Sep 21 2008

Looking at it from Another Angle

(10 am. – promoted by ek hornbeck)

I just read over at the Orange a recommended diary by Larry Madill entitled ACTION REQUIRED: Executive Power Grab in Banking Bail Out Bill.  Another diary, also on the rec list, by New deal democrat gives the entire text of the Wall Street Bail Out Act.

Larry Madill quotes Adam Davidson in his NPR blog Planet Money in his analysis of this bill, where he concludes that this is yet another giant power grab by the Executive Branch.  Seems this crew of crooks and their quislings don’t know how to propose legislation that doesn’t make bad matters even worse.

The money quote (no pun intended) from the proposed Act:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

To which Davidson responds:

   Whoa.

   So, for the next three months, and then an additional six months after that, the Treasury Secretary can do anything he deems appropriate without anybody anywhere looking it over.

   That seems like an awful lot of absolute power.

The diarist agrees a bail-out is needed.  Yet as with every catastrophe that’s happened in his country in the past eight years, the Bushies manage to propose solutions with a mine field of horrors embedded in it.

Will the Congress capitulate yet again?

Ok, and then we have Magnifico’s essay The Fed Uses Wall Street “Shock” as cover for deregulation, wherein he proposes:

Under cover of the turmoil on Wall Street as a major investment bank declared bankruptcy and another investment bank was purchased by a consumer bank, the Fed is, once again, changing America’s financial flight plan while most people are distracted, looking at the burning wreckage of failed investment banks.

As I suspected back in March, the Bush administration and Federal Reserve are going to try to use the shock of the collapsing economy to quickly deregulate the entire economy to make it easier to loot.

I don’t think you need to be an economist to know that everything these bozos touch turns to shit.

They simply do not know how to do business any other way.  And of course, to these goons, government IS business.

Larry Madill recommends we man the phones yet again and let our representatives know they must not cave on this bill.  I agree.  Here’s some info.

Senator Charlies Schumer (202) 224-6542, Email Submission Page

Senator Chris Dodd (202) 224-2823, Email Submission Page

Switchboard Number for the House of Representatives: 202-225-3121

Switchboard Number for the U.S. Senate: 202-224-3121

I hope Obama speaks out about this as well.  In an update to Madill, Paul Krugman weighs in.

I know “oversight” is a word that provokes derisive laughter when it comes to Congress.  If they allow, yet again, Bush and his goons to roll over them by scaring them during an election season, there will be hell to pay.  Literally.

45 comments

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  1. … can’t wait to see them in jail, where they belong.

  2. … found this also at the Orange, a diary by WattleBreakfast, Bailout Principles – Senator Bernie Sanders.  There are folks who are fighting back and we ought to support them.

    From Sanders:

    In my view, we need to go forward in addressing this financial crisis by insisting on four basic principles:

    (1) The people who can best afford to pay and the people who have benefited most from Bush’s economic policies are the people who should provide the funds for the bailout.  It would be immoral to ask the middle class, the people whose standard of living has declined under Bush, to pay for this bailout while the rich, once again, avoid their responsibilities.  Further, if the government is going to save companies from bankruptcy, the taxpayers of this country should be rewarded for assuming the risk by sharing in the gains that result from this government bailout.

    Specifically, to pay for the bailout, which is estimated to cost up to $1 trillion, the government should:

    a)  Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers.  That would raise more than $300 billion in revenue;

    b) Ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and

    c) Require that taxpayers receive equity stakes in the bailed-out companies so that the assumption of risk is rewarded when companies’ stock goes up.

    (2) There must be a major economic recovery package which puts Americans to work at decent wages.  Among many other areas, we can create millions of jobs rebuilding our crumbling infrastructure and moving our country from fossil fuels to energy efficiency and sustainable energy.  Further, we must protect working families from the difficult times they are experiencing.  We must ensure that every child has health insurance and that every American has access to quality health and dental care, that families can send their children to college, that seniors are not allowed to go without heat in the winter, and that no American goes to bed hungry.

    (3) Legislation must be passed which undoes the damage caused by excessive de-regulation.  That means reinstalling the regulatory firewalls that were ripped down in 1999.  That means re-regulating the energy markets so that we never again see the rampant speculation in oil that helped drive up prices.  That means regulating or abolishing various financial instruments that have created the enormous shadow banking system that is at the heart of the collapse of AIG and the financial services meltdown.

    (4) We must end the danger posed by companies that are “too big too fail,” that is, companies whose failure would cause systemic harm to the U.S. economy.  If a company is too big to fail, it is too big to exist.  We need to determine which companies fall in this category and then break them up.  Right now, for example, the Bank of America, the nation’s largest depository institution, has absorbed Countrywide, the nation’s largest mortgage lender, and Merrill Lynch, the nation’s largest brokerage house.  We should not be trying to solve the current financial crisis by creating even larger, more powerful institutions.  Their failure could cause even more harm to the entire economy.

  3. Grrrrrr….

  4. Not encouraging:

       Congress is reviewing the Bush Administration’s proposal to address the extraordinary crisis in our financial markets. It’s clear that the Administration has requested that Congress authorize, in very short order, sweeping and unprecedented powers for the Treasury Secretary to confront a financial crisis of historic proportions.

       Democrats will work with the Administration to ensure that our response to events in the financial markets is swift, but we must insulate Main Street from Wall Street and keep people in their homes by reducing mortgage foreclosures.

       In working with the Administration, we will strengthen the proposal by ensuring that the government is accountable to the taxpayers in any future actions under this broad grant of authority, implementing strong oversight mechanisms, and establishing fast-track authority for the Congress to act on responsible regulatory reform.

       As I told President Bush yesterday, we will also seek to protect lower- and middle-income Americans, who need to be protected from the fallout of the ongoing Wall Street crisis, by enacting an economic recovery package that creates jobs and returns growth to our economy.

    Notice anything missing?

    Like, oh I dunno, maybe any questioning at all as to whether giving Paulson a $700 billion blank check is actually the right thing to do in the first place?

    • robodd on September 21, 2008 at 03:09
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    per person.

    I’d be willing to pay that (over time), if we get some decent regulation and a governmental agency that oversees not just mortgages, but lending in its entirety.  And some regulation of corporate profits and compensation.  

    Let’s tuck a windfall profits/compensation tax in this legislation.  Restrictions on off shoring jobs and corporations.  Some congressional oversight, too.

  6. Using a crisis to screw the people even more.

    What is the monthly cost of the Iraq occupation, the occupation of Afghanistan, of maintaining over 700 military bases around the world, of the Pentagon’s monthly fuel bill, of black operations? These will be off-limits, untouchable.

    So now we have to consolidate executive power, cut “wasteful social programs”, strip the Bill of Rights even further.

    Coming soon. Watch for it, a financial Patriot Act, a World Bank / IMF program for the home team. After a brief charade the Dems will cave again. After all, we have a crisis on our hands. Is it incompetence this time, or has it been intentional or some of both? Who has benefited and who will pay for it?

    Our Republic is dead. The neo-liberals and neo-conservatives have killed the goose.

    • dkmich on September 21, 2008 at 16:15
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    The Legacy of the Clinton Bubble

    For six of eight years, Bill Clinton governed with Republican majorities in Congress. Not surprisingly, there was much continuity between the Clinton and Bush administrations. Both embraced the so-called Washington Consensus, a policy agenda of fiscal austerity, central-bank autonomy, deregulated markets, liberalized capital flows, free trade, and privatization. –snip–

    In 1992, Bill Clinton campaigned on the promise of a short-term stimulus package. But soon after being elected, he met privately with Alan Greenspan, chair of the Federal Reserve Board, and soon accepted what became known as “the financial markets strategy.” It was a strategy of placating financial markets. The stimulus package was sacrificed, taxes were raised, spending was cut-all in a futile effort to keep long-term interest rates from rising, and all of which helped the Democrats lose their majority in the House. In fact, the defeat of the stimulus package set off a sharp decline in Clinton’s public approval ratings from which his presidency would never recover.

    –snip–

    Perhaps the biggest of these bubbles was the inflated U.S. dollar, one of several troubling consequences of the Clinton administration’s free-trade policies. Although Clinton spoke from the left on trade issues, he governed from the right and ignored the need for any minimum floor on labor, human rights, or environmental standards in trade agreements. After pushing the North American Free Trade Agreement (NAFTA) through Congress on the strength of Republican votes, Clinton paved the way for China’s entry into the World Trade Organization (WTO) only a few years after China’s bloody crackdown on pro-democracy demonstrators at Tiananmen Square in Beijing.

    During Clinton’s eight years in office, the U.S. current account deficit, the broadest measure of trade competitiveness, increased fivefold, from $84 billion to $415 billion. The trade deficit increased most dramatically at the end of the Clinton years. In 1999, the U.S. merchandise trade deficit surpassed $338 billion, a 53 percent increase from $220 billion in 1998.

    Obama needs to dump Rubin and drive a stake through the heart of neoliberalism. Just as an FYI, the guy who wrote the article above donated $600 to Obama.  

  8. Here’s the US Senate list of Senators, with contact links. I was so ticked that I wrote both my senators twice.  I’m thinking of following up with a call tomorrow too.  

  9. Committee:   Contact the Committee. This link may be more likely to get your message to the Committee Members, rather than contacting them individually–if they are not your Senator.  I’ve contacted individual Senators, other than my own Senators, and gotten a standard “thanks for contacting me, but I’m too busy to read e-mails from people from other states” type response before.  Dodd isn’t my senator, so I’m going to use the Committee Contact form to e-mail him.

     

    • OPOL on September 22, 2008 at 15:46
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    Well done.

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