And there's this:
It states that the secretary—currently Henry Paulson, the multi-millionaire former CEO of Goldman Sachs—is “authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the secretary, mortgage-related assets from any financial institution...”
This is followed by a provision stipulating that the Treasury secretary’s authority under the act is “without limitation.”
A further provision authorizes the Treasury secretary to enter into contracts with the banks “without regard to any other provision of law regarding public contracts.” In other words, to ignore established law concerning public contracts.
The proposal states that the government will designate “financial institutions” to operate the bailout program. This means that the government will hand over management of the program to some of the very corporations that are responsible for the crisis and which stand to profit directly or indirectly from the bailout.
Bill Clinton is being blamed for the current crisis although it was a veto-proof Congress which set the stage for the mess.
More explanation of the Gramm-Leach-Bliley Act can be found here.
Typical Republican deregulation bullshit for which the taxpayers will pay dearly.
Henry Paulson will become a despot, something we sure as hell don't need in this country:
Noted Neocon (and terrorist) fundraiser Grover Norquist once succinctly expressed the goal of the Neocons to be to cut our government "down to the size where we can drown it in the bathtub." The Henry Paulsen plan to bail out stock and real estate speculators is the final throw in their efforts to bring this plan to fruition by so badly draining the United States Treasury that it will be generations to come before our government can undertake any further programs to improve the lives of the American people.
This plan is genuinely absurd, a power grab by the people in power intended to ensure that we become a society with only two classes, an inherited economic aristocracy made up of about one-half of one percent of our population, with the rest of us toiling out our lives in serfdom, never rising above bare subsistence at any point between our education, which will be devised to teach trades to serve the state's purposes, and our final death and burial in the ground.
If Paulsen gets his wishes here, he will become the economic, financial and monetary czar of the United States, with greater power than the rest of the executive branch, the Fed, Congress, or the courts. He will have REAL power over our lives to an extent not seen since despots ruled the nations of the east. Can you IMAGINE the parties to which he will be regularly invited, in hopes of currying his favor?
Paulsen's plan is to buy up all this mortgage-derived paper at face. Why is this the way to go here? The whole problem is bad mortgages. If the government wants to deal with this problem, why not a Federal guarantee on ALL mortgages up to 80% of its paper value. That way, the government must pay only when actual foreclosure occurs, and will take over the foreclosed properties. The mortgage lenders will have significant incentive to bargain on these mortgages because they will lose their 20% if foreclosure occurs. The Treasury will only be on the hook for properties that are actually foreclosed upon, and will then own the asset to sell to recoup all or part of its losses.
The bad paper will have its "goodness" restored, and the markets should resume functioning normally.
This wouldn't cost any $700 billion (the Paulsen plan will more likely between $1 and $2 TRILLION -- the costs have been systematically understated by Paulsen). Indeed, it would probably cost less than the ridiculous takeover of AIG last week. That a joke that is! They're an INSURANCE company, fer cryin' out loud!
What on earth about Henry Paulsen's performance to date brings anyone to the conclusion that he is the right man for this job? He is a crony bred of cronyism, certain to favor those with whom he has been in bed all along. He has been wrong about every other thing he's done, from the bailout of Bear Stearns to the present time. And why would we even THINK about this ridiculous plan, which serves to benefit only those whose heinously grasping greediness put us into this pickle without offering even a crumb to those of us hurt by this fiasco?
This is not an unprecedented problem. Panics like this used to happen to us all the time, and they happen all over the world on a regular basis. The cure, and there are only two ways to cure it, is either devaluation or a systematic strengthening of our dollar. These are the only ways we or any other country affected like this has ever dug out from under this kind of mess.
I hate devaluation. It rewards borrowers while penalizing savers, elevating the grasshopper above the ant. I LOVE the idea of strengthening the dollar, although this requires very painful steps to achieve. The two most painful of these steps are increases in interest rates, drawing capital into this country without selling off assets, and increasing taxes. The latter here can be done fairly and with a certain degree of rough justice by restoring STEEP progressivity to our income tax structure, taxing harmful industries (like oil and tobacco) heavily, and instituting new taxes on such things as corporate flight and savings held in offshore banks. And, of course, ending the tax favoritism received by capital gains.
If we did these things, we might be back on our feet before the 2012 election. If we follow Paulsen's plan, we can kiss our hopes for health care, education and infrastructure improvements goodbye until long after many of us are dead.
I don't mind being governed by a government. I HATE being ruled over by a despot, but it is clear that our current government is not run in a way designed to benefit folks like me.
Is this ever true. And yes, this is another anti-government scheme by the radical right to drain the Treasury so the government cannot pay for programs helping people. That's the whole aim in a nutshell.
Paul Krugman has criticism along similar lines.
No comments:
Post a Comment