Democrats have had an interesting relationship with the financial industry since they took over Congress. It seems that whenever the two mix, campaign cash and taxpayer bailouts seem to follow. Let’s recap:
- Sen. Chuck Schumer (D-NY) pressured hedge funds to donate to DSCC to avoid a tax hike. Wall Street Journal Editor Steve Moore wrote last year:
As one hedge-fund manager tells me: “Senator Schumer says on the phone, ‘I can make your problems go away.’ ” Of course, the Democrats created the problems. Mr. Schumer has raised at least $2 million this year from managers at leading PE firms like Carlyle and Blackstone Group.
- Sen. Chris Dodd (D-CT) and Sen. Kent Conrad (D-ND) got breaks on their mortages through the “Friends of Angelo” program at Countrywide. Then Dodd allowed banking lobbyists to help write a $300 billion bailout that will (surprise, surprise) benefit Countrywide to the tune of over $25 billion.
- And now HotAir reports yet another chapter in this saga:
Federal regulators seized IndyMac today in the largest bank failure in decades. The FDIC will reopen IndyMac on Monday under its own control, keeping its $32 billion in assets while eating as much as $8 billion in losses. Guess what triggered the run on the bank that required FDIC intervention?
Two weeks ago, Schumer publicly released a letter he had written to regulatory agencies, demanding action to prevent IndyMac’s collapse. Instead of shoring up the bank, the letter induced depositors to make a run on the bank. Within days, over $1.3 billion in deposits disappeared, forcing the FDIC to close the bank and pay off the insured deposits.
That move cost American taxpayers billions of dollars. Don’t forget to thank Uncle Chuck when you have a chance.
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