Bush wants $700 billion -- and more -- for unregulated bailout czar
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Folks, we are at a bizarre place in American history. It began in large part with a garden-variety asset bubble, in housing prices, that most politicians to this day refuse to acknowledge. Inability to speak painful truths to the American people is the central hallmark of our democracy in 2008.
After years of denial and willful ignorance at all levels of government, this housing bubble has led us to where we are today: a predictable financial collapse, and an astounding and thorougly un-American power grab by the executive branch, which wants an economic czar with unchecked powers who would operate in private without meaningful congressional oversight.
Various links and headlines:
Section 8 of the president’s bailout proposal, the creation of an economic czar:
Decisions by the Secretary (of Treasury) 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.
The Los Angeles Times this morning:
...the Bush administration is asking Congress for the authority to spend $700 billion and for powers to intervene in the economy so sweeping that they have virtually no precedent in U.S. history. ...But the most distinctive -- and potentially most controversial -- element of the plan is the extent to which it would allow Treasury to act unilaterally.
... ‘It essentially creates an economic czar with no administrative oversight, no legal review, no legislative review. And it gives one man $700 billion to disperse as he needs fit,’ said Sen. Dianne Feinstein (D-Calif.), referring to Treasury Secretary Henry M. Paulson.
The $700 billion figure is misleading; it is not the limit of what the Treasury secretary can buy; it’s the limit of what the secretary -- the economic czar -- can have ‘outstanding at any one time’ in asset purchases. And don’t forget, the Bush administration has already backed another $285 billion in bailouts for Fannie Mae, Freddie Mac and AIG.
When the administration originally said its plan would only purchase ‘assets from any financial institution having its headquarters in the United States,’ it was, for lack of a better word, lying. Treasury Secretary Paulson this morning told ABC-TV that foreign banks can join the party:
‘If a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution,’ Paulson said.
‘That’s a distinction without a difference to the American people. The key here is protecting the system.’
With all due respect to Henry Paulson, what qualifies him to speak about what matters to the American people? How is it that a man who appeared clueless in the early years of this crisis (remember ‘containment’?) not only survives, but evidently also has the president’s blessing to put himself forward as an economic czar unparalleled in American history?
Paulson has been Treasury secretary for 27 months; what was he doing during the first 24 months? I second Lou Barnes’ assessment:
You hire an investment banker to look around corners for you. Relentlessly surprised, annoyed at the waste of his valuable time, Hank has only recently discovered that there are corners.
Enough Sunday morning bile and bloviation. The Ryder Cup is on. What are your thoughts? Comments?
--Peter Viles
Photo: Vice President Cheney and President Bush. Credit: Associated Press