September 21st, 2008

Pixel Stained

It's a coup

Not that Treason in Defense of Slavery gets it (he it seems, hates America more than one might have previously thought. Certainly he doesn't understand the principles on which it was founded).

I was aghast when they made the SecHomSec a virtual dictator (in the pursuit of building a version of the Berlin Wall on the Mexico/US border he can do pretty much anything he wants and the only thing which can be done is for the President to fire him; it's a really badly written thing).

But the new version of the S&L Bailout is huge. It's not really a bailout. To be, I hope, over the top, the insanity of the system (one in which credit beyond our means is the way we keep our economy afloat; the sort of nonsense where we let creditors who extend loans to people who have no hope of repaying them have laws creating debt peonage passed, so the overextended spending can continue... but I digress) is being used as if it were our very own Reichstag Fire.

I desperately hope this is over the top, but I am terribly afraid I'm not.

Look at what the bill (a really short bill; of the sort where hard choices make for bad laws) says (I am also amused [in a twisted, and cynical, way] to hear the Adminstration [and it's fellow traveller McCain], pleading for gov't to intervene, lest the "Free Market" they've been working to establish, should do what markets do, esp. because they say there is nothing Gov't can to well, and that the solution to all problems is to Let the Market Work, but, again, I digress).

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.–The Secretary 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 having its headquarters in the United States.

(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.

Don't worry though, this more than 700 billion dollar (because that's the limit of debt they can incurr... nothing stops them from respending anything which comes in from the things they buy and sell) will be managed well.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for–

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

That's right, they are going to protect you by buying high and selling low..

Don't worry, the bankers will still make money.

Just in case you were afraid the more recent excesses might be left out (you know, the one's related to the problems the financial world has been talking about for at least two years. I know I was talking about it 2005, when I say negative amortization loans being touted on TV in 2005; as means to buy a first house, for those who couldn't get a regular mortgage, not to worry,

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.–The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008

So every bit of bad paper, right up to last week, will be covered by the wallet of the taxpayer.

All of that is bad enough (spend too much on a credit card, owe for the rest of your life. Extend credit on punitive terms to people you know can't pay... The gov't will let them starve, but see to it you can still make millions. It wasn't the whores and petty thieves Jesus upended at the Temple, it was the money changers who robbed the poor), but it's not the part which chills my bones and makes me think the Larissa Alexandrovna was right.

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

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.

Non-reviewable, not by any court, nor by any agency. In theory one could argue Congress could exercise oversight. It's a nice theory. And today it was announced that they want to change it to let the assets to be purchased also be those putting foreign banks at risk.

Add a couple more pieces to the problem (I did mention facism).

AIG is about to become an arm of the Executive Branch. AIG is a huge insurer. Lots of things, all over the world are done only because AIG insures them, "Nice Hydro-electric plan you have there, hate to see the insurance covering it go away..."

Not that economic extortion would be new (want to get aid for health care? No problem, but don't mention birth control or family planning), but this makes it something more flexible. We have the gov't taking over private businesses. Businesses whic expand the power of the executive. We have a officials who have been given huge powers, divorced from oversight.

And it's all in the support of a house of cards. We are asked to give the Secretary of the Treasury huge powers so he can rob Peter to pay... Peter.

Call your Senators. Call your Representative. Write the local papers. Go to the online papers and write a comment. Make a noise. This is bad law. There are better ways to do it (and there are examples of it. Britain did a bailout of insolvent companies, in exchange for stocks. In short the companies were held accountable... just as a private person would have been).

This shit matters.

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Who ya gonna call?

People keep talking about the horrors of living under Democratic administrations, the "tax and spend", the growth of Government, etc.

Which raises the question, who has done better in the economy, the budget, the size/growth of gov't.

Happily someone has done the work of collating the answers, sadly the links to Kevin Drum's CalPundit have died, but the rest of the data is there. Suffice it to say, that like the lie Obama is going to increase taxes, and McCain will put more money back in your pocket, those who favor a strong economy, a reduction in Gov't spending (and size), GDP (and job) growth, etc., should, be aware (to quote Harry Truman), if you want to live like a Republican, vote Democratic.

Forty Years: Comparing the Performance of the Democratic and Republican Parties