Very interesting analysis and thank you for the reading material. I'll hold off on expressing an opinion until I've read and digested Swagel's report.

Including with Elizabeth Warren, who still can't get shit out of Treasury.

Eliot Spitzer wants to know if the bailout of AIG was an inside deal among Goldman Sachs, the Treasury, and the Fed. Edward Jay Epstein, who has been unraveling conspiracy theories since the Warren Commission, examines the evidence.

http://www.thedailybeast.com/blogs-and-stories/2009-04-02/inside-the-aig-conspiracy-theories/

Presidents from Roosevelt to Lyndon Johnson have been quoted as more or less telling their political constituencies "I agree with you. Now make me do it" when it came to tackling the issues of their day where the right course of action was otherwise not politically tenable. Obama has the wrath of a wide swath of the American people in play and he knows it:

Arrayed around a long mahogany table in the White House state dining room last week, the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves.

“These are complicated companies,” one CEO said. Offered another: “We’re competing for talent on an international market.”

But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.”

“My administration,” the president added, “is the only thing between you and the pitchforks.”

(Click my sig for the source of this quote/paraphrase.)

Why is Obama standing between the bankers and the (at least figurative) pitchforks? Why is he blowing so much political capital giving aid to the 'Masters of the Universe' that got us here while simultaneously pulling back from GM (258k jobs plus a multiplier of five to seven for tier 1, 2 and 3 suppliers) when what is needed there (whether GM is effectively bankrupt or not) is such a pittance in comparison to what is being thrown at Wall Street?

To date, regardless of what some may hypothesize is the potential rate of recovery, the fact is that the US government is on the hook for $12,800,000,000.000.00 in some combination of appropriated expenditures, guarantees and loans. How much money is that? Well, in a nation of 300 million people, that's a tad more than 40 thousand dollars for every man, woman and child. 40 grand each. For all of us.

As far as Swagel's statement on critics ("...the next sentence should set forth the section of the U.S. legal code that allows such a course of action"), well, no. They have much authority that has not been used and there is much leeway (with Supreme Court rulings to back it up) for what the government may do to salvage a situation in the midst of a national emergency.

I appreciate that it's a difficult situation, and nothing here is simple, but the argument about political cover and the argument which says in effect "our hands are tied" simply does not stand close scrutiny. Now...where's my pitchfork.

If only the Treasury Department had explained what it was doing better, maybe the American people would be rioting. Which would explain why Treasury still won't explain what it's doing after having been repeatedly asked for months.

Why is Obama standing between the bankers and the (at least figurative) pitchforks?

Because the banksters have promised that if he doesn't they'll crash the global economy for true, and pin the blame on Obama.

Think of it as a hostage situation.

Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.

Adam Smith, Wealth of Nations

The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the government of the U.S. ever since the days of Andrew Jackson.

FDR, letter to Edward M. House

It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Henry Ford

The combination of economic and political power in the same hands is a sure recipe for tyranny.

Milton Friedman

Thanks Mr. Leonard for this - and many - clear, cogent analyses. I know a lot more now, thanks to you, and that's sorely needed and appreciated. This is exactly why I come to Salon every day, editors please take note. One of the absolute best journals/columns around.

The kind of money Wall Street is seeking is chump change compared to the trillions of (adjusted) dollars that Detroit has pulled in over the past 60 years. Detroit killed off mass transit systems across the United States and reaped the benefits of the interstate highway system not to mention the suburban car-centered dystopias that followed. Forget Detroit and go with Wall Street for the postindustrial future that lies ahead.

"Swagel also acknowledges that Treasury totally missed the boat in its predictions of what percentage of homes would go into foreclosure."

Really?

I saw those default trajectories in the Spring of 2007, and never did they miss a beat, getting worse by the minute. Moreover, fuel was already rising fast, heating and energy bills were WAY up for years, and unemployment kept rising (despite those rates artificially being kept down.)

They didn't see the foreclosure trajectories? Oh Please, they ignored them. They did whatever they could to make sure their friends stayed unregulated (much less, taxed....).

They played politics with the entire world economy and bashed the rest of us at the same time.

Do we actually NEED a "Fed?" Maybe their time is passed?

I am a Numerologist and study building address numbers. Address numbers tell me the behaviors of people inside a building.

The number "5" in an address is linked to deceptive and fraudulent activities. This means if the US treasury is deceptive then so is the IRS because they are part of the bureau. This is why our congressional leaders, as well as the elite, file their taxes but don't pay as they know the system is completely illegal and works for them. Many more "big people" are going to be indicted as this is a 15-year trend.

Address of the US Treasury

1500 Pennsylvania Ave. NW

(Energy 6: Nothing but friction between people and deceptive practices. Most of the people working her are under age 40.)