Tuesday, September 23, 2008

Not So Fast

There's a great little piece on AlterNet today: "10 Things You Should Know about Bush's Trillion Dollar Fleecing Plan." I wasn't aware of them all, but each of them gladdens my heart. I'm also heartened that Congress generally is balking at embracing the White House "solution" for the current financial crisis. Finally our lawmakers are saying "not so fast" to something the White House wants to jam through it. I was just being paranoid when I said earlier that the White House was going to get what it wanted here. It's become increasingly apparent that it won't. But that in itself brings up the troublesome thought that perhaps this was the plan all along. Present something so utterly fascist that the administration could make a few concessions to the outrage and still get what it wants. Bear in mind that I define anything the Administration wants as unacceptable by definition. Hence my continued nervousness about this bailout, albeit not the degree of nervousness as before.

Oh, yes. Those 10 things you should know--all of this in relation to the unadorned Administration bailout plan:
  1. Shock Doctrine: it takes disaster to force unpopular measures. A depression which will result, according to the Administration, if the bailout doesn't happen, actually does have some salutary effects. And if taxpayers are going pay to avoid it, they can demand a slew of reforms and conditions.
  2. Is there really "consensus" that something has to be done? No . . . how did everybody come to universal agreement on the solution between last Friday and yesterday?
  3. Is this bailout procedure even legal? No. It's blatantly unconstitutional because of the dictatorial powers it gives the secretary of the treasury.
  4. Some lawmakers are really pissed off. Obviously.
  5. Opposition to the plan is coming from across the political spectrum. When William Kristol agrees with Paul Krugman, we're in an alternate universe.
  6. However unlikely, there are ways around having the taxpayers put up the rescue money. Government could force the banks to stop paying dividends and to issue new equity.
  7. Elements of a progressive bailout: a] financial institutions swallow the bulk of the losses with taxpayers stepping up only when necessary; b] minimization of opportunities for gaming the system; c] minimization of the moral hazard--i.e., don't punish people who did the right thing--lived within their means and made the necessary sacrifices. For example, don't allow those who took excessive risks in loaning money to failing institutions such as Goldman Sacs and Lehman Bros. to profit from the bailout; d] if government acquires delinquent mortgages, it must take all steps to see that people remain in their houses, even if they have to rent, and even if the government takes a loss; e] restriction of rescued companies' executive compensation.
  8. Ongoing negotiations will improve the bill. Not that the unadulterated rape of the taxpayer that was proposed would be immune to improvement.
  9. The fact that foreign banks are beneficiaries of the current plan could wreck the whole thing.
  10. Is this a signal of the decline in American power? Well, yeah . . . Chinese commentators are saying: "The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States."
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