Sunday, September 21, 2008

Zandar's Thought Of the Day

SecTreas Henry Paulson was on teevee today, bumrushing all the Village Idiot shows, saying that if we don't get this passed AS IS, THIS WEEK, America is done for.

AS IS of course is a $700 billion check to the Bush Administration with quite literally zero oversight and zero regulation. It's a twelve digit number given to the same people who told us to trust them implicitly on Iraq, Afghanistan, torture, civil liberties, the PATRIOT Act, rule of law, executive privilege and oh yeah, the economy.

So now they want to pass the largest intervention in the free markets in 70 years or so in a matter of a few days, giving them 100% implicit trust that this is absolutely necessary and that they are doing this only because there is no other choice.

So why question is this: Why exactly should we trust the Bush administration on this again? Can anybody honestly give me a single, solid reason why we should trust them with $700 billion with no oversight given their conduct over the last eight years?

If you can, I'll shut this blog down and vote McSame.

UberBailout UberBacklash

It's looking like lawmakers on both sides have a serious problem with the UberBailout.
As the U.S. government takes stronger measures to stabilize financial markets, some former Federal Reserve officials, lawmakers and Wall Street executives are saying too much has already been done.

``Every time they intervene, they do more harm than good,'' said Peter Schiff, president of Euro Pacific Capital in Darien, Connecticut, a brokerage that manages $1 billion. Critics of the rescues agree that government actions, such as those that prevented the failures of Fannie Mae, Freddie Mac and American International Group Inc., can't postpone the inevitable worsening of housing and financial markets.

They say the bailouts by the Fed and Treasury also encourage future reckless risk-taking by investors. ``If we don't stop now, there will be no end,'' said Gerald O'Driscoll, a former vice president of the Dallas Fed and now a scholar at the Cato Institute in Washington. He joins Vince Reinhart, former director of the Fed's monetary affairs division, and Marvin Goodfriend, a former official at the Richmond Fed in questioning the market interventions.

They're getting support from Republican lawmakers, who are stepping up their efforts to put a halt to further rescues. Yesterday a group of 100 lawmakers released a letter asking Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson to ``refrain from conducting any additional government-financed bailouts for large financial firms.''
Could it be that fiscally conservative Republicans and progressive Democrats could stop this?

The Sharks Smell Blood And Are Circling, Sir

Now, you didn't honestly think that a trillion dollars of oversight-free regulation-free money was going to just magically get past Wall Street lobbyists, did you? (h/t TPM)

Also, according to the Journal, finance industry lobbyists are already giving orders to Republican hill staffers not to allow any meaningful reforms or protections for taxpayers. So, just the money. No strings attached.

House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don't load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed.

"We're opposed to adding provisions that will affect [or] undermine the deal substantively," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation's largest banks, securities firms and insurers.

A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.

Nope. I didn't think so either. What I want to know is how exactly the hell Wall Street lobbyists get to call the shots on anything anymore? Oh wait, I remember: Wall Street is more than willing to take down the economy with them if they don't get exactly what they want out of this deal, which is the money. The GOP has been given their ultimatum. Give us the money or else. Do you see them drawing any real lessons about what got us into this?

Who gives a shit about the American taxpayer? Not these guys. They want their slice of the trillion with no oversight and no regulation so they can get right back to making risky deals with the profits they'll have freed up with this. The last ten days have clearly demonstrated that the Bushies have no clue how to fix the problem other than to throw money at it, and that Wall Street just doesn't care, they want the money and they want it now.

The only thing that will change when this too fails is the magnitude of the financial devastation. Uberbailout will have no meaningful regulation, no meaningful oversight, and no meaningful protections for taxpayers.

And it has no meaningful chance of working. But by then it's the next President's problem. This is nothing more than Bush dumping off the financial nightmare on the next guy. How many trillions will it take to fix this?

More than we'll be able to spend without destroying the economy.
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