Paulson's Bailout Plan a Bid for Control

[helwen]

The folks at The Automatic Earth blog, among others, have been reading the legalese for Secretary Henry Paulson's plan to "save" the banks with a Federal bailout, trying to get it urgently rushed through. Full post at above link, but here's an excerpt to give an idea of what they're talking about:

The plan that Paulson and Bush urge Congress to accept as fast as "legally" and practically possible, gives the Executive Branch, in the office of the Secretary of the Treasury, full, unlimited, and unchecked powers over the nation’s financial system, the entire economy, and even attempts to provide far-sweeping power over international finance. Of course the Treasury completely depends on the Federal Reserve to execute its policies, since only the Fed can "print" money.

Congress is side-tracked into a spectator role, and the courts of the country will not be allowed to judge the legality of any action the Secretary decides upon. The plan also implies that $700 billion will be provided "at any given time", which leaves open the possibilty of limitless funding, depending on how many "given times" there might be.

I am not a lawyer, and I have no doubt that even the most intelligent and experienced members of the legal corps will have trouble deciding on these issues. But I don’t see how there can be any doubt that the courts need to study a plan like this, before it can be implemented. The plan itself expressly states that after the fact, they are not allowed to.

I have read many smart people tackle the issue in the past two days, and the only one among them who hits the nail square on the head is Russ Winter. His contention: the $700 billion provision does not constitute a bail-out, it will be used to create a tar pit, in which financial institutions can be liquidated at will.

And of course where is the Fed going to come up with the money to help out the banks? From the taxpayers of course -- you know, all us folks who already don't have a lot of money? Read. Consider. Decide if maybe now is a good time to write your senators and reps.

It is for me.

Comments

[helwen.livejournal.com]

The most dangerous part of the plan is that as currently written it will permanently hand over fiscal decision-making to the Treasury Secretary, who would no longer be controlled by Congress. Even the Court will not have any say.

This is bad. This is why I posted and am encouraging people to contact their senators and representatives. We have to at least try to stop them.