DUSTY RHOADES: Can We Trust Bush's Boys To Handle the Big Bailout?
When George W. Bush was first running for office, he said -- with a straight face, mind you -- that he intended to be a "uniter, not a divider."
Well, it seems that, at long last, he's managed to make that promise come true. Because other than investment bankers or CEOs of mega-insurance corporations, absolutely no one likes the $700-billion-plus bailout of the financial services industry, at least the one originally proposed by Treasury Secretary Henry Paulson.
Free market conservatives don't like it. Liberals don't like it. Economists don't like it. Bill O'Reilly doesn't like it, and neither does Newt Gingrich. Barack Obama doesn't like it. John McCain says it makes him "deeply uncomfortable," at least today. Who knows what he'll say tomorrow?
To hear Paulson tell it, though, if we don't pass his three-page plan right freakin' now, the entire U.S. economy will collapse. If it hadn't passed by today, Paulson implied, Donald Trump will be selling apples on street corners on Monday, we'll be standing in line at soup kitchens with our tattered ragamuffin children by Wednesday, and by Hallowe'en we'll all be putting on our leather jackets and hockey masks and heading off into the desert to fight for survival a la "The Road Warrior."
Whoa, said congressmen on both sides of the aisle. This plan hands the treasury secretary an enormous check with which to buy up "mortgage-related assets" and to do so "without limitation." We need to put in some kind of oversight, said lawmakers, and to place some conditions on this much money. Like, for instance, making sure none of it goes to pay big severance package payouts to the CEOs who led the companies to ruin in the first place. Or perhaps a provision to let bankruptcy judges reform mortgages so the bank gets paid something and people get to stay in their homes.
Oh, no, the Bushistas said in horror. If you put conditions that tell banks and investment firms what they have to do to get their mitts on billions of dollars of our money, it might, and I quote, "reduce participation" in the plan.
White House spokesman Tony Fratto told reporters: "You have to remember, these are not all weak or troubled firms a lot of them are very successful banks and investment houses that have done very well, have been responsible, are holding performing assets that have value. They were not necessarily irresponsible players, and so you have to be careful about how you deal with them."
Now wait just a doggone minute here. This is supposed to be an emergency measure, right? A vitally needed lifeline? Now, I'm no fancy financial genius, but it seems to me that a financial institution that can look at the lifeline and go, "Eh, no thanks, too many strings attached" is perhaps not bad off enough for our tax dollars to be used for life support.
Then there's the matter of Secretary Paulson's credibility.
At some point during his opening statement to the Senate, he veered from the text of his carefully prepared remarks and asserted that there was nothing about oversight in the original draft of the bailout plan because he knew that was a detail he would need to work out with Congress.
"I want it, we all want it," he said about oversight.
As the kids on the Internet say, O RLY? Paulson's defense sounds plausible until you actually, you know, read the plan. It doesn't just "not mention" oversight. It states in plain English that there is to be none: "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."
Then of course there's Paulson's own whopping conflict-of-interest problem. Paulson is former CEO of Goldman Sachs, a company that stands to benefit in a big way from the bailout. And, one way or another, he's going to be looking for a job come January. Where exactly do you think he is going to go looking, other than the very companies he's going to be throwing a trillion or so dollars of your money at? Hint: It ain't gonna be bagging groceries at Food Lion.
Let's see: using dire predictions of imminent disaster and lies to frighten and bully people into handing the executive branch a blank check and unfettered powers, all for a horrendously expensive half-baked plan which provides enormous, unchecked benefits to the former employer of one of the people pushing it. Sound familiar?
But hey, why shouldn't the Bushistas run that playbook? It's worked so well for them in the past.
Hasn't worked so well for us, though.
As of this writing, we don't know what form, if any, the bailout will take. But I do know one thing: I don't trust this administration to handle it without being kept on a very short leash.
Dusty Rhoades lives, writes, and practices law in Carthage.
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