The administration via Treasury Secretary Henry Paulson and Fed Chairman Ben Barnake gave Congress a three-page ultimatum to pass this bill or the financial markets wouldl die. For extra pressure the administration sent Dick (Darth Vader) Cheney to twist some Republican arms. The Republicans basically said “thanks, but no thanks.”
Senate Banking Chairman Christopher Dodd, now vows that the administration will not get the clean bill ,it desires. Whats is a clean bill? Basically it is one without amendments attached,like a garage sale sticker “as is.”Section 8 of this three-page ultimatum stated:
1) The Secretary had sole authority to purchase.
2) The Secretary could purchase as he deemed fit.
3) The Secretary could appoint the employees.
4) The Secretary had the authority to enter into contracts.
5) The secretary could designate financial institutions (such as Goldman Sachs) to act as agents of the government.
This disclaimer caught my eye.
Decisions by the Secretary pursuant to authority of this act are nonrenewable and committed to any agency decision and may not be reviewed by any court of law or any administration agency…. Where do I sign?
After hours of watching our nation’s financial gurus I’ve come to the conclusion that the bailout is not such a bad deal because the secretary will not get retroactive immunity, and the paper the government will buy is not all that bad.
Let me explain. 80%t of the mortgages are good, 10% workable, and 10% are just junk. The 2005 California mortgages are probably worth $.30 on the dollar and the Florida mortgages, about $.50 on the dollar. Right now the free market cannot afford at risk it’s like catching a falling knife blade. Uncle Sam is the only option.
I read Ron Paul’s no-bailout proposal of just cutting taxes and spending. No one is buying that anymore, this does not solve the problem of several banks failing,the falling stock market, or unemployment. We’re not going back on the gold standard; get over it.
This problem is not the fault of the 10% who will default on their mortgages or else the FBI would not be investigating 26 Wall Street firms. Loan Sharks manage to stay in business by imposing high interest rates. They use the reserve for the defaults.AIG only had three or four cents in reserve for every potential default.
I hope Wall Street, Washington, and Main Street learns that old adage “No such thing as a free lunch.”
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