Yet another Bush power grab

The text of the bailout plan (known as the "Legislative Proposal for Treasury Authority to purchase Mortgage-related Assets") contains three disturbing but not unexpected provisions:

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase. — The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions. — The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation….

Sec. 8. Review.

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.

It is worth noting that the Act, if passed by Congress without modification, would not only authorize the Secretary of the Treasury to purchase American "mortgage related assets," it also authorizes the Secretary to make these purchases "without limitation" or effective oversight. Briefly put, the Plan will give the Secretary a blank check. This check would enable the Secretary to become a finance dictator working unconstrained by the rule of law. The proposal does include a sunset clause (two years, Section 9), a spending limit ($700B, Section 6) and requires the Secretary to report to Congress (Section 4). But these limits are weak and the only ones contained in the text.

So, the Plan intends for American citizens to become debt slaves in perpetuity. What is more, the Bush administration wants American citizens to forfeit some of their remaining political powers, meager as they are, to the Executive branch. Just as it did during 9.11's aftermath, the administration wishes to use a national catastrophe and the sensible fears it promotes to usurp political power. In return for enduring these thefts, the Act only requires the government to protect American citizens by saving Wall Street from the worst consequences produced by its own past actions! Virtue is its own reward for the common folk, it would seem, whereas the coldest rapacity earns gold and much else besides for the greedy and reckless few.

I cannot say that I was surprised by this outrageous gambit. It is dishonest and vicious, and so it precisely reflects the Bush culture the world has come to know since 9.11. But it is disappointing nonetheless since the Plan is likely to set limits to the debate over what the country must do to overcome the crisis.


Mike Whitney makes an important point when he states: "The banksters own this country, always have; only now they've decided to strip away the curtain and reveal the ghoulish visage of the puppet-master. It ain't pretty." No, it is quite ugly. Yet the real insight contained in this passage can be found in the second clause of the first sentence, which rightly points to the contempt Wall Street feels for Main Street. What is good for American finance capital is good for the country, so far as the Street is concerned. Naturally it is impolitic to actually say this. Thus America's democratic institutions and the rule of law limited and masked Wall Street's domination of Main Street. But the financial crisis has given an opportunity to this unprincipled scoundrel, and Moneybags excels when it is a matter of exploiting an opportunity. Apart from the opportunity the crisis has created, democratic governance and the rule of law are inefficient when considered from the vantage point provided by Lower Manhattan. They can be radically altered or eliminated according to what finance capital needs, wants and can achieve. If enacted as written, the Plan would produce a double effect: 1) It will promote another massive transfer of wealth to finance capital; 2) it will complete another stage on America's road to dictatorship. The Plan ought to never make it out of Congress.

Update II:

Adam Ross Sorokin of the New York Times rightly equates the Plan, especially Section 8, with the Patriot Act.

David Hilzenrath of the Washington Post suggests that Washington's recent bailout work will promote the growth of larger financial firms (the too-big-to-fail survivors of the crisis) while also decreasing the competition within the industry (through the destruction of the smaller players). This outcome would be neither fair nor sensible, the article suggests.

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