Never Again Is What You Swore The Time Before
Last week's Friday afternoon news dump included this little gem - "Text of Draft Proposal for Bailout Plan". Thankfully I'm in decent physical condition because this is truly lexicographic cholesterol.
I was most indignant and perturbed upon learning of this development, so last Saturday evening, I wrote an email to the Senate Banking Committee. The text of that message follows:
Dear Honorable Senators,
I have read the bailout proposal that was posted on Friday the 19th, and I find it extremely disturbing. It essentially gives the secretary of the Treasury sole authority to spend seven hundred billion dollars of taxpayer money on pretty much anything he wants, and to do with it as he wishes. The oversight provisions are laughable too: he must report to Congress twice a year. There is no accountability whatsoever in this proposed legislation. Knowing how the Bush Administration operates, there will be precious little transparency as well. Lack of transparency and accountability is what got the financial markets into this dire situation in the first place; I hardly think that more of the same will get us out.
This bailout plan is deeply flawed in another way as well: it punishes the taxpayers, does nothing for distressed homeowners, and rewards the financial elites whose sociopathic greed and cosmic hubris led them to gamble trillions of dollars of other people's money on the belief that *this* time was different - that the value of real estate would go up and up for ever. This is a fundamentally immoral plan as currently presented.
I freely admit that I do not have the answer. I do, however, have some principles that I believe any acceptable plan should follow.
1) What is being done with the taxpayers' money should be absolutely transparent to all of us. That means constant disclosure: daily, not every six months.
2) The money should not be under the control of an appointed ideologue. Congress should create an organization under its control analogous to the RTC that mopped up the S&L crisis.
3) The bailout organization will be held accountable by not giving them all the money at once. If they want more, they need to come before Congress and explain in public hearings why they need it and how they spent the last batch.
4) The erstwhile "Masters of the Universe" that absolutely did know better - did know what the eventual consequences of their actions would be and didn't care should also be held accountable. At the very least, they should forfeit most of their pay and bonuses from the past five years. The people on top should become acquainted with the inside of a prison cell.
5) The bailout organization should be charged by Congress to put the sanctity of the taxpayers' money as its highest priority. The taxpayers would be the investors in this organization, and it should make acquisitions and sales to benefit them, not the corporations being bought and sold.
I hope very much that you take the time to debate this very serious situation, and not be bullied or pressured into approving a dangerously flawed piece of legislation.
Sincerely,
...
Last week's Friday afternoon news dump included this little gem - "Text of Draft Proposal for Bailout Plan". Thankfully I'm in decent physical condition because this is truly lexicographic cholesterol.
There is of course more where that came from. This week they've tried to tack on allowing payments to foreign holders of illiquid mortgage-backed securities, abandoning even the pretense that this plan is somehow good for the country. Bush has also come out strongly against cutting the pay of executives. But, but, then they couldn't afford their penthouse on Central Park West, and the summer house in the Hamptons, and they might have to trade in the Lamborghini for a Lexus... how proletarian!Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
...
Sec. 8. Review.
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.
I was most indignant and perturbed upon learning of this development, so last Saturday evening, I wrote an email to the Senate Banking Committee. The text of that message follows:
Dear Honorable Senators,
I have read the bailout proposal that was posted on Friday the 19th, and I find it extremely disturbing. It essentially gives the secretary of the Treasury sole authority to spend seven hundred billion dollars of taxpayer money on pretty much anything he wants, and to do with it as he wishes. The oversight provisions are laughable too: he must report to Congress twice a year. There is no accountability whatsoever in this proposed legislation. Knowing how the Bush Administration operates, there will be precious little transparency as well. Lack of transparency and accountability is what got the financial markets into this dire situation in the first place; I hardly think that more of the same will get us out.
This bailout plan is deeply flawed in another way as well: it punishes the taxpayers, does nothing for distressed homeowners, and rewards the financial elites whose sociopathic greed and cosmic hubris led them to gamble trillions of dollars of other people's money on the belief that *this* time was different - that the value of real estate would go up and up for ever. This is a fundamentally immoral plan as currently presented.
I freely admit that I do not have the answer. I do, however, have some principles that I believe any acceptable plan should follow.
1) What is being done with the taxpayers' money should be absolutely transparent to all of us. That means constant disclosure: daily, not every six months.
2) The money should not be under the control of an appointed ideologue. Congress should create an organization under its control analogous to the RTC that mopped up the S&L crisis.
3) The bailout organization will be held accountable by not giving them all the money at once. If they want more, they need to come before Congress and explain in public hearings why they need it and how they spent the last batch.
4) The erstwhile "Masters of the Universe" that absolutely did know better - did know what the eventual consequences of their actions would be and didn't care should also be held accountable. At the very least, they should forfeit most of their pay and bonuses from the past five years. The people on top should become acquainted with the inside of a prison cell.
5) The bailout organization should be charged by Congress to put the sanctity of the taxpayers' money as its highest priority. The taxpayers would be the investors in this organization, and it should make acquisitions and sales to benefit them, not the corporations being bought and sold.
I hope very much that you take the time to debate this very serious situation, and not be bullied or pressured into approving a dangerously flawed piece of legislation.
Sincerely,
...
Since I wrote that, there has been some good pushback from the Democrats, and it seems that even some Republicans are realizing that this is not in their best interests. Their reasons may be a little different than mine, but I think there's a good chance that we can beat this back and maybe even put forth a progressive alternative...
Senator Obama, are you listening?
posted by Stochastic Eclectica at
7:39 PM
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