BENEATH THE SPIN • ERIC L. WATTREE
A Red Flag Flies High Over Financial Bailout
I've spent a lot of time trying to figure out this financial bailout, but the banking community's schemes to rid us of our money have been so convoluted that it's hard to get a handle on whether or not they're telling us the truth about the immediate severity of the problem. But there's one thing that I do have a handle on, the fact that the administration wants to have sole control over the bailout, and that sends a flaming red quilt all the way up my flagpole.
The Bush administration–the very same people who have mismanaged everything they've touch for the past seven and a half years, and who have gouged, corrupted, and claimed to have literally "lost" billions of dollars of taxpayer funds in Iraq–is now asking that we give them full control over the way they spend 700 billion dollars to resolve this financial crisis–and with the warning that even taking the time to think about it is dangerously imprudent.
Section Eight of the Bush bailout plan reads as follows:
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.
The arrogance of the Bush administration is so absolutely astounding that the only thing that could possibly explain it is if they think the American people are completely stupid–which is quite possible, considering what we've allowed them to get away with in the past–or the administration itself is completely out of touch with reality. Do they really expect us to give a lame-duck president with an approval rating of 19, with three months left in office, a record of never seeing a crony he didn't want to enrich, and only stumbling inadvertently over the truth in the past two terms, 700 billions dollars–and with the stipulation that his discretion is non-reviewable by any agency or court of law? Could they possibly be serious?
Could this be the October surprise? Could it be that the Bush administration sees the writing on the wall, and recognize that their time at the troff is over, so they want to make one last super big score before leaving office?
Consider the fact that with the stipulation that the secretary's authority is "non-reviewable", Paulson has the right to hire and fire. That would allow Bush to put his cronies in place throughout the banking community, and thereby, effectively control our entire financial system. In fact, they might have already started playing politics with the system. If they knew that a possible bailout was in the works, why did they allow Lehman Brothers to go under? Could that have been political? That needs to be investigated.
And while I'm not an attorney, I would also be concerned that Bush could establish an independent agency, and fill it with his cronies, that would be beyond the reach of the next administration–and with the current Supreme Court, he just might prevail with such an arrangement.
So needless to say, section eight of the bailout proposal should be dismissed out of hand. And congress should insist on the American people owning equity, and receiving annual dividends from the gross profits of any structured group that participates in whatever bailout plan that is agreed upon. If the situation is as dire as they say, the banks should be eager to except such an agreement. If they're not, we'll then know that they're crying wolf.
The only way the American people can be sure that we're not being manipulated, and won't be manipulated in the future, is to set a precedent assuring that the financial community pays a stiff price for the assistance that they're requesting.
Therefore, I suggest that the various corporations participating in the bailout should be consolidated into one group. The corporations within the group itself would be responsible for determining, and substantiating, the amount of bailout money the group would require to remain viable. The government will then gain a 50% inactive share of each company participating in the bailout as collateral, to be returned to the company once the public debt has been paid, and every company participating in the bailout will be held individually responsible for the group debt as a whole.
The government would then negotiate an open-ended loan at the prevailing rate, but a rate that would escalate at assigned periods, based on the percentage of the debt remaining at that point. The group would then pay off the debt by setting up a trust fund in which the group must contribute a percentage of their annual gross profits, with the group itself determining a formula for which the various companies would contribute to the fund, based on what percentage of the bailout fund they required to remain solvent.
The government would then establish a formula to determine what percentage of the groups annual gross profits would go into this trust fund. The formula would take the following indices into account in the taxpayer's favor: The prevailing minimum wage, the cost of living, and the level of disparity between the average salary of a middle class worker and the compensation of top tier corporate executives.
This is no time to negotiate. The conservatives have shoved their fiscal philosophy down our throats for years, so now the Democrats should simply say, "Here's what we can do for you–take it or leave it. And beyond that, we're tacking on to any bill we sign, a 20 year mandatory prison sentence for anyone convicted of profiteering from the bailout agreement."
Any bailout plan less than the one above would be socialist in nature, and we can't have that–can we?
Eric L. Wattree
I take great pride in being the product of adversity, because having simply survived provides me with unassailable credentials.
Thursday, September 25, 2008
Posted by Eric Wattree at 1:19 PM