Deal: raw

Blech. I'm not loving it. But along with the pols, I failed to do enough to take on the premises of the bailout. Even within the limits of what can be done around the edges, though, the deal appears to be disappointing.

I'm seriously unhappy that Henry Paulson, who's already handed over billions of our money in broad daylight to help his old firm, appears still to be the decision-maker in this giveaway. [Update: 5:45 pm, 28 Sept - Yep; it's actually worse than I thought: "So it's all up to the Secretary to establish the rules. Same with [equity] Warrants - it's up to the Secretary to negotiate." The form and amount of disclosure of purchases is also up to Paulson. End update.] $350 billion is way too much to commit before any Congressional brakes can be put on. There's almost no punitive aspect, and no re-regulation. There's nothing of the needed bankruptcy changes Dick Durbin tried to insert.

Update 2: 3:00 am, 29 Sept - Reports from the conference call Treasury held Sunday night with the industry (no media, no public; would have gone unreported except for industry-observing bloggers) confirm my worst suspicions. This is not good enough to vote for; it's the original Paulson naked class war with Democratic fig leaves. In particular, the whole $700b can be committed before the clique of looters leaves office. Which was the point. I'm just numb with despair. End update 2.

Bernie Sanders' proposal needs to be a bill come February 2009. As does Durbin's bankruptcy re-reform and Sen. Clinton's recreation of the depression-era Home Owner Loan Corporation. A serious tax is the first priority; the only way to fund health care is to claw back some of the outrageous share of national income from them what took it:

... the total share of national income going to the super-rich has more than doubled [since 1979]. The merely well off have also gotten a slightly bigger piece of the pie, while everyone else has funded this free-for-all. "Everyone else," in this case, means 90% of the country. Our share of national income has gone down in order to make sure that virtually all the fruits of economic growth over the past four decades could go to the well-off, the rich, and the super-duper-rich.

Image: Afferent Input

Letter to the editor - bailout

Sent to the Roanoke Times, just at their word limit of 200; I hope it's one of many.

Six years ago Bush and Cheney used scare stories to stampede Congress into authorizing a ruinous war. Now they're using the same tactics to make a huge grab for the bank on the way out the door.

After two years of saying things were under control, while ignoring the pain of homeowners struggling with unaffordable mortgages, suddenly they’re painting the picture of a financial "mushroom cloud" unless we fork over $700 billion right now, to be handed out to their Wall Street friends with no questions asked.

For Congress to agree would be an unconstitutional abdication of its power of the purse -- even if this administration had proved trustworthy in dispensing vast sums of money. Given the actual Bush-Cheney record of corruption, incompetence, and cover-ups, it would be insanely irresponsible.

The timing also guarantees conflict of interest. In January Secretary Paulson is likely to be looking for work among the very businesses to whom he's proposing to hand out billions.

Congress should pass no proposal that doesn't

restructure mortgages to keep people in their homes,

protect taxpayers' interests with oversight and accountability, and

lay the groundwork for re-regulation to solve the problem.

Now reworking for Rep. Goodlatte and Sens. Warner and Webb.
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Groundhog day

Through their tears, they see opportunity.

In this case, the opportunity is a $700-billion grab, with unfettered authority, from the taxpayers to the administration's best friends on Wall Street.

Six years ago to the day, the regime was demanding unfettered authority for another such project from Congress. Common sense warned that the tidy, antiseptic slogan of "regime change" was a facade for vast devastation and killing, and a long, open-ended commitment of resources for unstated goals. But complicit, ambitious, and fearful Democrats were only willing to tinker with the language, not confront the basic policy, and agreed to a vote before the election. So here we are, a trillion dollars and hundreds of thousands of lives later.

The clique of lawless plunderers in the executive (and fourth) branches has used the technique again and again, and it always works: They back Congress up against a deadline and "brief" them with visions of the catastrophic consequences of not granting yet more unchecked power and retroactive absolution for crimes already committed.

The Military Commissions Act was introduced at this time two years ago as an electoral club: fearful of "soft on terrorism" smears, the Democrats acceded to authorizing show trials, legalizing torture, and actively cooperated in stripping habeas protections from prisoners. The Protect America Act, to authorize previously illegal massive domestic spying, was pushed through with tales of terrorist threats against Congress itself and with an August recess looming.

In this latest crisis, the Democrats are as complicit as they are fearful; Wall Street runs both parties. I look for nothing but the tiniest concessions, nibbling around the edges rather than addressing the causes, much less sticking the people who caused the problem with the tab or holding them accountable in any way.

And the timing, when so many activists are in full-out election mode, means that it's unlikely that a cohesive alternative can be put together in time to provide even a missed opportunity for the craven congressional Dems. Still, I'll keep alert to signs of organized resistance.

Update: 2:30 pm, Sept 21 - This, purportedly from a member of Congress (vouched for and via Matt Stoller) is a spirits-lifter, but I'd be more encouraged if s/he'd go on the record:

Nancy [Pelosi] said she wanted to include the second "stimulus" package that the Bush Administration and congressional Republicans have blocked. I don't want to trade a $700 billion dollar giveaway to the most unsympathetic human beings on the planet for a few fucking bridges. I want reforms of the industry, and I want it to be as punitive as possible.
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I also find myself drawn to provisions that would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling. That is now required of consumers filing bankruptcy to make sure they feel properly humiliated for being head over heels in debt, although most lost control of their finances because of a serious illness in the family. That would just be petty and childish, and completely in character for me.

David Obey? Barney Frank?

Update 2: 4:00 pm, Sept. 21 - By far the best summary of how Congress should respond to this outrageous ploy by the regime is a guest post by Rebecca Gordon at Happening Here? Her most important point, one which the Democrats fail to grasp again and again, is that there is no reason to grant the regime's terms of debate, that unlimited authority must be ceded right this minute or the sky will fall.

The Great Swindle

The shock is beginning to wear off, which is bad news for the Shock Doctrine practitioners. These guys put it well:

Any member of Congress who looks at the plan to give [Treasury Secretary]Hank [Paulson] unchecked power to transfer $700 billion from the Treasury to his friends' companies and has any reaction other than "You've got to be fucking kidding me" does not deserve to hold office.

Atrios.

This loathsome bailout plan is a slap in the face to anyone who believes in either free-market principles or social justice.
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Right now a corrupt and spent corporate class is on the brink of getting a corrupt and spent governing class to perpetuate its privilege by almost dumbfoundingly transparent means. Anyone with a soul needs to oppose them.

Jim Henley.

Update: 3:55 pm, Sept 21 -

There’s no institutional mechanism; there’s no logic to this bailout that could not apply to a future one. It not only culminates the previous era of Moral Hazard, it inaugurates the next one. It guarantees more of the same behavior that led to the current crisis.

More Jim Henley.

If millions of people take mortgages that they can't afford, and the ensuing mess threatens the stability of the financial system, the government can't bail them out --- some of them may have been ill-advised or rushed into bad deals by shady financiers, but it would destroy market incentives, and they just have to suffer.

If major financial institutions buy those mortgages, and the ensuing mess threatens the stability of the financial system, the government must bail them out --- they're getting off easier than they deserve, but the alternative is too horrible to contemplate.

Charles Dodgson.

[I]f this really happens, forget universal health insurance, aid to education, and middle class tax cuts as promised by Obama. The Republicans will have stolen the bank on the way out the door.

Jan in San Fran.
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But it wasn't about the oil. Not at all.

On blogs where the Bush administration's proposed "security framework agreement" with Iraq has been discussed, the question has come up of why the July 31st deadline. My answer has been electoral politics: An agreement that extends the U.S. military presence indefinitely is the "victory" and "success" that the regime would like to show for its policy, and that McCain can run on.

But if it's not politics, it's business, Bush's base. Today's New York Times business section brings the news that four oil majors are close to returning to Iraq, having almost wrapped up negotiations on no-bid foothold contracts:

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.

The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations. [emphasis added]

So there'll be plenty for President Obama's residual force to do:

Any Western oil official who comes to Iraq would require heavy security, exposing the companies to all the same logistical nightmares that have hampered previous attempts, often undertaken at huge cost, to rebuild Iraq’s oil infrastructure.

And work in the deserts and swamps that contain much of Iraq’s oil reserves would be virtually impossible unless carried out solely by Iraqi subcontractors, who would likely be threatened by insurgents for cooperating with Western companies.

Priorities

There's much of interest for the clear-eyed in this Washington Post front-page story on Obama's big-dollar fundraising. But this bit was grimly amusing:

The Chicago contingent also includes James Crown, a director of General Dynamics, the military contractor in which his family holds a large stake. The company has been the beneficiary of at least one Obama earmark, a request to spend $8 million on a high-explosive technology program for the Army's Bradley Fighting Vehicle. The program got $1.3 million.
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Crown said he and Obama never discussed General Dynamics, which, with its focus on Army programs, is a defense contractor that has benefited directly from the Iraq war. Obama's opposition to the war never meant that he wanted the armed forces to be poorly equipped, Crown said.

"I stand in agreement with what he has said [about the Iraq war.] Those who work in the defense industry are extremely focused on the national defense," he said. "That doesn't mean we want to be fighting wars."

Just as long as the money keeps rolling in.

Ward bosses in Philadelphia don't need to read the Post article to know that their candidate is not hurting for cash, and are ticked off that his campaign has no plans to take part in the tradition of street money for get-out-the-vote efforts. If they stick to the high road, the campaign could lose a few wards to Clinton.

Festivals of democracy at both ends of the most unequal society this side of Brazil...