model of good legislation. "Our legislative system does best in a crisis," Krueger said in 2010 at the Barcelona Graduate School of Economics. His example was the Wall Street bailout. A Fannie Mae for light rail and highways, paying car dealers to destroy drivable cars, and apotheosizing TARP -- you can see the pattern. Kreuger's policies involve partnering with big business in order to increase government's role in the economy. That's Obamanomics. Krueger's Build America Bonds were part of the 2009 stimulus bill. (Like most Krueger-influenced policies, the bonds had firm backing from the Chamber of Commerce, the nation's largest lobbying organization.) BABs were taxable municipal bonds subsidized by the federal government. The idea was to boost cash flow for municipalities whose revenue had been whacked by the housing bust. This added cash flow was supposed to stimulate public works projects, thus creating jobs. Krueger and other Obama administration officials crowed about all the demand for BABs, as if this proved their virtue. Free money, it turns out, is popular, and this was yet another program that brought the subsidy sucklers to the federal trough. "Of course state and local governments are big fans of the Build America Bonds program," Sen. Chuck Grassley, Iowa Republican and a senior member of the Senate Finance Committee, said on the floor last year. "They get federal money that they don't have to pay back." But more important, Grassley added: "The large Wall Street investment banks love Build America Bonds -- they're getting richer off of them." All municipal bonds go out to the market through financial middlemen known as underwriters. Goldman Sachs, Bank of American, JP Morgan and Citigroup were the top underwriters of BABs, and Grassley suggested that these investment banks were charging municipalities higher prices for underwriting the subsidized bonds because Uncle Sam was picking up the tab. The program added at least $30 billion to the national debt. This amounted to a transfer from taxpayers to Goldman Sachs -- just like Krueger's other favored policies. There's no need to read bad motives into Krueger's tendency to advocate policies that benefit big banks and other corporate giants. There's a far simpler explanation than cronyism for this pattern of policies -- prevalent throughout Obama's tenure -- that provide big profits for big business. Krueger, like Obama, Chief of Staff Bill Daley, Commerce Secretary-designate John Bryson and Treasury Secretary Geithner, is liberal enough to believe the Keynesian tenet that government needs to drive economic recovery. But they're also pragmatic enough to see that business is the true engine of prosperity. So, Krueger and crew take one part government, one part private sector, and mix. They try to sell the resulting stew as moderate by crowing, "Even industry likes it!" But this recipe has produced foul results. Solyndra, an Obama-favored, Energy Department-subsidized, politically connected solar power company, declared bankruptcy this week. Evergreen, another state-aided solar company, declared bankruptcy the week before. A Georgia cellulosic ethanol plant shuttered recently without making a drop of ethanol. Many Obamanomics beneficiaries, including General Electric and Goldman Sachs, are making handsome profits, but they aren't creating jobs. Krueger promises more of the same.
New adviser embodies business-
government collusion
President Barack Obama announces his selection of Alan Krueger as chairman of the Council of Economic Advisers, Monday,
Aug. 29, 2011, in the Rose Garden of the White House in Washington.
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