From a left leaning blog. Yet fiscal conservatives agree!
Steve
http://www.truthdig.com/report/item/20091029_tarp_on_steroids/
TARP on Steroids
Posted on Oct 29, 2009
By David Sirota
I recall that September day like it was yesterday—the explosion so
stunning, so memorable. It wasn’t 9/11/01, it was 9/29/08—a moment when
a rare blast of populist democracy briefly singed the economic
terrorists who hold the Capitol hostage.
It had been a dark and stormy month of financial collapse, culminating
in an attempted power grab. Pushed by his fellow Wall Street Ponzi
schemers, Treasury Secretary Henry Paulson—a former Goldman Sachs
CEO—was threatening Armageddon unless Congress ratified his
pamphlet-sized decree for a no-strings-attached bank bailout. The
straightforward proposal, backed by President George W. Bush and
President-to-be Barack Obama, would have turned Paulson into King
Henry—a despot allowed to autonomously dole out $700 billion to any of
his business cronies.
This was too outrageous even for a rubber-stamp Congress that had long
been ceding power to both the executive branch and the corporate
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 few days of industry
lobbying, the House ultimately passed the Troubled Assets Relief Program
(TARP) bailout—but one with at least some mild restrictions. For a time,
9/29’s fleeting blast of defiance appeared to establish a maximum limit
to robbery and presidential authoritarianism.
For a time.
Today, the episode—if considered at all in Washington—seems merely to
have set minimum standards for chicanery. As evidenced by two
little-noticed sections of the Obama administration’s Wall Street
“reform” bill, presidents and their bank benefactors are back to
thinking they can pilfer whatever they want—only now they have learned
to camouflage their demands by burying them in the esoterica of
lengthier bills.
Finding this latest giveaway means digging all the way down to sections
1109 and 1604 of the White House’s mammoth proposal. These passages look
like typical legislative asterisks—perfunctory “oh, by the ways”
inserted by some overeager law school intern in the Treasury
Department’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 would deliberately let the
executive branch enact even bigger, more unregulated bailouts than
ever—and by unilateral fiat.
Whereas the original TARP included some oversight language and power to
limit Wall Street bonuses, TARP on Steroids includes no specific
oversight or executive pay constraints. Whereas TARP permitted the
government to underwrite both small and large banks, TARP on Steroids
allows taxpayer cash to go only to the behemoths (which, not
coincidentally, tend to make the biggest campaign contributions). And
whereas TARP limited the Treasury secretary’s check-writing authority to
two years and $700 billion, TARP on Steroids would let him spend as much
as he wants for as long as he wants.
This last point is what poker players call “the tell”—the inadvertent
tip exposing a scam. Treasury Secretary Tim Geithner’s tell came when he
publicly said the Obama administration would oppose amendments limiting
the new bailout power—even if the limit was a $1 trillion cap.
The former financial executives inside the Obama administration have
labeled their bill the “Financial Stability Improvement Act,” and some
might say that’s like Bush officials oxymoronically calling their own
anti-environment initiatives a “Clear Skies” agenda. But that’s not a
totally fair comparison because there’s an underlying consistency here:
While these new “financial stability” powers may destabilize the
nation’s finances, they would more than stabilize Wall Street’s
larcenous profits.
That thievery, of course, has been the big problem all along—and now,
only another 9/29 can prevent it from getting worse.
/David Sirota is the author of the best-selling books “Hostile Takeover”
and “The Uprising.” He hosts the morning show on AM 760 in Colorado and
blogs at OpenLeft.com. E-mail him at [email protected]./
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