Ten Reasons Why Bush's Proposed Bailout Is Larceny
The unimaginably disastrous Bush Bailout Plan Proposal brings good news to Democrats: Democrats in Congress have finally learned not to act hastily when frightened, then given the bum's rush by the Bush White House.
Remember the rushed, hasty run-up to the Iraq War? Remember how that turned out?
And that's a good thing, considering that the Bush bailout proposal is little more than a license to steal from American taxpayers. (See Ten Reasons Why Bush's Proposed Bailout Is Larceny.)
The New York Times reports today, "Congressional Democrats began to set their own terms on Sunday for a plan to rescue the nation’s financial institutions, including greater legislative oversight of the Treasury Department, more direct assistance for homeowners and limits on the pay of top executives whose firms seek help."
And there's more good, surprising news: a handful of top Republican leaders have begun to speak-out against the Bush Bailout Plan Proposal:
- From conservative William Kristol: "I’m doubtful that the only thing standing between us and a financial panic is for Congress to sign this week, on behalf of the American taxpayer, a $700 billion check over to the Treasury."
- From former House Speaker Newt Gingrich: "Watching Washington rush to throw taxpayer money at Wall Street has been sobering and a little frightening... Congress had better ask a lot of questions before it shifts this much burden to the taxpayer and shifts this much power to a Washington bureaucracy."
Noted liberal Princeton economist Paul Krugman expresses it best, though, when he writes, "Everyone agrees that something major must be done. But Mr. Paulson is demanding extraordinary power for himself... to deploy taxpayers’ money on behalf of a plan that, as far as I can see, doesn’t make sense. "
I simplify the major problems of the Bush bailot plan at the quick-reading Ten Reasons Why Bush's Proposed Bailout Is Larceny.
Once you read it, I suspect you'll agree that I'm not overstating the unacceptabliity of Bush's exquisitely timed, last-chance power grab before the presidential election.
I agree there should not be a Congressional bailout and ask anyone who agrees to send the petition at the site listed below to their Congressmen/women:
financialpetition.org/petition-nobail
The petition reads:
Stop The Bailouts!
We the Undersigned Americans, having seen two 500-point selloffs in the Dow over the last week, witnessing the bankruptcy of Lehman Brothers and the bailouts of AIG, Fannie and Freddie, and seeing over eight hundred billion dollars of new debt being taken on by America that we do not have, demand immediate action of our Congress and Executive.
All the “bailouts” and other similar actions have accomplished is to speed up the economic and market crash; they are now coming not on six month intervals but on one month intervals, and are more severe in each instance.
This ongoing crash in our markets was caused by a refusal to force banks and other institutions to stop lying about their debt – both in the “credit default swap” market and with so-called “Level 3″ assets. As a direct consequence of not being able to determine what a company is actually worth it becomes impossible for their stock to find price support.
In addition, it was the “excess liquidity” of the years from 2001 – 2007, intentionally created by Alan Greenspan and Ben Bernanke, that led to this mess – inappropriate and even fraudulent lending – in the first place. Providing “more liquidity”, which has been Bernanke’s primary strategy since last August, is like giving a drunk a bottle of whiskey as a “treatment”, and is equally indefensible.
If this is not stopped the selling will rotate from financial stock to financial stock until all are zeros. Each will in turn need to be “bailed out”; down this road lies disaster as not only will the stock market crash beyond anything since 1929, but in addition we will take on so much new Federal Debt that it is very likely that foreign governments will refuse to fund our deficits – a threat that China issued, obliquely, through their official State newspaper on the 17th of September.
This is likely to produce a bond market “dislocation” and crash in the economy similar to the 1930s if it is not stopped now. You have been petitioned in the past on these measures but have failed to act; you must now choose between decisive and immediate action and being responsible, in full, for the consequences.
We insist that Congress and Treasury:
Direct Ben Bernanke to “drain the swamp” and shut down the TSLF, PDCF and TAF, returning the “slosh”, or free liquidity, to normal levels. We must take the bottle of whiskey away from the drunk.
Direct The SEC, OTS and OCC to have all financial firms mark to market all assets on their books, bring all off-balance-sheet vehicles back on the balance sheet, and stop hiding assets in “Level 3″ where values are literally made up.
Insist that all “over the counter” derivatives either be moved to an exchange with a central clearing party, thereby enforcing margin limits and providing published open interest figures, or, in the alternative, declared void.
Direct that all firms with a federal guarantee or “backstop” of any sort, including but not limited to investment and commercial banks, be strictly limited to a leverage ratio of 12:1, which is the natural limit for a system with an 8% reserve.
Remove all “game-playing” with reserves in our nation’s banks, including “zero reserve” sweeps and other similar evasions of reserve requirements, as this game-playing is part and parcel of the excessive leverage that created this mess in the first place.
Remove Treasury’s authorization to issue more debt for bailouts or any other purpose without an explicit Congressional authorization for each such action. Hank Paulson said he would not use his “Bazooka”; he lied. In addition he has now announced plans to issue $100 billion of funds for “more slosh” to be provided to The Federal Reserve, yet nowhere has this been authorized by a specific bill in Congress. Per the Constitution, all spending bills must originate in The House.
Remove all regulators involved in willful blindness from office, including the Mr. Lockhart (formerly OFHEO), the OTS, OCC, FDIC and SEC chairs, Treasury Secretary Paulson and Fed Chair Ben Bernanke.. All must be replaced immediately as all have willfully looked the other way for nearly a decade – or more – while this fraudulent credit bubble was being fostered.
These remedies cannot wait for the next Congress; Henry Paulson, Ben Bernanke and the other regulators are increasingly “making it up as they go along”, with the latest instances adding (according to the CBO) $5.3 trillion dollars to the Federal Debt, or a doubling in just one act, plus the additional $800 billion spent on other bailouts and “market stability actions” – all money we do not have.
We VOTE and elections are held November 4th, 2008.
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If you’d like to “sign” this petition, enter your information below and click “SIGN”. This petition will be faxed to President Bush, your members of Congress, and Henry Paulson, Secretary of the Treasury. You may only sign the petition once, and your email address must be valid (the system will email you a confirmation code and instructions.)
I have read the above petition and agree with its contents. The above information is my registered voter address, or, if I am not registered, my legal address, I am qualified to vote, and will so register prior to the next election
Deborah, for once you and I are in total agreement.