Recently in the NY Times, Andrew Ross Sorkin raised some concerns about the role the FDIC will now play in the whole bailout scheme.
The article begins by noting that the FDIC was established 76 years ago, in the depths of the Great Depression, to provide a government guarantee, initially up to $5,000 and now up to $250,000, on the bank deposits of small savers. It describes the transformation of the FDIC, under the toxic asset disposal plan of the Obama administration, as follows:
“It’s going to be insuring 85 percent of the debt, provided by the Treasury, that private investors will use to subsidize their acquisition of toxic assets.”
In other words, the function of the FDIC is being transformed from guaranteeing the bank deposits of small savers to guaranteeing the investments of multimillionaire investment fund managers. And, as the article notes, this is occurring without a vote by Congress.
The FDIC will be insuring more than $1 trillion in new obligations incurred as the government covers the bad debts of the banks. However, the FDIC’s charter limits the obligations it can take on to $30 billion. The Times article quotes one “prominent securities lawyers” as saying, “They may not be breaking the letter of the law, but they’re sure disregarding its spirit.”
The Obama administration, in order to protect the wealth and power of the financial elite, is facilitating and directly perpetrating on a colossal scale the same type of accounting fraud and reckless leveraging that led to the economic catastrophe in the first place.
Who is to pay the price for this looting operation? The answer can be seen in the Obama Auto Task Force’s demands for the liquidation of much of the US auto industry and the brutal downsizing of what remains, combined with the imposition of poverty-level wages on those workers who remain in the surviving plants and the gutting of the pensions and health benefits of retirees. It can be further seen in the administration’s pledge to slash social programs, including Medicare, Medicaid and Social Security.
The administration’s “recovery” plan is a barely disguised scheme to preserve the fortunes of the financial aristocracy, whose interests it represents, by imposing poverty and social misery on the working class.
I am truly sorry, but I am having more and more concern with the bailout and just who is to benefit from it. So far I see NO jobs being saved, few being created, few homes being saved, but yet new home starts is up.
I have given you all you need to know on what is happening, please pay attention and adjust yourself accordingly, if you can. That tells me that developers are getting the money they need, but the people are getting foreclosure notices. Is this what the Recovery plan is all about?
To answer the original question, yes…your savings are safe….for now, but for how long will be anyone’s guess.
Class dismissed.