More on the bailout, and it ain’t pretty

Any of you catch this? WKW at William K. Wolfrum Chronicles:

From Section 8 of the Treasury’s Financial-Bailout Proposal to Congress:

“Decisions by the Secretary [Henry Paulson] 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.”

If this bail out passes, everything U.S. Treasury Secretary Henry “We need this to be clean and to be quick” Paulson says and does goes, without question or review.

Anglachel quotes Krugman and riffs on Mother of All No-Docs

So, Hank Paulson wants the US taxpayers to make a loan to Wall Street. It seems that the big financial firms are underwater on the investments they made.

They don’t want to provide actual balance sheets, just self-reported assets which may or may not exist. They want borrow the full value with no collateral down. Oh, and none of that pesky insurance against their defaults. They don’t have any proof of income, and their employers can’t really be reached. In fact, it’s not clear they have any employment at the moment.
We’re talking major league NINJA loans here. Oh, and it appears to be a 0% interest loan, too.

In short, the Wall Street banks are asking to be excused from the kind of underwriting of their credit-worthiness and ability to repay that typifies the toxic loans (subprime, ALt-A, prime, whatever) that got us into this mess in the first place. And Paulson wants to give them exactly that.

For a “real life” perspective on this, go read The Red Queen’s letter to her congress critters and the presidential candidates.

The government’s first and most important job is to provide security for the people. For the Republicans, this has always been interpreted to mean strictly military security. But the current economy is inflicting a kind of violence on the populace that only strong governmental measures can stop. It is your job to protect us. The current plan from the treasury department will only strengthen the case for continued economic violence against the American people. It might be a better idea to just take the 700 billion and directly pay off as many sub-prime mortgages as possible. At least then we’d know the money was going to the people who need it. What difference does it make that they are paying income taxes instead of mortgages? Households first, then banks and brokers and insurance companies. This country is made up of households and the people that create them. And we are suffering. Please do you job and stop this continued assault on the American people. Don’t pass the bailout bill without remembering who is paying for it, and how little we will benefit from it.

Anglachel again:

As bad as the publically stated objectives for Paulson’s plan may be, they are a misrepresentation to cover up the even more egregious truth of what Paulson actually intends. And the Democratic leadership is 100% in the know about what Paulson intends. Read this excerpt from naked capitalism’s post Why You Should Hate the Treasury Bailout Proposal

Go read her whole post and click over to naked capitalism while you’re at it.

While reading it dawned on me. Damn! They couldn’t get our SS money, so they are doing it this way. The numbers are about the same!

Anglachel concludes:

This really is little more than a scam to make the taxpayers provide the money to cover the losses for all the bad debt issued by the financial industry. What the Democrats have to do is refuse to get on board and put forward their own legislation that actually addresses the problem, send that to Bush and dare the bastard to veto it. Hang this around Bush’s neck and stop letting the High Broderists shame the Dems into backing down. Barney Frank and Hillary are showing them how it’s done.

Yes, Harry & Nancy, it IS class warfare, there is no “bipartisan” option, and you have a world historic moment in which to redefine both your party and your nation for the better.