I figure it's time to start a discussion here, and share my distress with those of you who care to examine this situation for yourself. Please feel free to comment. The site is moderated, but I promise you that I will post your comments unedited. The moderation is on only to prevent being 'spammed'.
As a starting point - here's a link to the Text of Draft Proposal for Bailout Plan as presented to Congress. Please take a read - it's 849 words, so at almost $1 Billion a word, as a taxpayer you shouldn't pass it up. It's one short piece of legislation!
So, now for some disturbing thoughts.
I'd heard that the proposal was 3 pages, so I expected fine print. NOT !! This was something spit out of a word processor on a moments notice. It is Outrageous to think that Secretary Paulson was caught so off guard, and had so little warning that this was the best legislative proposal that his entire staff could come up with.
If he was caught so unaware, it would disqualify his ability to solve this crisis. Certainly, it did not happen overnight - he should have been planning for this possibility. Considering his credentials my only conclusion is that it is fully his intention to get Congress to issue him a $700 Billion blank check. That is what his proposal amounts to.
In the back of my mind, alarm bells are ringing - GWB holds an 'emergency' meeting and press conference - threats of total economic disaster, a 'meltdown' unless Congress acts 'immediately'. These sound like the same scare tactics and doom and gloom warnings that the White House used to justify the Iraq war. In that case, some valid questions were raised; most people understand something about foreign affairs, so the White House manufactured some lies about WMDs and talked about the 'Al-Qaeda' link to Iraq even though it didn't exist to justify their demand for a 'blank check' for war. In this case, few in Congress or anywhere else can understand the details of the 'problem', so asking the right questions and getting the straight answers is especially difficult. Bernanke and Paulson are testifying in front of Congress, like Colin Powell did in front of the U.N. They talk of more foreclosures, frozen credit availability, massive job losses and generally paint a picture designed to strike fear into the hearts and stomachs of anyone listening.
Remember, these are the same people who basically called our economy 'strong' 6 months ago so what changed?
Especially disturbing is that it is unlikely that any hard facts as to the 'truth' of their warnings will be forthcoming. This is really based on their opinion, based on their assessment. It is all speculative, to whatever degree.
Other disturbing language - what little of it there is:
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.
What the heck? I doubt that this is legal. Removing review by the courts to legislation just because you don't want it to be? I don't think so. This amounts to 'no oversight, no questions'. What was the point? Do they simply want to be unfettered by such minor details such as legal review or congressional oversight?
Sure, they will report to Congress once per quarter, but report only - no questions, no accountability. They will be able to issue contracts regardless of any other public laws regulating their issue (another dubious legality).
The Secretary and the Chairman of the Federal Reserve are getting blasted by a bipartisan committee. Both sides of the aisle are upset with this charade of a proposal.
It's easy to digress into the details of what this is all about, but fundamentally, my bigger concerns are with larger moral and ethical concerns. Clearly the health of American financial institutions has been compromised. What to do about it raises larger issues that I'll explore on another continuing post.
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