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Liberal Rage (tm)
Luna's Political Journal
The Economy & McCain 
22nd-Sep-2008 04:05 pm
b&w Run Lola Run
I'm no economic expert, but here are some links I've found helpful towards making sense of this bailout thing.

First thing to know is, they are utterly shameless. They wanna take $700 billion of your money, with no controls over what they do with it:

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.

Senator Bernie Sanders makes all kinds of sense. So does Robert Reich.

Meanwhile, McCain manages to be wrong about more things in a single sentence than was previously believed to be possible:

Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

(Obama has a new ad out calling him on it [YouTube].)

And as of last night, McCain still thinks deregulation was a good idea.

How can he think that? Well, this exceptional post, Three Times Is Enemy Action lays out the pattern of their misdeeds, and exactly how bogus the entire system was leading to this crash. Seriously, if you want to understand the deregulation crowd (including John McCain)'s sordid crisis-creating past, read this.

Does this massive turnover of funds and power constitute a coup? Personally, I'm not saying yes, but I'm not saying no.
22nd-Sep-2008 10:26 pm (UTC)
I'm not convinced this is a good idea, but that HuffPo article engaged in some tin-foil paranoia. They fundamentally mis-read the act. One example:

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

This section is pretty clear - they can walk into a bank, take it over, and then essentially mandate the employees to carry out various tasks which the government is already authorized to carry out under the Commerce Clause (tasks which will usually relate to shutting down the bank). It's already a power that the FDIC has on a smaller scale. As agents, the bank officials wouldn't have any power - the Treasury would.
22nd-Sep-2008 10:34 pm (UTC)
And not to mention, the mere fact that they call the decisions unreviewable doesn't mean they're unreviewable. That will get challenged and stricken in part under some pretty long-established Administrative law. That's standard language these days, and it's consistently struck down where appropriate. There will be no new legal ground broken here, unlike things like GITMO.

Having said all of that, I agree with about every word Bernie Sanders wrote, but that HuffPo article sounds like it's written by someone who simply has no idea what they're talking about.
22nd-Sep-2008 10:57 pm (UTC)
I'm glad you know this. I was close to panic. But then, I AM someone who has no idea what they're talking about.
22nd-Sep-2008 11:12 pm (UTC)
Yeah basically the real question here is whether or not this is a good use of resources and whether or not this constitutes a massive golden parachute for the banks. That's a serious question with serious repercussions - this would be more expensive than the Iraq war. But there's no coup going on here - it may be fraud on a massive scale, but this proposal doesn't challenge the fundamental workings of government.

Basically, people have to identify what can be done to save the economy without rewarding the banks, but the problem is that we're going into this after the damage is already done. So while "punishing" the people responsible for this sure sounds good, if all of the major banks go under simultaneously, we'll only be punishing ourselves - the economy will cease to function and we'll be back in 1929 again. The question becomes as much philosophical as anything else. You can bar using this money for compensating exempt (management) employees, but the banks can do a shell game and simply use their own money for compensating management-level employees.

At the end of the day, I think most people agree that these loans need to be somehow moved to the Treasury without creating golden parachutes, and without bankrupting major financial institutions all at the same time, and that Treasury needs to then offer renegotiated loans to allow these people to either (a) stay in their homes or (b) sell their homes in an orderly manner that doesn't involve a firesale. It's easy to say that we shouldn't have large companies that are "too big to fail," and it's also correct to say that, but right now we have large companies that are too big to fail.

I almost see it as treating tobacco-induced lung cancer. Yes, it's a huge outlay of money for something that was easily preventable - the patient could've simply chosen not to smoke. But the patient did smoke and now has lung cancer, and we have to deal with the problem moving forward - we can't go back in time and force the patient to stop smoking. We can, however, ban or heavily discourage smoking moving forward, and we can sue the tobacco companies in order to severely reduce their profit margins. But at the end of the day, refusing to treat the patient is not going to get you the result you want.
23rd-Sep-2008 04:58 am (UTC)
Thank you. That was so rational! I wish more people talked like you.
26th-Sep-2008 02:21 am (UTC)
And not to mention, the mere fact that they call the decisions unreviewable doesn't mean they're unreviewable.

Why is the phrase in there?
26th-Sep-2008 05:11 am (UTC)
Basically, to make it go to court. Some decisions would be considered under agency discretion, but the core program is reviewable. Having said that, I'm still glad they're fighting it out now.
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