Monday, September 22, 2008

A Trillion Here, A Trillion There

“This is no time for partisanship, we must join to move urgently needed legislation as quickly as possible without adding controversial provisions that could delay action,” said President George W. Bush in a recent White House statement flanked by the Fed Chairman, Treasury Secretary, and SEC Chairman.

There he goes again.

This is the modus operandi of the Bush administration. Wait until things are so bad that action must be swift,,, and then force legislation down the Congress and the people’s throats.

There is nothing that the Bushie’s enjoy more than using the fears of the American people to drive a wedge between Democrats in Congress and the American people.

We’ve seen this tactic before.

Whether it was with the Patriot Act, the Department of Homeland Security, or the resolution to authorize the use of force in Iraq, President Bush executing the Karl Rove playbook has used the bully pulpit to force his will without time for thought, strategy, or real debate.

These were all critical and serious decisions that were used as political weapons and rushed to turn into law.

Rational thought, logical planning, and long term strategy were all removed from the process in order to pass legislation or create departments to try and achieve a short term political victory.

What have been the results of this strategy?

- The Patriot Act gutted the civil liberties our country was founded.
- The Department of Homeland Security became a bureaucratic nightmare that helped lead to the mess of Hurricane Katrina
- Don’t get me started on Iraq.

So how does this apply to the current situation?

In addition to the statement that I started this article with,,, the President also said…

“There will be ample opportunity to debate the origins of this problem, now is the time to solve it.”

Now is the time to solve it?

Wouldn’t a pro-active approach, say a year or so ago, have prevented us from having to ask Congress to approve spending $700billion or more in a week’s time?

This $700billion that the President says we have to ‘quickly approve’, does not include the roughly $800billion that have already been guaranteed to Fannie Mae, Freddie Mac, Bear Stearns, AIG.

So that means that because the banks, creditors, and investment houses were all consumed with Gordon Gecko like greed and corruption,,, we the taxpayers have to pump $1.5-$2.0trillion to bail these bastards out.

This $700billion plus dollars they are asking for now, also does not include the money that other failing industries are going to ask for in upcoming months.

That’s right people, the companies that have failed already, like the Banks and Investment Houses, are just the 1st in line for Government bailouts. The airline industry and automakers are next, and who knows who will follow after that.

So here’s my beef with the President and the Treasury Secretary’s latest plan.

Why should we accept the plan from the administration on face value?

This is an administration that has missed the mark on most everything it has decided to get involved in, yet now we should just ask no questions and be happy to spend close to a trillion dollars of taxpayer money to bail out institutions that’s own greed and malfeasance have put their futures at risk.

This isn’t $50 or $100 a taxpayer we are talking about. Say there are 200million taxpayers in the US, and the final tally for this part of bailout is around $1trillion. That would balance out to around $5,000/taxpayer. Ask the ‘middle class’ if they could spend 'their $5,000' on something more important than corporate welfare.

Honestly if you include all the bailouts and loans, and government taken over operations, the bill is going to be closer to $2trillion. That means $10,000/taxpayer!!!!!!

People all across this country have seen their retirement accounts go down, their mortgage rates and transportation costs go up and are now being told that it is their responsibility to bail out corrupt billion dollar companies from their own mistakes to the tune of thousands of dollars per taxpayer.

Not just their tax responsibility, but that their money should be spent ‘quickly’ and without ‘Controversial provisions that could delay action,’ as the President said.

What are these controversial provisions?

1. Limiting CEO and Executive Pay: The thought here is that if a company has been mismanaged and applies to have the government buy their assets that the boards and executives of those companies will not be able to get multimillion dollar bonuses because of the bailout.
2. Providing Relief to the mortgage holders and homeowners of America: The thinking that it’s unfair to bail just the lenders and the banks and not the people that were victims of predatory lending or irresponsibility of the lenders and credit agencies.
3. Appointing a panel of experts or a ‘Czar’ to manage the holdings: The current plan gives almost soul power to the Treasury Secretary to the $700billion and what to buy and sell of the assets they are buying. Some smart people like Warren Buffet are proposing a team of experts or an independent ‘Czar’ of this program. Michael Bloomberg’s name has been floated for this post. Especially considering the Treasury Secretary will not have this job in just about 4 months.

Now I have never claimed to be a financial expert, but these provisions seem to be reasonable to consider and at least we should discuss these provisions.

Deep down I wish all the executives of these institutions, whom make Enron look semi-responsible, were allowed to go under and that we taxpayers didn’t have to give them one dime.

Yet the potential catastrophic effects on the markets, both here and abroad, has made me come to grips with the fact that we indeed have to act soon.

But what exactly is ‘quickly’ as the President said?

We may not have another chance to really turn things around in both the short and more importantly, long term. We need to do so with a way that looks past the just the anxiety of today and attempt to think logically for the long term prosperity of our country.

I may be wrong, but we may only have one shot at doing this right.

I for one want to be sure that our government gives some strategic long term thought, and takes a certain level of care to make sure companies don’t abuse this system. You know the way they abused the system to get us into this mess.

So back to how long a time ‘quickly’ is.

If Congress takes an extra couple days or even a week before spending a trillion taxpayer dollars, then so be it.

If the world markets suffer an extra day or week in the short term, that may be the price we all pay to ensure long term success.

This is our money and our economic future, the Congress and administration better make sure that they do it right and not blow this opportunity to set us on a new course.

That new course, by the way, a much more socialized government.

The President is right we need to act soon.

Yet, if anyone should know the effects of faulty planning one would think it would think it would be the man whose piss poor planning led to the debacle in Iraq.

I plead with the President, Treasury Secretary, and Congress...

Don't rush too fast, please do it right.


Patrick said...

Usually when someone says, "This is no time to point fingers" it means that they are responsible for whatever mess you are in.

Anonymous said...

Some experts believe there is not enough money to compensate the key buyers (China, Japan, and other countries) who bought "AAA" rated US financial products and now know they are "BBB-" rated.

Some experts believe there is no obligation imposed on banks to lend to US businesses and consumers after receiving up to $700 billion.

Banks are now even more undercapitalized thanks to their losses. A portion of the regulation allows banks' capital requirements to be reduced to zero if necessary. Isn't this how the banks got into trouble in the first place, investing in $30 worth of risky products with only $1 of capital?

If truth be told, we have already spent about $2 trillion over the last year on this matter and we have not calmed the credit market.

The US citizen deserves to have a detailed, understandable explanation of the current problem, why our financial institutions cannot solve the problem themselves, and a comparison of several alternatives.