There are so many aspects of the proposed bailout that should send shivers down any thinking individual's spine that I hope each and every C&Ler take a few minutes to contact their representatives tomorrow to express their distrust of the bailout as written. From the ironically-labeled Section 8:
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.
to the announcement by Treasury Secretary Henry Paulson (oh hell, let's just call him President Paulson now, because he's effectively running the country) that the bailout would include foreign companies as well:
STEPHANOPOULOS: The original legislation we saw said that you would be buying up the mortgage-related assets from financial institutions having headquarters in the United States. Yet last night, the fact sheet put out by the Treasury seemed to expand that. It said only that the financial institutions have to have significant operations in the U.S., and that you could waive that at your discretion.
So, will foreign financial institutions be eligible to have their assets bought?
PAULSON: Yes, and they should, because as you think about this, 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.
That's a distinction without a difference to the American people. The key here is about protecting the system.[..]
But, remember, this is about protecting the American people and protecting the taxpayers. And the American people don't care who owns the financial institution. If a financial institution in this country has problems, it'll have the same impact...
What a giant, steaming load of bovine excrement. The LAST thing on Paulson's mind is protecting the taxpayers...we are financing his buddies' golden parachutes, with no oversight, no changes and no guarantees that we won't be IN THE EXACT SAME PLACE in a couple of months. Because if Paulson gave two bits about the American people, he would be in favor of the Democratic plan to give some relief to homeowners instead of making sure that he can hand cash over to foreign companies. Note the complete sidestep (shame on you, Stephanopoulos, for letting him get away with it) of what the taxpayers get back in return. Even conservative blogs are finding this bailout to be ridiculous:
We're setting precedents that will govern the behavior of the international business community for decades to come. Do we really want to signal that risks are public and rewards are private?
For that matter, do we really want such fundamental decisions being made by obscure, unaccountable men like Bernanke, Paulson, and SEC chair Chris Cox? Shouldn't Congress and the president be more than bit players?
Speaking of those who have forgotten history, dooming us all to repeat it, C&Ler Diane emailed me a link to this BBC-Radio4 documentary, Document, that has quite a few parallels to today's financial climate.