Entries categorized "Emergency Economic Stabilization Act of 2008"

Pork Sells Bailout

Who says you can't buy votes?

The House on Friday passed a far-reaching and historic plan to bail out the nation's financial system.

The vote for passage of the Senate-amended bill - 263 to 171 - was the result of strong lobbying on the part of the White House and other supporters of the bill all week, following the House defeat of a similar measure on Monday - a defeat that shocked the markets and congressional leaders on both sides of the aisle.

The rest of the story is here.  Why is loading a bill with pork with the intent to influence an official decision not bribery? 

Senate Bailout Bill Loaded with Pork

We're in a huge financial crisis, right?  We're looking at another Great Depression, right?  So what's the Senate do?  They get together and create a pork-laden bailout bill. 

The bailout bill contains the following "new" pork::

  • Film and Television Productions (Sec. 502)
  • Wooden Arrows designed for use by children (Sec. 503)
  • 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504)

The bailout bill extends this existing pork:

  • Virgin Island and Puerto Rican Rum (Section 308)
  • American Samoa (Sec. 309)
  • Mine Rescue Teams (Sec. 310)
  • Mine Safety Equipment (Sec. 311)
  • Domestic Production Activities in Puerto Rico (Sec. 312)
  • Indian Tribes (Sec. 314, 315)
  • Railroads (Sec. 316)
  • Auto Racing Tracks (317)
  • District of Columbia  (Sec. 322)
  • Wool Research (Sec. 325)

As cynical as I am, I thought the e-mail going around pointing out the pork was a hoax.  I reviewed the bill.  The provisions are all there.  You can read the bill yourself.

If these are our elected officials, we deserve another Great Depression.

Pelosi Puts Partisanship Before Bailout

Let's say you, like Nanci Pelosi, supposedly think that the bailout is necessary.  Do you really make this speech before the vote?

Is Pelosi evil, or just insincere?

UPDATE: Wow, Pelosi truly is a moron.  Speaking of the Great Depression, she said: "I don't know what's so great about the depression, but that's the name that we gave it."  Umm.... "Great" doesn't mean "desirable;" it means "large."  Pelosi cannot even grasp basic English, and she is third in line for the Presidency.  These are our leaders.  Heaven help us.

Einstein's Heuristic and the Market Bailout

Albert Einstein famously said: "You do not really understand something unless you can explain it to your grandmother."  This has been a useful heuristic in my life.  How does it apply to the market bailout?

Well, first, my grandmother can understand this comic strip.  So clearly complex market transactions can be explained to an untrained audience.

Second, has Henry Paulson, in any of his interviews, explained why this market bailout will actually be a bailout?  If he can't explain, in clear and simple terms why the bailout will work, why should we believe that he understands why the bailout will work?

Market Transparency and the Emergency Economic Stabilization Act of 2008

This total scam called the Emergency Economic Stabilization Act of 2008 supposedly offers "market transparency."  How so?  Here is how:

(a) PRICING.—To facilitate market transparency, the Secretary shall make available to the public, in electronic form, a description, amounts, and pricing of assets acquired under this Act, within 2 business days of purchase, trade, or other disposition.

So he'll tells us what he bought after he buys it?  We the taxpayers get no input.  It gets better:

(b) DISCLOSURE.—For each type of financial institutions that sells troubled assets to the Secretary under this Act, the Secretary shall determine whether the public disclosure required for such financial institutions with respect to off-balance sheet transactions, derivatives instruments, contingent liabilities, and similar sources of potential exposure is adequate to provide to the public sufficient information as to the true financial position of the institutions.

In other words, it's Paulson's call what to disclose!  He could tell us nothing.  He could give us cooked books, and we'd never know. 

Someone explain to me again why we want to give $700 billion to someone who's in bed with the same Wall Street fat cats who made this mess.  That's right: No one can explain why.  We just need to.... just because really bad stuff with happen if we don't go along.  And the plan will work because.... well, if we don't go along with it, we'll all be living in Hooverville.

Emergency Economic Stabilization Act of 2008

All 106 pages of the bailout legislation are available here. (UPDATE: That site crashed.  Try this link.)

The legislation gives almost total control to Henry M. Paulson. Look, for example, at this conflicts-of-interest provision:

(a) STANDARDS REQUIRED.— The Secretary shall issue regulations or guidelines necessary to address and manage or to prohibit conflicts of interest that may arise in connection with the administration and execution of the authorities provided under this Act, including—

(1) conflicts arising in the selection or hiring of 18 contractors or advisors, including asset managers;

(2) the purchase of troubled assets;

(3) the management of the troubled assets held;

(4) post-employment restrictions on employees; and

(5) any other potential conflict of interest, as the Secretary deems necessary or appropriate in the public interest.

Talk about foxes guarding the hen house!  Paulson gets all of the money.  He also gets to decide which of his investment-banker cronies to hire. 

Shouldn't an outside agency determine what a conflict of interest is?  How is Paulson best suited to determine whether and to what extent he and his fat-cat Wall Street friends have a conflict of interest?

This bill is bad news for America.  It's crony capitalism at its worst.  Paulson's sole goal under this legislation is to make his rich friends richer.

UPDATE: More posts here.