Rep. Ed Royce Continues His Attack on Shareholders, Favors Running Fannie and Freddie with No Capital

During a House Financial Services Committee hearing this week on the Financial Stability Oversight Council, Royce, in an exchange with Treasury Secretary Jack Lew, continued his anti-shareholder bias and also demonstrated his lack of understanding of basic math.

A video of the exchange, posted by Rep. Royce’s office, can be found here, and we’ve pulled some of the notable excerpts below:

“One of my colleagues asked if the GSEs have repaid the money that they have borrowed from the American taxpayer. The simple answer that my colleague tried to illicit, I think, is that the payments they have made to the government now exceed the rescued funds that they received. But, Mr. Secretary, I think you agree here, this is not the real answer nor the real question. The real question is have they repaid their debt to the American taxpayer, and for that answer I think we can go to the Federal Reserve Bank of New York… The New York Fed said thattaxpayers are entitled to substantial risk premium…The false narrative that is perpetuated is that the taxpayers have been repaid, it’s time to end conservatorship, and return the GSEs to the control of shareholders. From your comment earlier, I assume you disagree with this narrative…”

Yes, taxpayers are entitled to significant compensation for the risk borne in the $187 billion bailout of Fannie and Freddie, just as they are entitled to recompense for the $426 billion dollars in bailouts of the big banks and auto industry authorized under the TARP program. What Rep. Royce fails to mention, however, is that the GSE’s are already far and away America’s most profitable bailout, having returned over $40 billion to date in profit on top of what the Treasury invested.  The “real question” here, for which we have yet to receive a “real answer,” is, “Why does the government continue to let taxpayers bear all of risk at the point of first-loss under the guise of repayment?” Secretary Lew kind of acknowledges this in his response:

“I totally agree… the risk is being borne by taxpayers on an ongoing basis and the conservatorship is not over….So I think that the right thing is to do GSE reform and get on to a new restructured system, but it is not the right time to be talking about ending the conservatorship and paying dividends.”

Via: Investors Unite

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Extreme secrecy eroding support for Obama's trade pact

If you want to hear the details of the Trans-Pacific Partnership trade deal the Obama administration is hoping to pass, you’ve got to be a member of Congress, and you’ve got to go to classified briefings and leave your staff and cellphone at the door.

If you’re a member who wants to read the text, you’ve got to go to a room in the basement of the Capitol Visitor Center and be handed it one section at a time, watched over as you read, and forced to hand over any notes you make before leaving.

And no matter what, you can’t discuss the details of what you’ve read.

“It’s like being in kindergarten,” said Rep. Rosa DeLauro (D-Conn.), who’s become the leader of the opposition to President Barack Obama’s trade agenda. “You give back the toys at the end.”

For those out to sink Obama’s free trade push, highlighting the lack of public information is becoming central to their opposition strategy: The White House isn’t even telling Congress what it’s asking for, they say, or what it’s already promised foreign governments.

The White House has been coordinating an administration-wide lobbying effort that’s included phone calls and briefings from Secretary of State John Kerry, Labor Secretary Tom Perez, Treasury Secretary Jack Lew, Agriculture Secretary Tom Vilsack, Commerce Secretary Penny Pritzker and others. Energy Secretary Ernest Moniz has been working members of the House Energy and Commerce Committee. Housing and Urban Development Secretary Julián Castro has been talking to members of his home state Texas delegation.

Officials from the White House and the United States trade representative’s office say they’ve gone farther than ever before to provide Congress the information it needs and that the transparency complaints are just the latest excuse for people who were never going to vote for a new trade deal anyway.

“We’ve worked closely with congressional leaders on both sides of the aisle to balance unprecedented access to classified documents with the appropriate level of discretion that’s needed to ensure Americans get the best deal possible in an ongoing, high-stakes international negotiation,” said USTR spokesman Matt McAlvanah.

Via: Politico

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