Obama Team Warns: No Magic Wand for Banks

(NEWSER) - The Obama administration has devised a maybe-legal method of avoiding Congress’ restrictions on companies that accept bailout funds, including limits on executive pay and a requirement that taxpayers get an ownership stake in the firms, the Washington Post reports. To sidestep the restrictions, the administration has created special entities to act as middlemen between the government and the firms it aims to help. More»

Peter DeFazio says White House betrayed Main St. for Wall St.

(NEWSER) - Rep. Peter DeFazio wants Barack Obama to fire the Larry Summers and “Timmy Geithner” for being Wall Street lap dogs, and says there’s a “growing consensus” in the Progressive Caucus that agrees with him. Summers and Geithner oppose a Progressive proposal to use unspent TARP funds to create jobs through infrastructure projects. “We think it is time, maybe, that we turn our focus to Main Street,” the Oregon Democrat tells MSNBC’s Ed Shultz. More»

Treasury chief's calendars show frequent contact with big players

(AP) - A look at Timothy Geithner's phone calendars show the Treasury secretary has maintained close ties with Wall Street executives he has known for years. Executives at Goldman Sachs, JPMorgan, and Citigroup can reach the nation's most powerful economic official at will. While there's nothing inherently wrong with keeping tabs on the market's biggest players, the calendars could offer fodder for critics who say Geithner is too close to firms he helped bail out. More»

TARP funds, meant to save banks, could be used to save jobs

(NEWSER) - The Obama administration is working on a plan that would take money from the TARP—the $700 billion fund intended to rescue banks—and lend it to small businesses, the Washington Post reports. The money would come with few restrictions, and the government would pick up as much as 90% of the tab should the businesses fail. Most of the country’s jobs, proponents argue, come from companies with fewer than 500 employees. More»

Washington is leading us to a second crisis: Krugman

(NEWSER) - Sure, yesterday's release of the stress tests' results felt pretty anti-climatic. But while bankers might be reassured, Americans have no reason to be, writes Paul Krugman. For the New York Times columnist, the less-than-rigorous stress tests are part and parcel of an Obama administration strategy to "muddle through the financial crisis," creating "a heads-they-win-tails-we-lose situation. If all goes well, the bankers will win big. If the current strategy fails, taxpayers will be forced to pay for another bailout." More»