Why All Americans Need To Oppose the Bailout As Currently Proposed

(8 am. – promoted by ek hornbeck)

The various merits and demerits of the proposal to create a fund for the acquisition of toxic securities and derivatives by the Federal government compose a huge list.  But one of the key provisions of the bill as currently proposed makes it unpalatable for any reason:

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.

Under no circumstances ought we allow this provision to become law.  Yves Smith:

This puts the Treasury’s actions beyond the rule of law. This is a financial coup d’etat, with the only limitation the $700 billion balance sheet figure. The measure already gives the Treasury the authority not simply to buy dud mortgage paper but other assets as it deems fit. There is no accountability beyond a report (contents undefined) to Congress three months into the program and semiannually thereafter. The Treasury could via incompetence or venality grossly overpay for assets and advisory services, and fail to exclude consultants with conflicts of interest, and there would be no recourse. Given the truly appalling track record of this Administration in its outsourcing, this is not an idle worry.

But far worse is the precedent it sets. This Administration has worked hard to escape any constraints on its actions, not to pursue noble causes, but to curtail civil liberties: Guantanamo, rendition, torture, warrantless wiretaps. It has used the threat of unseen terrorists and a seemingly perpetual war on radical Muslim to justify gutting the Constitution. The Supreme Court, which has been supine on many fronts, has finally started to push back, but would it challenge a bill that sweeps aside judicial review?

I urge you to read Smith’s entire post on why this ought to be opposed.  FWIW, economists from such disparate backgrounds as Paul Krugman, Tyler Cowen, and Bryan Caplan all agree this proposal is awful in its current form (Caplan, an anarcho-capitalist, has opposed all government bailouts).

33 comments

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    • Jay Elias on September 22, 2008 at 2:50 pm
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    …I’m quite sad that one of my Senators, Chuck Schumer, has been the main champion of this bill.  

    • pfiore8 on September 22, 2008 at 4:35 pm

    Obama’s reaction to this? or are the democrats gonna sign more important shit without reading the fine print?

    this proposal isn’t acceptable in any one of its derivative forms. our money should not be used to buy bad debt. that is not our government’s business. fucking regulating markets is their business. but not investing my money in bad debt and then looking to sell it.

    and whatever other mechanisms are in this proposal to control tax payer money and markets. or is one needed when the the secretary’s authority is absolute? what the fuck. this just gets crazier and crazier by the day.

    jesus christ. and the people making this proposal are the ones who set the entire system up. what makes anyone think they have the vision to correct this? or that they actually want it corrected?

    a blanket NO. these are not the people to be making proposals. we need the Krugmans in the country given oversight power. People who actually may have the interests of this country at heart.

  1. But thank you, Jay!

    I just want to put up this action page for right now — No Blank Check for Wall Street!

  2. some of the Dems are negotiating about oversight and a couple of other things. IF they are successful (which I’m not sure is likely), would that change your opinion about the deal?

  3. I think you really highlighted the problem here:

    what really causes me and a lot of other people a lot of concern is just how interconnected this whole mess is.

    But I think Bushco is using the difficulties in disentangling the complexity to be able to understand, mixed with another huge dose of fear mongering, to rush this through quickly.

    It’s similar to the “we can’t afford to wait until the smoking gun becomes a mushroom cloud” syndrome in order to push into action without adequate thought.  

  4. Sorry to have read you all wrong lately. Don’t think congress will push back on this just enough to as the pols like to put some lipstick on this pig. Think I’m to riled up to be blogging so sorry if I offended.      

    • ctrenta on September 22, 2008 at 10:17 pm

    Thanks Jay. I was going to write something about this but you beat me well too it. Huffington Post made it their top story on the Web site right now.

    We cannot let this thing pass folks. Things are pretty safe for here in Vermont. Bernie Sanders is already against it and I’m confident Pat Leahy and Peter Welch will follow. But it’s the Blue Dog Dems that could tilt the balance in the GOP’s favor and we CANNOT let them pass this bailout B.S. You do realize this is comparable to an economic Patriot Act, right?

    GET OUTRAGED FOLKS! DON’T LET THIS PASS!!!!

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