Republican leaders in Congress are warning Democrats not to load up the Treasury Department’s emergency bailout bill with help for homeowners or others facing economic hardship — all while avoiding a direct endorsement of the bill themselves.
“Efforts to exploit this crisis for political leverage or partisan quid pro quo will only delay the economic stability that families, seniors and small businesses deserve,” House Minority Leader John A. Boehner (R-Ohio) said in a statement issued Saturday afternoon. “Going forward, I hope we all can agree that we should keep any legislation as straightforward as possible while doing everything we can to protect American taxpayers.”
Senate Minority Leader Mitch McConnell (R-Ky.), who is up for reelection in November, said the Treasury’s $700 billion bailout plan must not become a vehicle for "partisan plans and pet projects" if it is to receive congressional approval next week.
After looking at the stock holdings of the gang of thieves responsible for this, I'm going to make sure to get on the phone tomorrow and tell my representatives, "No deal." There is absolutely nothing in here for the American people other than leaving us with the bill after the dinner in the nice restaurant. Paul Krugman has looked over the bailout plan and says:
As I posted earlier today, it seems all too likely that a “fair price” for mortgage-related assets will still leave much of the financial sector in trouble. And there’s nothing at all in the draft that says what happens next; although I do notice that there’s nothing in the plan requiring Treasury to pay a fair market price. So is the plan to pay premium prices to the most troubled institutions? Or is the hope that restoring liquidity will magically make the problem go away?
Here’s the thing: historically, financial system rescues have involved seizing the troubled institutions and guaranteeing their debts; only after that did the government try to repackage and sell their assets. The feds took over S&Ls first, protecting their depositors, then transferred their bad assets to the RTC. The Swedes took over troubled banks, again protecting their depositors, before transferring their assets to their equivalent institutions.
The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.
And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.
The draft plan is here. Go read it and then imagine having Phil Gramm be the Treasury Secretary gaining all this unaccountable, unquestioned, absolute power on January 20, 2009, as is likely under a "Palin and McCain Administration". Yes, that would be Phil Gramm of "nation of whiners" and Gramm-Leach-Bliley Financial Services Modernization Act fame, which allowed commercial and investment banks to merge, repealed part of Glass-Steagall, and directly led to the mess we face today. But Gramm also profited personally (and handsomely) from this legislation, when the Swiss bank Union Bank of Switzerland (UBS) acquired Paine-Webber, whereupon Gramm went to work for UBS' newly acquired investment banking arm and later lobbied Congress on behalf of UBS on mortgage issues. And this is the guy John McCain wants as his Treasury Secretary, who would inherit this power.
Every day (or "ivry dee", as Sarah Palin would say), the picture of what the United States would look like under John McCain's stewardship becomes clearer, and it's not a pretty one. This November is a referendum on Americans as a people. We are either going to salvage this country as best we can, or we are going to let ignorance and medievalism and racism and bigotry and fear rule -- and hand over what little we as middle class working people have left to those who already have more money than they can spend in two lifetimes.
The choice is ours.
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