It had been a dark and stormy month of financialcollapse, culminating in an attempted power grab. Pushed by his fellow WallStreet Ponzi schemers, Treasury Secretary Henry Paulsona former Goldman SachsCEOwas threatening Armageddon unless Congress ratified his pamphlet-sizeddecree for a no-strings-attached bank bailout. The straightforward proposal,backed by President George W. Bush and President-to-be Barack Obama, would haveturned Paulson into King Henrya despot allowed to autonomously dole out $700billion to any of his business cronies.
This was too outrageous even for a rubber-stampCongress that had long been ceding power to both the executive branch and thecorporate boardroom. And so rank-and-file House Democrats and Republicans,backed by an angry public, overrode their leaders and voted down the measure.
Admittedly, the conflagration was brief. After a fewdays of industry lobbying, the House ultimately passed the Troubled AssetsRelief Program (TARP) bailoutbut one with at least some mild restrictions. Fora time, 9/29’s fleeting blast of defiance appeared to establish a maximum limitto robbery and presidential authoritarianism.
For a time.
Today, the episodeif considered at all in Washingtonseems merelyto have set minimum standards for chicanery. As evidenced by two little-noticedsections of the Obama administration's Wall Street "reform" bill,presidents and their bank benefactors are back to thinking they can pilferwhatever they wantonly now they have learned to camouflage their demands byburying them in the esoterica of lengthier bills.
Finding this latest giveaway means digging all theway down to sections 1109 and 1604 of the White House's mammoth proposal. Thesepassages look like typical legislative asterisksperfunctory "oh, by theways" inserted by some overeager law school intern in the TreasuryDepartment's basement as a matter of meaningless parliamentary etiquette.
They are anything but.
At a recent hearing, Rep. Brad Sherman, D-Calif.,called the language "TARP on steroids," noting the provisions woulddeliberately let the executive branch enact even bigger, more unregulatedbailouts than everand by unilateral fiat.
Whereas the original TARP included some oversightlanguage and power to limit Wall Street bonuses, TARP on Steroids includes nospecific oversight or executive pay constraints. Whereas TARP permitted thegovernment to underwrite both small and large banks, TARP on Steroids allowstaxpayer cash to go only to the behemoths (which, not coincidentally, tend tomake the biggest campaign contributions). And whereas TARP limited the TreasurySecretary's check-writing authority to two years and $700 billion, TARP onSteroids would let him spend as much as he wants for as long as he wants.
This last point is what poker players call "thetell"the inadvertent tip exposing a scam. Treasury Secretary TimGeithner's tell came when he publicly said the Obama administration wouldoppose amendments limiting the new bailout powereven if the limit was a $1trillion cap.
The former financial executives inside the Obamaadministration have labeled their bill the "Financial StabilityImprovement Act," and some might say that's like Bush officialsoxymoronically calling their own anti-environment initiatives a "ClearSkies" agenda. But that's not a totally fair comparison because there’s anunderlying consistency here: While these new “financial stability” powers maydestabilize the nation's finances, they would more than stabilize Wall Street’slarcenous profits.
That thievery, of course, has been the big problemall alongand now, only another 9/29 can prevent it from getting worse.
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