...over the economy. The full text of the proposed legislation is available on several websites, such as this
Let me offer several key snips:
Sec. 8. Review.From Section 02: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.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.The current debt ceiling is, IIRC, several hundred billion below TEN trillion. We are going to in a rush bill give the SecTreasury the sole authority for hundreds of billions more of indebtedness? With no oversight?
Did the administration have this sitting on the shelf for yet another power grab, as they did USA Patriot Act? Is this the next step in America's equivalent of Hitler's Enabling Act?
Read the bill. Contact Senators and House members and urge them NOT to be panicked into approving this horrible piece of proposed legislation.
I have less confidence in our economy (and government) as a result of this wreckless spending. It was one thing to bailout a few key companies - but we are going from talking about hundreds of billions to now talking about trillions.
Democrats and Republicans need to be responsible. Any legislature who hasn't had time to read and study the impact of this legislations should VOTE NO.
Damn the political consequences. This issue - of driving our nation into insolvency - is more important than political winds. It's time that our Congress do the right thing and study this carefully before voting on it. This legislation will impact our nation for the next fifty years. Voting for it over a weekend is nonsense. Complete foolishness.
Definition:
Looting class
noun
An aristocracy of wealth and privilege, usually inherited. Seeks to preserve and enhance its relative status by reducing its taxes, both income and inheritance. Does so by increasing the relative tax burden on the working class while reducing the commodity price of labor as near to zero as possible, often by exporting jobs to areas of even cheaper labor. Assumes that labor is a commodity input, the chief purpose of which is to help maximize speculative profits accruing to the looting class.
The core leadership and funding for this class are provided by the looting trinity of Big Guns, Big Oil, and Big Pharma (G.O.P.), with key coordination and enabling provided by Big Banking. Perpetual wars and foreign occupations invariably enhance the portfolios of members of the looting class, for such conflicts create demand for more sales of Big Guns, while providing ample opportunity to help favored corporations loot the resources of the occupied lands and uncover speculative opportunities in commodities markets. But it is Big Oil which receives the most benefit from constant wars and rumors of wars, and it is Big Banking which receives the most benefit from constructing Ponzi schemes of derivatives (such a securitized sub-prime mortgages) based on astronomical, unregulated leverage ratios.
Labor, regarded as a mere commodity, is thought by the looting class to have no right to non-monetary benefits, such as health care, occupational or environmental safety, or reasonable amounts of leisure time. (If workers are permitted reasonable working hours and ample leisure and vacation time, they may find time to educate themselves and organize, rather than sit exhausted in the evenings in front a TV to watch the diversions and distractions provided by corporate media conglomerates, which of course are controlled by the looting class.) Such non-monetary benefits might reduce net profits.
The looting class seeks to preserve a system in which the workers are encouraged and even compelled to carry a huge burden of personal debt. The carefully instilled fear of losing one's job and facing bankruptcy helps to promote a docile work force disinterested in organizing to bargain collectively with the looters. Ever since the Reagan Administration crushed the Air Traffic Controllers, the looting class has waged a full-scale, generation-long, remarkably successful assault on the working class as represented by organized labor.
Government itself is purchased and manipulated by the looting class as a vehicle for promoting the looting class's particular interests, and the concept that government should promote the "greatest good for the greatest number" is utterly alien to the looter.
The ultimate goal of the looting class is to create a one-party state immune to political or financial challenge. The Corporatist Party may have more than one wing, such as a Republican Wing and a Democratic Wing, but the looting class seeks to ensure that its essential interests are fully preserved no matter which wing officially wields political power. And by putting in place the technology and statutes to create an Orwellian Surveillance State, the looting class seeks to ensure that no countervailing force can organize and arise from the public to challenge its supremacy.
The key precept of the looting class is the Corporate Golden Rule: he who has the gold, makes the rules. Profits are privatized, minimally taxed, and passed on to heirs. Losses are socialized and publicly funded. The looting class is relieved of all fiduciary risk, which is transferred to the working and middle classes, which are taxed to cover the looting class's losses at the Big Casino.
Now is a wonderful time to be a member of the looting class--maybe the best time in human history.
And here is the looting class's key slogan:
Privatize our profits! Socialize our losses!
The financial meltdown on Wall Street is an absolutely classic "crisis" opportunity as described by Milton Friedman, a shock and awe situation which so disorients the public that the Free Marketeers (acolytes of the Free Market "religion") can move swiftly in and, at one fell swoop, wipe the slate clean and re-direct the subject society into the new paths required by Free Market theory,as I explained most recently in my comment below in the comments to the diary "Cloud Cuckoo Land."
This is a very dangerous time we are in, people are frightened, disorder continues, we are threatened with even worse, and our fearless leader George W. Bush is attempting to seize this opportunity to tighten the grip of the Free Marketeers, and replace our democracy with something more to their liking. Mr. Bush's proposals are a Trojan horse.
And people read teacherken's diaries, because he has earned cred throughout the blogosphere. They would be unlikely to click on mine.
We are seeing a panicked rush to an economic counterevolution in the same way that we saw a rush to warrantless wiretapping and data collection in 2001 and to a pointless war in Iraq in 2003. Same tactics; likely the same result: a massive increase in the unchecked authority of the "unitary executive." It is an object lesson in crony/disaster capitalism.
Oh, and didn't Paul Wolfowitz tell us that in some magic way "oil revenues" would pay for the Iraq War? Who really believes that even $700 billion in taxpayer guarantees will be enough to bail out the looting class from this collapsing Ponzi scheme of practically infinite leverage on Wall Street?
Financially, we have become a banana republic.
Go for it. Here and wherever else you can post.
We've been sitting on the latter for decades and the former with each Republican in office.
This is the ultimate instance of passing the cost of corporate socialism on to the American people. Even if we win the white house, with this power grab any hope for a return to people powered government may go away for good.
The numbers just don't add up. This is WAY too much money for any type of stimulus. Nobody has even bothered to justify the number. It's like it was pulled out of thin air.
Why not $2 trillion then? Why stop at 1?
I'm not saying the government shouldn't inject something into the economy, but this is absurd. I believe that Congress should oppose this level of spending, and when we do reach an agreement on a reasonable figure there must be oversite and congressional approval. No more blank checks for this administration!!! How do you think we got into Iraq in the first place!!!
This is not USA PATRIOT ACT part 2. And this diary frankly surprises me. This is most definitely a Keynesian Economics move. And now suddenly everyone is adopting their Libertarian, Milton Friedman, Republican hats? I'm shocked.
Write to prevent this act if you want all your credit cards cancelled. As banks move to add more capital to their books, that means the credit market contracts. That means no new loans. That mean lines of credit shrink. Shrinking credit means people are out of jobs. It means a shrinking economy. It means if you don't have absolutely perfect credit history, kiss any chance of getting credit goodbye. By all means if you want to shoot yourself in the foot, who am I to stop you.
"This is most definitely a Keynesian Economics move. And now suddenly everyone is adopting their Libertarian, Milton Friedman, Republican hats? I'm shocked. "
We aren't talking about being Libertarians or Republicans here. We are talking about smart management of our tax dollars. Even the most liberal of us can appreciate that. Have you ever met a liberal who said "Gee, I hope the government will spend a trillion dollars to bailout bankers". I haven't. You don't need to be a Republican or Libertarian to manage money smartly.
Nobody has bothered to account for the amount or explain how the money will be accounted for. They want us to TRUST an agency which will not be restrained or subject to oversite. If you give people the power to spend money without control, that is exactly what they will do.
You are asking us to trust that the fed will spend this money wisely - without oversite. I can't do that because I don't trust them.
We are talking about $3300 per man, woman, and child in this country. A family of four, if this debt were averaged across our nation, would go in debt nearly $13,000 for this bailout. I can guarantee you that sending out $3300 checks to each man, woman, and child would help our economy more than bailing out the banks.
This is OUR money, and Congress is spending it as if we won't one day have to pay it back. And the burden on tax payers is too great.
Congress will still have oversight power. Treasury has to provide periodic updates on what they are doing with this act. And Congress can go back at any later date and change the act. The power they are granting is unique to handle a specific crisis. And in most cases I can recall, crises demand swift decision making. Those decisions may end up being good or bad, but they are trying to address a crisis. But ultimately someone has to be the decision maker for this. If we punish leadership in times of crisis, then what message do we send?
To your points about your money and the national debt, this is needed. It is not something we cannot do. Certainly if there is an alternative on the table to deal with this crisis, I would be open to it. But we can't do nothing and hope for the best. For the environmentalists in the room, this would be the Republican approach to climate change.
You are assuming, I believe, that we trade something of value for something of no value. And that is not true. These instruments still have value. Obviously, not every home is in foreclosure. Obviously, people are still able to pay their debts (for the most part). It's just that it is difficult to separate the good from the bad. And due to that difficulty, the market started to view the entire batch to be suspect and then assigned it basically no value. That is an overreaction because some still pay interest and for all of them the underlying assets are still there (maybe not worth as much). So, the entire $700 billion is not the exposure to taxpayers. We will at a minimum recoup a portion of that. And we will receive interest payments on these securities which will offset a portion of the interest bearing securities we need to issue to pay for them. So, it's not the same as the $700 billion we have spent on Iraq, that we will never see again.
Specifically, to pay for the bailout, which is estimated to cost up to $1 trillion, the government should:
a) Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would raise more than $300 billion in revenue;
b) Ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and
c) Require that taxpayers receive equity stakes in the bailed-out companies so that the assumption of risk is rewarded when companies' stock goes up.
(2) There must be a major economic recovery package which puts Americans to work at decent wages. Among many other areas, we can create millions of jobs rebuilding our crumbling infrastructure and moving our country from fossil fuels to energy efficiency and sustainable energy. Further, we must protect working families from the difficult times they are experiencing. We must ensure that every child has health insurance and that every American has access to quality health and dental care, that families can send their children to college, that seniors are not allowed to go without heat in the winter, and that no American goes to bed hungry.
(3) Legislation must be passed which undoes the damage caused by excessive de-regulation. That means reinstalling the regulatory firewalls that were ripped down in 1999. That means re-regulating the energy markets so that we never again see the rampant speculation in oil that helped drive up prices. That means regulating or abolishing various financial instruments that have created the enormous shadow banking system that is at the heart of the collapse of AIG and the financial services meltdown.
(4) We must end the danger posed by companies that are "too big too fail," that is, companies whose failure would cause systemic harm to the U.S. economy. If a company is too big to fail, it is too big to exist. We need to determine which companies fall in this category and then break them up. Right now, for example, the Bank of America, the nation's largest depository institution, has absorbed Countrywide, the nation's largest mortgage lender, and Merrill Lynch, the nation's largest brokerage house. We should not be trying to solve the current financial crisis by creating even larger, more powerful institutions. Their failure could cause even more harm to the entire economy.
What Sanders is talking about would be a landmark piece of legislation. That does not go through both houses and to the president's desk in a week or even a month. That would be too late to deal with what is going on right now. Sarbanes-Oxley, for example, came over a year after Enron and Worldcom's collapse.
Sure we need a complete turn around, and I don't think anyone doesn't see that. Even the last two investment banks on Wall Street can read the writing on the wall. But that is for the next administration.
In fact, I'd be surprised if the mainstream media, the Administration and most of our representatives aren't lagging behind popular opinion on this one. And, in this case, might it not be better to listen to the citizens of our so-called Republic, not only because the financial services industry that brought us to this point is behind the Paulson plan, but also because we were bamboozled into responding to a non-existent imminent threat in Iraq, and we all remember how that turned out?
I think people don't appreciate what occurred last week. Lehman is big, and government allowed it to fail. That has far reaching consequences. AIG is HUGE with its hands in every financial pot. When Paulson said government was not going to help them either, the market didn't step into to rescue AIG. And so we were back to a government rescue. If AIG had failed, it would have been a disaster. And then financial firm after financial firm would have been put on the brink of collapse.
This is a global crisis. It doesn't just affect us. Markets around the world fell off the deep end when Lehman failed and AIG was next. Central banks around the world then coordinated a massive influx of money into capital markets to maintain liquidity.
I don't think anyone is pulling the wool over your eyes when they tell you this is a big deal. It's not like Iraq. And I guess this is the danger of people like Bush and Cheney crying wolf. Just because you can go to your local bank and still pull out money, doesn't mean this isn't some heavy, heavy stuff going on. It's not Argentina style economic meltdown where the government has to freeze bank accounts, but then the US has access to a lot more capital than Argentina did.
I don't dispute that there are people smarter than I. There are certainly other plans out there to address this. We could try any number of those. I happen to think that this plan is not a bad idea. Either way this is a problem and it needs to be dealt with soon. We aren't in good economic times, and if we fail to deal with this somehow this could very well be the thing that makes things much worse. If we are not putting this plan on the table, then we would need something else on the table as an alternative. Something that would get through both houses of Congress and passed into law.
When, in this case, the lobbyists are meeting with House Republican staffers and using provocative words like "deal killers," about an amendment to Paulson's plan to give relief to troubled homeowners, it makes me suspicious.
Talkingpointsmemo.com quotes a Wall Street journal article about this, and another commenter in another thread in this blog described a provision of the Bankruptcy Reform Act of 2005 that made me think this was the "deal killer" idea. Specifically, judges under the 2005 Act are prohibited from adjusting the terms of loans to homeowners. Given the apparent importance placed by the lobbyists on any efforts to undo this provision of the 2005 Act, I might make this the very first question to ask Paulson in the first hearing on the bill.
To your points about your money and the national debt, this is needed. It is not something we cannot do. Certainly if there is an alternative on the table to deal with this crisis, I would be open to it. But we can't do nothing and hope for the best. For the environmentalists in the room, this would be the Republican approach to climate change.
What about a bottom up approach? Issue vouchers to every man, woman, and child in the US that must be invested in either a 401k, IRA, or existing mortgage?
Spreading $1T across a family of four is $13,000. This would also create a new investor class and prepare people who probably won't ever see social security money for retirement.