Obama pats himself on the back.
"Because of Financial Reform, the American people will never again be asked to foot the bill for Wall Street's mistakes. There will be no more taxpayer-funded bailouts. Period. If a large financial institution should ever fail, we will have the tools to wind it down without endangering the broader economy."
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By Dr. Pitchfork
This sounds great, but it's complete baloney. How do we know? Because in SIGTARP's recent report on Extraordinary Financial Assistance Provided to Citi, Geithner admits, in no uncertain terms, that the fabled "resolution authority" will never actually be used and that taxpayer-funded bailouts are still on the table. The report notes:
"As Secretary Geithner told SIGTARP, while the Dodd-Frank Act gives the Government 'better tools,' and reduced the risk of failures, '[i]n the future we may have to do exceptional things again' if the shock to the financial system is sufficiently large. Secretary Geithner's candor about the prospect of having to 'do exceptional things again' in such an unknowable future crisis is comendable. At the same time, it underscores a TARP legacy, the moral hazard associated with the continued existence of institutions that remain 'too big to fail.'"
In other words, in spite of Obama's claims, and in spite of the very specific language within the bill itself, Geithner reserves the right to break the law ("do exceptional things") in order to save the big banks the next time they get into trouble. Moreover, we have every expectation that the government will do exactly that. We still have Too Big To Fail, and according to Geithner, Too Big To Fail means there WILL be more bailouts the next time around.
Sorry, Mr. President, you've been BUSTED!