Everybody lining up at the taxpayer trough!
The Treasury is given the discretion to buy “any other financial instrument” – open to acquiring “any [bum] asset, anywhere in the world.”
Nobody wants to be left out of the Treasury’s proposal to buy up bad assets of financial institutions.
“The definition of ‘financial institution’ should be as broad as possible,” urges the Financial Services Roundtable.
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.
“In short, the so-called “mother of all bailouts,” which will transfer $700 billion taxpayer dollars to purchase the distressed assets of several failed financial institutions, will be conducted in a manner unchallengeable by courts and ungovernable by Congress.
‘All decision-making power will be consolidated into Bush.’
TIME Magazine: We’re all French now!
…the America that emerges is a cartoonish version of the country most despised by red-meat red-state patriots: France. Only with worse food.
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Admit it, mes amis, the rugged individualism and cutthroat capitalism that made America the land of unlimited opportunity has been shrink-wrapped by a half dozen short sellers in Greenwich, Conn. and FedExed to Washington D.C. to be spoon-fed back to life by Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson. We’re now no different from any of those Western European semi-socialist welfare states.
Toronto Sun: America’s national motto “borrow to the hilt and bet.”
The traditional regulated banking system was pushed aside by Wall Street’s financial titans who created their own money in the form of complex securities and furiously traded these exotic instruments and borrowed recklessly against them with little government regulation or oversight.
As Kevin Phillips points out in his prophetic book, Bad Money, America’s primary business became non-productive finance. Manufacturing fell to only 12% of GDP. Wall Street titans grew obscenely rich by simply passing around paper. Inflated or semi-worthless securities increased in bogus value at each stage of the trading process.
Wall Street was allowed to virtually print money and peddle toxic securities around the globe because the big financial houses and heads of hedge funds bought the politicians of both parties.
Equally important, the mammoth financial and housing bubble thus created was hailed by the Bush administration as proof positive of Republican free market philosophy and the true road to prosperity.
More cautious European and Canadian bankers were dismissed by Republican chest thumpers as financial sissies.
This Ponzi scheme worked so long as markets kept rising.
It’s uncertain how far damage from America’s financial equivalent of Hurricane Katrina will spread. Hedge funds, money market funds and automakers could be next. Real estate losses may reach $636 billion by 2012.
All stock market gains of the past 10 years have been wiped out in the most dangerous crash since the 1930s.
The “free market” Republican administration has ended up nationalizing nearly $1 trillion worth of businesses, including the federal mortgage agencies Fannie Mae and Freddie Mac, Bear Stearns, and global insurer AIG. Welcome to Wall Street socialism.
One thing is now clear. When great empires run onto the financial rocks, their power quickly ebbs. France’s Sun King, Louis XIV, ended his once glorious rein in near bankruptcy caused by his long, ruinous wars with the British and Dutch. Louis XVI’s runaway borrowing to finance the American Revolution helped ignite the French Revolution. The Soviet Union’s collapse was caused by spending half its national income on arms, and failure to modernize industry.
Over the past decade, the U.S. foreign debt doubled. Japan and China now hold 47% of the U.S. foreign debt and finance Washington’s wars. The addition in recent days of at least $1 trillion in new debt will cause interest rates to rise and the dollar to weaken. Even the U.S. government’s AAA credit rating now is in question.
Washington may no longer be able to spend half the globe’s defense budgets.
The $12-13 billion a month wars in Iraq and Afghanistan will end up costing $750 billion by December 2008. There will be less cash in Washington’s kitty to buy foreign dictators and prop up their regimes, as in the Mideast and Central Asia. Less cash to pay for little wars in Africa.
Less for exotic anti-missile systems and death rays.
America’s enormous global power is based as much on its financial might as military muscle. Wall Street has been the vehicle and policeman of America’s hegemony. It shaped the destiny of the globe and made many nations subservient to the demands of New York’s titan bankers. Wall Street is essential to raising capital for business expansion, but often it resembled New York’s ruthless loan sharks: Once you borrowed from them, you never got off the hook.
Americans will have to relearn the hard truth that you can’t borrow your way to prosperity.