Tuesday, September 23, 2008

Immunity? BIG RED FLAG!!!!!

                                                                                                                                WHAT ME WORRY?

Not just immunity~ but retroactive immunity.  Yes, the Treasury would like us to sign off on giving total immunity to itself.

For one, this would make Paulson, "dictator of our economy" immune from any sort of legal review “by any court of law or any administrative agency,” over whatever actions he takes on this matter. 

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. (Section 8 of the bailout).

The administration’s draft law also would preclude court review of steps Paulson might take, something that could be used to mask previous illegal activity.

“The Treasury’s ability to, without oversight, determine (that) a financial institution (is) an agent of the government seems like it could be used to serve several purposes, including limiting the potential liabilities of an institution or its executives,” he wrote in a note to investors late Sunday. He plans to retain Wall Street firms as advisors to decide just how to cut deals to value and mop up Wall Street's dubious paper. There are to be no limits on executive compensation for the firms that get relief, and no equity share for the government in exchange for this massive infusion of capital. Both Obama and McCain have opposed the provision denying any judicial review of decisions made by Paulson. The fox watching the proverbial (financial) henhouse.

Smartass remark ahead...
That would rid us of that potential extra cost of executive jail time.

Otherwise, they wouldn’t be writing their enabling legislation to avoid that.

Complete authority, no accountability ~ The Bush Mode of Operation.

But seriously-- if the first thing they come up with is legal immunity, then we have got to say no. If covering their asses legally is the first item on the financial crisis agenda, while they are also discussing giving bailout billions to banks OUTSIDE the US, then you can't help but think they themselves are about to embark on shady dealings that they themselves are either unsure of, or know are illegal. It would not surprise me that an insider, such as Paulson, is quite aware that some of the practices that got these businesses into this crisis are potentially illegal.

If you dig further, it is common practice for high finance companies to give out billions in bonus money to their employees. Lehman gave out $8.7 billion last year, in bonus money, now they are filing for bankruptcy. How much perk money did Bear & Stearns, AIG & Fanny & Freddy toss around (squander)? We should not be picking up those tabs, and we should have full disclosure. Immunity should be OFF THE TABLE.

We've had enough unregulated, shady dealings in the world of banking & high finance.

The last thing we want to do is add this free for all immunity for the Bush administration to fuck things up more, and be able to shrug & walk away.

Cash for Trash
Published: September 21, 2008

"Some skeptics are calling Henry Paulson’s $700 billion rescue plan for the U.S. financial system “cash for trash.” Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Ira

There’s justice in the gibes. Everyone agrees that something major must be done. But Mr. Paulson is demanding extraordinary power for himself — and for his successor — to deploy taxpayers’ money on behalf of a plan that, as far as I can see, doesn’t make sense.

Some are saying that we should simply trust Mr. Paulson, because he’s a smart guy who knows what he’s doing. But that’s only half true: he is a smart guy, but what, exactly, in the experience of the past year and a half — a period during which Mr. Paulson repeatedly declared the financial crisis “contained,” and then offered a series of unsuccessful fixes — justifies the belief that he knows what he’s doing? He’s making it up as he goes along, just like the rest of us.

The plan calls for the federal government to buy up $700 billion worth of troubled assets, mainly mortgage-backed securities. How does this resolve the crisis?
It will be crippled by inadequate capital unless the federal government hugely overpays for the assets it buys, giving financial firms — and their stockholders and executives — a giant windfall at taxpayer expense. Did I mention that I’m not happy with this plan?

But Mr. Paulson insists that he wants a “clean” plan. “Clean,” in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency,” and this adds up to an unacceptable proposal.

I’m aware that Congress is under enormous pressure to agree to the Paulson plan in the next few days, with at most a few modifications that make it slightly less bad. Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now.

But I’d urge Congress to pause for a minute, take a deep breath, and try to seriously rework the structure of the plan, making it a plan that addresses the real problem. Don’t let yourself be railroaded — if this plan goes through in anything like its current form, we’ll all be very sorry in the not-too-distant future.

Huff PO writes this:
But one cannot overstate this: Section 8 is a singularly transformative sentence of economic policy. It transfers a significant amount of power to the Executive Branch, while walling off any avenue for oversight, and offering no guarantees in return. And if the Democrats end up content with winning a few slight concessions, they risk not putting a stop-payment on the real "blank check" - the one in which they allow the erosion of their own powers.

Over in the Senate, Christopher Dodd has proposed a bailout legislation of his own, which critically calls for "an oversight board that not only includes the chairman of the Federal Reserve and the SEC, but congressionally appointed, non-governmental officials" and would require the President to appoint an "independent inspector general to investigate the Treasury asset program." In Dodd's legislation, Section 8 is effectively stripped from the bill.

Nevertheless, the fact that Section 8 of the Paulson plan seems to strike few as a de facto dealbreaker can and should astound. The failure of Congress to hold the line on this point would be truly embarrassing. But if we make it through this week with nobody in the press specifically informing the public about the implications of this single sentence - in the middle of a complicated bill, in the middle of a complicated time - then right there, you have the single largest media failure of this year.

We can't preach to the choir & shout out against this amongst ourselves, in the blogosphere.
Please rant, rave & rattle cages in Congress. Tell them NO to this nonsense.
If deregulation got us into this mess- total immunity will not get us out of it.


DivaJood said...

Not subject to judicial review. Hmmm.

This is why I've been decorating my shack with cardboard.

Fran said...

Oregon Senator Ron Wyden: Unless we address the underlying faults in the system that brought us to this financial abyss in the first place, we may simply be building the world's largest bridge to nowhere.

Something really stinks here huh Diva??
The only silver lining is it's an election year- wrote just that in an e mail to Rep Senator Smith.(R-OR.)
We are watching this closely. you vote for this irresponsible measure, you can kiss your job goodbye.

Fran said...

Oregon Congressman Peter DeFazio (D-OR) put it this way:
After months of telling us "Our fundamentals are sound."....
Then Thursday night Paulson has a closed door meeting with congressional leadership and he says, if we don't do a bailout plan tomorrow, the economy is going to collapse.

Wait a minute. This guy has been consistently wrong and out of touch or he's been lying to Congress and the American people about how sound our fundamentals are. Now he wants us to trust him with the keys of the treasury and no restrictions on how he would spend the money in his next bailout.

He is compromised in my opinion because of his relationship with Goldman Sachs and Wall Street not with Main Street America. "2007 was a great year on Wall Street. Bonuses of $38 billion to themselves. Secretary Paulson came to us after just having received a $39 million bonus from Goldman Sachs. He came here to the applause of the Wall Street elites and others.My small banks are not clamoring for this. They are still making loans.

They are saying "there's a credit crunch". Guess what? If you got good credit in Oregon, you go to the credit union, or you go to the small bank and they can sell the loan to the federal government. That is Fannie Mae and Freddie Mac thanks to Mr. Paulson.

But he's saying to us here, "I got a deal for you." Let’s think of Henry "Hank" Paulson as a realtor. Here’s the deal. He has a great house he wants to sell you. The thing about that is he can't give you an appraisal on the house, as there are no market comparables. And he can't tell you what it's going to cost. But it is a great deal for you. That is the bailout he is proposing.

Secretary Paulson wants to take this junk from Wall Street that no one understands and put it on the federal books. But, what if we spend, or rather borrow, $700 billion and the market continues to go down? That’s what the Asian market said yesterday.

Wait a minute. Sounded good at first but where's the U.S. going to get the $700 billion? Who is going to lend it to them? Or are they going to print it and cause inflation? What if it doesn't work? What will they do then? We aren't dealing with some of the fundamental underlying problems that we have.

Now I find out by reading the Washington Times that they have very quietly folded in all student loan debt, all automobile debt, and all credit card debt. So, the federal government is now not only going to be in the housing business, it's not only going to be in the insurance business, suddenly we are going to be in the repo business--out there collecting cars around America so we can sell them to try and get back some of the taxpayers' money. This is nuts.

Congress should not do this this week. We need to understand what's going on. They can't be slipping in little things like this and trying to jam this bill through. This is way too much like the rush to war when Congress was under pressure before elections. Forget about the elections. This is about the future of the United States of America and our financial system. If we have to stay here every day in October to understand this and get it right."