"Dirty Secret of the Bailout"

Discussion in 'Politics, Religion, Social Issues' started by jplan2008, Sep 22, 2008.

  1. jplan2008 macrumors regular

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    #1
  2. Peace macrumors Core

    Peace

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    #2
    That is very un-constitutional.

    Even a lower court would overturn that.
     
  3. Dont Hurt Me macrumors 603

    Dont Hurt Me

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    #3
    Here we go again, almost as bad as a highway from Mexico to Canada with Congress having no say. Its time to start throwing out all the bums who are selling out this country.

    They really want to get rid of the Constitution and this Dumb...s congress is letting them.
     
  4. jplan2008 thread starter macrumors regular

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    Yeah, the problem is that Bush does everything in emergency, crisis mode. What they say is probably true that a bill has to be passed very quickly. So they put Congress in this position of blackmail. But they could have done something LONG before this to prevent it. And even responding to the emergency, Paulson is saying he started making this "last resort" plan 30 days ago. Why didn't he talk to Congressional leaders before Thursday night, and not present his formal proposal to them until Saturday or Sunday?

    I agree about Congress, but the "throw the bums out" approach doesn't usually work. We'd get more Bush-thinkers number one (since more incumbents are Democrats), and fresh faces, but the same type of politicians if it's not accompanied by any other changes.

    I agree with the last paragraph in the link I posted:

    Nevertheless, the fact that Section 8 of the Paulson plan seems to strike few as a de facto dealbreaker can and should astound. The failure of Congress to hold the line on this point would be truly embarrassing. But if we make it through this week with nobody in the press specifically informing the public about the implications of this single sentence - in the middle of a complicated bill, in the middle of a complicated time - then right there, you have the single largest media failure of this year.
     
  5. nanofrog macrumors G4

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    Gotta love the current administration/GOP's love for eliminating oversight. :eek: This so well thought out. :rolleyes:
     
  6. Thomas Veil macrumors 68020

    Thomas Veil

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    Reminds me of the Patriot Act. I hope Congress reads this one before passing it.

    And you wonder why Obama hems and haws when asked about bills like this? It's not that he's indecisive or a flip-flopper -- he'd just like to know what the hell he's being asked to agree to.
     
  7. r.j.s Moderator emeritus

    r.j.s

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    #7
    So the Secretary would be running the country then? Sounds like fun ... :rolleyes:
     
  8. jplan2008 thread starter macrumors regular

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    Yeah, lot's of fun. Hopefully the Democratic proposal will go through which at least take away freedom to do unlawful activity. I've also seen that so far they've agreed to congressional oversight, but haven't seen any details.


    http://leahy.senate.gov/press/200809/092208a.html

    Leahy-authored language concerning court review:

    Section 8. Limits on Review
    In General – Any determination of the Secretary with regard to any particular troubled asset pursuant to this Act shall be final, and shall not be set aside unless such a determination is found to be arbitrary, capricious, an abuse of discretion, or not in accordance with the law.

    Bush administration proposed language on court review:

    Section 8. Review.
    Decisions made 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.
     
  9. mkrishnan Moderator emeritus

    mkrishnan

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    #9
    [​IMG]

    Nice picture.

    This is certainly an interesting detail... so I guess the question is, just how much more damage can the administration do in the last six months or so?
     
  10. Don't panic macrumors 603

    Don't panic

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    i am not sure we want to know.
     
  11. jplan2008 thread starter macrumors regular

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    Another new aspect of proposal:

    "In one expansion of its original proposal, the administration is asking for broad power to buy up virtually any kind of bad asset — including credit card debt or car loans — from any financial institution in the U.S. or abroad in order to stabilize markets."

    And, regarding standing up to Bush, this is really standing firm, wait and see how hard the Bush side fights:

    "A partisan battle was brewing over the bankruptcy provision for homeowners' mortgage payments, a key Democratic demand.
    "We'll see how hard they fight — it's something we care about," Frank said.
    "

    Another issue:

    "Democrats demanded that the measure limit pay packages for executives of companies helped by the biggest financial rescue since the Great Depression. The administration was balking at that, and also at a proposal by Democrats to let judges rewrite mortgages to lower bankrupt homeowners' monthly payments.
    President Bush prodded Congress during the day to pass the rescue plan quickly, declaring, "The whole world is watching."
    "

    http://news.yahoo.com/story//ap/financial_meltdown

    I can't find anything one way or another if they're going with the Administration or Democrats on the "Dirty Secret" mentioned.
     
  12. mactastic macrumors 68040

    mactastic

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    #12
    So according to Bush/McCain the fundamentals of our economy are strong up until last week when it suddenly got so bad that we have to rush through emergency legislation to fix it?

    Who's neo-conning who now?
     
  13. jplan2008 thread starter macrumors regular

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    That's pretty much what Senator Bernie Sanders says.

    http://www.thenation.com/doc/20081006/sanders

    For years, as a member of the House Banking Committee and now as a member of the Senate Budget Committee, I have heard the Bush administration tell us how "robust" our economy was and how strong the "fundamentals" were. That was until a few days ago. Now, we are being told that if Congress does not act immediately and approve the $700 billion Wall Street bailout proposal these "free marketers" have just written up, there will be an unprecedented economic meltdown in the United States and an unraveling of the global economy.

    I also found something in his article I hadn't realized:

    (In truth, it could be much more than $700 billion. The bill only says the government is limited to having $700 billion outstanding at any time. By selling the mortgage-backed assets it acquires--even at staggering losses--the government will be able to buy even more resulting is a virtually limitless financial exposure on the part of taxpayers.)
     
  14. SMM macrumors 65816

    SMM

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    #14
    This proposal is without any merit whatsoever. How much can we steal without anyone being able to look? Whoever wrote this should be looking at a pinkslip. This whole buying of bad debt is insane. For crissake America, wake up! :mad:
     
  15. r.j.s Moderator emeritus

    r.j.s

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    #15
    Unfortunately, I dont think anyone will wake up in time.
     
  16. hulugu macrumors 68000

    hulugu

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    Never dare a daredevil.

    Cynical, but true. I'd like the media to start talking about this because it's really an important aspect of a major bill. I was worried about the expansion of powers before I read about this, now I think it's a deal breaker.
     
  17. rhsgolfer33 macrumors 6502a

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    Its not like the Democratically controlled congress doesn't have to pass it first...

    In other words you mean, got to love this current congress' love for eliminating oversight. That paragraph could probably be easily removed... that is if any of our law makers actually read the bills instead of having their numerous college interns read them and submit a sentence on a note card telling them what its about.

    I love how its always blame the administration time, there are two other bodies that are actually legislative bodies that presumably have control of what they pass and don't pass. Yeah, the administration sucks, but give me a break, there are more people that just those sitting in the executive branch to blame, regardless of party.

    Politicians suck, period, there's yet to be a good one and there never will be a good one. I'm so tired of this election crap already, I'm abstaining from the presidential vote, I don't want to feel responsible for which ever jackass the American people manage to elect next.

    The government is buying companies, how much farther can its powers expand?
     
  18. hulugu macrumors 68000

    hulugu

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    #18
    It's the executive branch that's submitting such a bill, so they should be critiqued for such a dangerous proposal, but you're right that Congress shouldn't survive unscathed if they pass it.

    I would argue that the administration is trying to setup Congress politically, if Congress demands changes to the bill, expect the administration to blame the Democrats in congress for delaying important legislation. It's a game being played when there's serious work to be done.

    And, you're right, between the administration's willful refusal to follow the Constitution and most of the amendments and this new corporatism, the Federal government has become a monstrous thing and most of the checks and balances have been broken during a breakneck run towards a unitary executive branch.
     
  19. jplan2008 thread starter macrumors regular

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    Since they have apparently come to agreement so far on some measure of oversight, then no, the Democratically controlled Congress didn't and won't pass the provision apparently. The executive branch has a lot more control over this area -- i.e., all the control. It's the Commissioners and Secretaries etc. that control the overall economic policy.

    I agree that the Democrats have let Bush get away with some things, but when the Democrats have a very slim control, and it's not veto-proof, if they simply don't pass anything the administration asks for, then all we hear about is "Congressional deadlock, get the bums out." And, like I said, if they're presented an emergency (that Bush caused), that they MUST deal with immediately, how much time is there for debating?

    And again, they (the executive branch) had been working on this for AT LEAST A MONTH. First, they tried stop-gap measures, then they realized they needed to go for their bigger plan. So, if they had wanted real debate and real input from the legislative branch on the ... legislation ... they would have gone to them over the course of the month. Instead, Congress has to take in the situation and pass a bill that the President will sign in less than a week.

    I think the long-term causes of the problem come from deregulation and lack of oversight when there was actually regulation in place. But the executive branch over the past 6-7 years, as this crisis has been building, shoulder nearly 100% of the blame. When the Democrats tried to pass some regulation on the markets over the past 6 years, most of that was shot down.

    Don't vote ... yeah, that'll show them.

    "...Huddled in his office Wednesday with top advisers, Treasury Secretary Henry Paulson watched his financial-data terminal with alarm as one market after another began go haywire....

    For at least a month, Mr. Paulson and Treasury officials had discussed the option of jump-starting markets by having the government absorb the rotten assets -- mainly financial instruments tied to subprime mortgages -- at the heart of the crisis. The concept, dubbed Balance Sheet Relief, was seen at Treasury as a blunt instrument, something to be used in only the direst of circumstances.

    One day later, Mr. Paulson and Federal Reserve Chairman Ben Bernanke sped to Congress to seek approval for the biggest government intervention in financial markets since the 1930s. In a private meeting with lawmakers, according to a person present, one asked what would happen if the bill failed.

    "If it doesn't pass, then heaven help us all," responded Mr. Paulson, according to several people familiar with the matter.""

    http://wsj.com/article/SB122186563104158747.html
     
  20. rhsgolfer33 macrumors 6502a

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    I definitely see what you're saying about setting Congress up politically, but you'd figure that Congress would be smart enough to expose the flaw to the mainstream media whilst demanding a change to that particular part of the bill. There are certain things I understand the Democratically controlled Congress wanting to change in this bill, this being one of them, but adding caps on executive pay and lowering foreclosures at companies that are part of the bailout aren't things I understand adding to this bill. Can a truly adequate measure for either one of those things be added to a bill that is already going to be quite complex? I don't really think so and I don't see the point in wasting time dabbling in those matters. The bailed out companies still need to be run with business in mind, and capping executive pay is definitely not going to get you the best executives. Think any executive would work at AIG for a measly million? I sure as hell wouldn't.

    I never thought I'd see the day when the government would pretty much be acquiring companies by purchasing their debt. Oh well, what's another $700 billion? Its a short term fix at best. I haven't really decided if we actually need any new financial regulation, are mortgage companies actually going to be dumb enough to offer negative amortization loans again? I'm thinking it won't be terribly likely. There definitely needs to be some sort of stimulus to get these companies offering any credit again, we can't rejuvenate a lending and housing market if creditors aren't willing to lend.

    The government should also offer some finance classes to children and adults. Lets make a five hour finance class mandatory to receive a loan from any FDIC insure organization and lets make beginning personal finance and accounting a mandatory course in high schools. It always amazes me when I see 18 year olds with a $1000 or so in credit card debt, I guess we start young here. American's, especially out here in California, clearly have no idea that on a $100,000 income you cannot in any way afford the mortgage on $1,000,000 home. If only people and banks actually understood this in the last few years. Oh well, I imagine when I go to buy a house in the next 10 years I'll be able to get me a nice deal.

    I would definitely like to know which bills you are taking about that would have regulate the markets. I don't recall any significant bills relating to housing or mortgage regulation that would have avoid the current crisis.

    Not voting as a registered voter is as much of a statement as voting. I'll still vote local, state and for my rep. Maybe I'll vote for Ron Paul, we'll see. Does it really matter who wins? Probably not, our economy will recover at some point regardless of who is elected president or what is done at this point. Whether we legislate the markets or not, the business cycle will eventually prevail. Honestly, I'll be going into the accounting workforce in the next two years and more regulation means a higher salary for me, so I say let the Democrats and Republicans legislate all they want. Sarbanes-Oxley all ready added about $10,000 to my salary, lets see what they come up with next. Plus, GAAP will allow me to work overseas just about anywhere I please, so I'm not terribly worried.
     
  21. fivepoint macrumors 65816

    fivepoint

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  22. hulugu macrumors 68000

    hulugu

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    Now, I'm a little freaked out.

    Apparently, Newt Gingrich has written an op-ed "Before D.C. gets our money, It Owes Us Some Answers"

     
  23. r.j.s Moderator emeritus

    r.j.s

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    #23
  24. hulugu macrumors 68000

    hulugu

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    :eek:

    Argghhh! Newt can't be right about something.

    I must be wrong, because some of his ideas sound pretty good.
     
  25. r.j.s Moderator emeritus

    r.j.s

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    #25
    Those are your keywords.
     

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