Bailout Nation — The Power Grab
Unstable Isotope pointed us to this draft of the bailout legislation earlier today. Look closely (highlighting mine):
(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and
(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.
This draft also excludes the actions taken under this bailout from review “by any court of law or administrative agency”.
I can’t — for the life of me — see any upside to this deal for taxpayers. We end up with the debt and the banks get to go back and party like it was 1999 — no incentives to change behavior, the people who created this mess employed at massive salaries and a Treasury that is not paying attention to the fundamentals (but given extraordinary power to erase the financial burdens of the bad actors in these same banks). And last, but not least, all of this new and unfettered power is being asked for by the folks that brought you Iraq, Katrina, the DoJ, spying on Americans and all of the rest of the epic fail that we’ve been living through. Several Dems and pundits have made the point that this is the time for Dems to get their secondary stimulus package through as a part of this deal. Now that I’ve seen the deal, I’m hoping that Democrats will focus on negotiating this deal so that this bailout doesn’t become a cleared field for more of a failed ideology. I’m hoping that accountability to Congress and to courts gets back in AND that someone builds in a better taxpayer upside.
Time to raise some hell, I think — with our Congressional delegation, the White House and the media.
EDIT: This isn’t promising. Josh Marshall cites a story from the WSJ of banking lobbyists already meeting with the Republican caucus to ensure that the deal is just the money, no strings attached.
It’s a terrible idea. We need to raise some hell about it, and do it quickly. I would rather have a few more days of roller coaster markets than a poorly thought out bailout plan.
I don’t think this is a done deal yet.
Here’s some numbers:
Switchboard Number for the House of Representatives: 202-225-3121
Switchboard Number for the U.S. Senate: 202-224-3121
I think this is spreading through the blogosphere. I’ve read that some are freaking out about the provision cassandra highlighted about appointing employees. I’m concerned about the lack of oversight and how it takes care of the banks first and not the taxpayers, but there’s a lot to dislike in this draft.
Crap – so this is the end game. They want the whole nut signed over to them.
They do. I just edited this to reference info from Talking Points Memo re: lobbyists currently at work on the Republican caucus.
The lack of both oversight and accountability (who makes sure that taxpayers get this good deal GWB and Castle say is possible?) bother me ALOT. What bothers me more is that they apparently think they can get away with it.
The whole nut and on top of everything Cassandra said about there being no real upside for taxpayers, there is also no explanation given as to why this should work . I think they really think the real estate bubble will come back if only the taxpayers agree to buy the shitpile debt and leave everything else as it is.
If this passes it is money being paid out to reward bad actors because everyone in DC wants to be able to continue to pretend that we are not fucked for another few months.
No, I mean a much bigger end game. Trying to get Social Security privatized was just nibbling at the edges. Now they want EVERYTHING – the whole treasury – the whole nut – turned over to hand-picked firms and individuals. This is Russian-style crony capitalism at our door.
I don’t want this even if Obama gets to pick the cronies.
The logical next step is some form of martial law… although you might not recognize it as such right away. But first, get the financial power grab done.
Why can’t Bush just get his buddies off the hook the old-fashioned way – pardon them?
This is a terrible plan. We must demand transparency! We’re about to put the foxes in charge of the henhouse – again.
Talk about making a bad situation worse. But this is typical Bush – take advantage of a crisis.
This McCain Ad just aired on the station I am watching.
The irony.
Who do these lobbyist think they are? They are coming to us with their hat in their hands and they’re demanding no oversight! They have a lot of nerve. The only recourse we have is to make sure our elected officials are more scared of us than of losing lobbyist perks.
That ad is unbelievable. I am speechless.
The end is nigh.
Off topic but crazy.
In that McCain ad there is an inadvertent truth. At the end it says “change is coming.” Yep, it certainly is from an Obama administration.
I agree anon, I don’t want any president’s appointees with this much power. I certainly don’t trust Bushies but I don’t think Obama appointees with this kind of power is that much more comforting.
I just ordered 4 Snuggies… since I won’t be able to heat my house this winter!
anon –
Right there with you… this will be the biggest theft of all time… the incredible amount of additional power this concentrates in the Fed is insane… the Treasury Secretary and Fed President will have more power than the President.
I don’t care whose cronies get appointed, we lose billions anyway!
It is insane that we have gone from zero regulation (in the interest of free market economics) and have bailed out unregulated institutions (in the interest of free market economics)… if they want to have unrestrained capitalism I am OK with that, but this whole scheme is about getting us to pay for their mistakes.
Can we make the Snuggie the official blogger uniform?
I mean, when it is too cold for just underwear.
“If this passes it is money being paid out to reward bad actors because everyone in DC wants to be able to continue to pretend that we are not fucked for another few months.”
For once I’m agreeing with Jason. This bailout just rewards irresponsibility. Irresponsibility of regulators, of lenders, of borrowers, of the heads of these institutions, and of the idiot politicians who’s regulations set the stage for this mess.
What incentive does corporate America have to be responsible if they know Uncle Sam will bail them out whenever they fall on hard times?
FYI – You folks saying this is because we had zero regulation are nuts. Regulation caused a great deal of this mess, or at the very least was a significant contributor to the problem.
And McCain – Jesus. He sounds like a LIBERAL…….
Tax cuts for the rich, bailouts for the rich, bill to middleclass. The most frightening thing is the 700 billion they are talking about may turn out to be nothing more than a small down payment on future bailouts.
remember 2 million ARMs have yet to reset, unemployment is on the rise, credit card delinquencys are soaring, economys world wide are slowing down.
By the way, how are those tax cuts for the rich working out for ya, you remember, the ones that were going to spur investment and create thousands of new jobs?
A FEW MONTHS AGO ALL I CAN REMEMBER THE REPUK’S SAYING WAS THAT THESE FOLKS WHO WERE IN FORCLOSER HAD THEIR SELVES TO BLAME FOR MAKING BAD JUDGEMENTS. WHY DOESN’T THIS APPLEY TO THE BANKS AND INVESTEMENT HOUSES? JUST ASKING.
The one thing I’m hearing over and over again… We have to bail them out. They are too big to let fail.
Hmmm… if these companies are too big to fail, then maybe they were too big to exist.
Duncan Blacl (aka Atrios) says…
Seeing the AP picture of Bush, Bernanke, and Paulson standing up at a podium addressing a vast economic crisis – it is like some kind of nightmare.
Only one presidential candidate, a Republican, long warned of what is now unfolding and cautioned against exactly what these corporate national socialists from both parties are doing to our country.
For years it has been his mantra, railing against this evil greedy Wall Street-DC nexus. Despite his foresight and wisdom he was constantly and often-viciously assaulted for his prescient views.
http://www.youtube.com/watch?v=Ixw1IRhUD-o
He spoke of the transfer of wealth from the middle class to the ultra-rich by way of this money-printing bonanza and the fact that we have anything but real free markets.
http://www.youtube.com/watch?v=Qfyo7cUevwY
Not so crazy now, is he?
TT – RE Comment #18. It should apply to the banks. We shouldn’t be bailing them out, nor should we be bailing out GM.
“The one thing I’m hearing over and over again… We have to bail them out. They are too big to let fail.”
Bear in mind you’re hearing that from both sides of the political aisle. I know you folks will try to blame the bailout business on Bush, but it’s got bipartisan support.
TPN is right Ron Paul called this whole deal. Too bad the national media enforced a press black out against Paul.
Someone else has been talking about deregulation for a while…
http://www.alternet.org/workplace/74327/
There is action we can take. NO BLANK CHECK FOR WALL STREET. See below and go to the website and read what Robert Reich has to say .
Congress is on the brink of making a one-sided deal to give George W. Bush a blank check to bail out his pals – offering nearly (or perhaps more than) a trillion taxpayer dollars to Wall Street to cover its bad debts. That works out to somewhere between $2000 and $5000 from every American family. So what do the taxpayers get in return?
Nothing. No new regulation or oversight to help avoid this kind of crisis in the future. No public interest givebacks to help people whose homes are in the hands of the banks. Perhaps most shockingly of all, the taxpayers get absolutely no share in the profits if and when these finance giants bounce back, even though we are now assuming a great deal of the risk.
This is worse than a bad deal – this isn’t a deal at all. This is a blank check to some of the richest companies in the world.
Sign a petition calling on key members of Congress to impose a few sensible conditions to this bailout in order to protect the American people.
Please have a look and take action.
http://act.credoaction.com/campaign/no_blank_check/?r_by=912-1732336-iO4WQ8x&rc=confemail
I work for a financial firm. I have a MBA. I am probably somewhat better informed than the average taxpayer.
I am not a lunatic big government freak, I happen to share a lot of the views of ‘true conservatives’ on the issues of how our nation handles its finances.
I am a huge Robert Reich fan.
All that said, I find it completely abhorrent that we are bailing these people out. To deregulate the behavior of these firms is to decide that the government has no responsibility for them. The fact that we are bailing these firms out is a an indictment of the no regulation mantra coming from the right. If we as taxpayers have to have responsibility for these failures then we should have had regulatory oversight. This is a failure by those that represent us.
If we bail these firms out with no upside potential for the taxpayers (based on what I have seen so far the taxpayer is screwed anyway) than this is corporate socialism. It is theft. This is a crime.
The democrats did nothing to reign this in. I sincerely hope they at least stand up and try to make this at least theoretically something that the government can eventually benefit from if the market for these securities can get settled out.
Well said “Not Brian”, unlike you I do not have a MBA. However, I have been in the mortgage industry for the past 5 years trust me people you do not want any part of these loans that were on their books. And not because people were dupped were all adults here it was simply mob mentality. I am still in disbelief that all of these firms were so heavily leveraged with subprime loans and that alone would bring them down? I mean talk about no consequences for their actions what the F? This is disgusting at the least, we are going to clear Wall Streets bad debt ledger and put it on the average joe’s back? 2007 Fannie Mae’s CEO, 18million in payout company 2 billion in loses, only in America! “Hell of a job Brownie” The real WMD will be when those loans continue to explode onto the main street. I will call tommorow to DC not sure what else we can do, hell maybe Paulson will call me tommorow and tell me I’m debt free, yipie!
TPN is right Ron Paul called this whole deal.
Of course, the gold bugs have been predicting financial collapse for over 100 years.
I hope this does not go thru but it looks like it will. I agree this is the beginning of a total economic collapse……………