News just in about an audacious proposal, dreamt up by the Treasury Secretary Hank Paulson, and fully supported by the current Bush Administration, designed to bail out the fall out of the mortgage/sub-prime crises.
The details?
Alarmingly THIN but for the fact that it will cost tax payers $700 billion dollars. But get this, the draft proposal for this $700 billion Bailout Plan says (in section 8):
"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."
This means that the Secretary is not accountable for anything or anyone. In fact, s/he is not bound even by law! I suppose this magnitude of power and lack of accountability is not entirely surprising given this is the same Administration that legalised/socialised concepts such as pre-emptive strike, waterboarding, warrantless wiretaps etc.
Which then begs the question, why would anybody vote for McCain when he supported Bush's policies 95% of the time in 2007, and 100% in 2008.
Even a former beauty queen can't save that kind of bogus statistic.
Monday, September 22, 2008
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Yeah you're right. Everything this administration has done seems to be aimed at being above the law. They want free rein to do anything at all... with taxpayers money no less. It's always interesting to see how the top %2 of the population (the disgustingly wealthy people) get bailed out with corporate welfare by everyone else. Yet when the middle-class looks for someone to blame, they aim their blame downwards. "Oh noes, the poor people are getting more money with this minimum wage rise. Our prices will go up!". SO stupid.
ReplyDeleteShrug. Sometimes I wonder if it's worth fighting against - why are scared people so easy to manipulate? But then I'd never want to be like them...
Hey I found a good quote from Metafilter.com about this that contradicts everything I said. It looks pretty good though and is a good argument FOR the bailout.
ReplyDeleteLet me quote it here:
[...]
Part of the problem is people like you are spreading the falsehood that the entire $700 billion line of credit that the Treasury is asking for will purchase assets whose value is zero. That is completely, utterly, and blatantly false. Moreover, it underlines a significant disconnect between what's actually occurring in the banking world, and what non-financial spectators think is happening.
This credit line (and that's EXACTLY what it is: a CREDIT LINE, NOT A LOAN, and not a bailout in the sense that banks are just getting free money (if the equity plan gets included)) is primarily like a Liquid Plumber for the economy. Right now, the main pipes that move money (banks) are clogged with crappy assets. If the major pipes get clogged, the rest of the economy follows. What we have here is a crisis of confidence. People who help the banks find investors/savers and spenders are saying, "We don't want to do business with you, because we don't trust that the clog won't kill you." So the Treasury and Fed are trying to remove the clog as quickly as possible, before the economy starts to feel the REAL repercussions.
Are those assets crappy? Yes. Are they worth zero? A few of them, sure. But a GREAT MANY OF THEM have real value, and will show that value once the clog goes away. Why did Lehman's bonds trade at 18 cents, and their subs trade at a penny? Because the clog is so great, no one is willing to step up to the plate. So the vultures lowball, and create a deflationary spiral.
[...]
From SeizeTheDay
http://www.metafilter.com/75081/Ponzi-Scheme-Credit-Default-Swaps-in-2004-vs-2008#2270103
Sigh. My brain hurts. I don't know what to think. And the global economy is only one of the lesser reasons why my brain is working overtime today :(