One Man’s Trash Could Cost the Rest of Us a FortuneBy
Following up on Uptown Ruler’s post, this is what I’ve come up with after a weekend’s worth of reading about the financial mess and the $700 billion bailout proposed by the Bush administration:
1. The proposed plan is one part Shock Doctrine:
What is more intrinsically corrupt than allowing people to engage in high-reward/no-risk capitalism — where they reap tens of millions of dollars and more every year while their reckless gambles are paying off only to then have the Government shift their losses to the citizenry at large once their schemes collapse?
One part Patriot Act:
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.
…Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets–property, houses, shopping centers–that could be readily resold by the Resolution Trust Corporation at bargain prices. This crisis involves ethereal financial instruments of unknowable value…
2. Wall Street is already relying on congressional Republicans to game the system:
Titans of the financial industry are battling to influence the government’s financial rescue plan, a package that will create new winners and losers in the sector.
Democrats in Congress want a rescue package that benefits homeowners at risk for foreclosure, not just Wall Street. Securities houses don’t want executive salary limits for banks that participate in the rescue.
House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don’t load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed.
A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.
3. Democrats are facing the final test of their resolve versus the Bush administration, and some in the Democratic caucus fear that their side could very well blow it again, as described by a Democratic congressperson in this hypothetical scenario:
Here’s the industry’s play: progressives will approach Nancy with ideas for reform, and she’ll agree to push for their proposals, and she’ll really mean it. Then industry lobbyists will go to Dennis Moore, Melissa Bean and a few other Democrats, and tell them how dire the consequences of the proposals would be, and that the members who understand how the economy works need to step up to stop Nancy and the crazy liberals from doing something rash.
4. The two names I’ve bolded in the quote above belong to a group of congresspeople who, ironically, pride themselves on this:
The Coalition has been particularly active on fiscal issues, relentlessly pursuing a balanced budget and then protecting that achievement from politically popular “raids” on the budget.
5. Our own representative, Heath Shuler, belongs to this group, too:
Heath is a proud member of the fiscally responsible Blue Dog Caucus. As one of the largest and most influential caucuses in Congress, the Blue Dogs reinstituted Pay-As-You-Go budgeting in the 110th Congress, which forces Congress to manage its budget just like families and small businesses. He has also worked to bring long-awaited accountability and transparency to the budget and earmarking process.
So will Shuler back up Senator Obama and insist â€” at the very least â€” that any bailout adhere to the seven principles Obama has outlined, especially number six?
The American people need to know that we feel as great a sense of urgency about the emergency on Main Street as we do the emergency on Wall Street. That is why I call on Senator McCain, President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families.
Well? Will you, Rep. Shuler? Because that’s the only thing I couldn’t figure out from what I read this weekend.