Eight Bailout Questions

[piper17 1]

Eight Bailout Questions

How many times over the last few days have we heard politicians, talking heads and other self-proclaimed "experts" tell us the reason the $700 billion bailout is so wildly unpopular is that we just don't understand it. The economy is complicated. Just trust Congress, President Bush and his royal highness, Hank Paulson. They'll fix it. Don't worry about that $700 billion number. It only sounds high.

Well. If that's the case - if we're really too dumb to understand what's happening - perhaps Congress can show us how much they know. To start, here are some questions I'd like answered.

1) Since the White House introduced the bailout last week, a number of alternative ideas have been proposed. For one, Michigan Republican Thaddeus McCotter wrote a 10-point plan that carries no cost to taxpayers. Others, like George Soros', are significantly less expensive and, in his estimation, likelier to be effective. Can you explain why this bill is the best option, despite being the most expensive?

2) We're told the bailout could actually turn a profit for taxpayers. Assuming that's true, how can we be sure the money actually ends up back in taxpayers' hands? For years the Social Security system took in more money than it paid out, yet instead of putting the surplus revenue toward future benefits, Congress snatched that extra cash for general expenditures. Likewise, Fannie and Freddie's "profits," were used for congressional pet projects. With this track record, how can we trust that this program will be any different?

3) The McCain campaign yesterday pointed out that the most recent housing bill gave the government nearly $1 trillion to purchase mortgages. If this is true, why exactly does Congress need to pass this monstrous legislation?

4) Does the latest version of this bill still "allow the government to purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families"? Americans are having a hard enough time swallowing the idea of a bailout for irresponsible home, car, and student lending. The notion that we'll be on the hook for insolvent pension plans administered by awful, union-controlled lawmakers in cities like Detroit and New York is simply insane.

5) Does the bill's preamble still proclaim that the law "provides authority to the treasury secretary to ... ensure the economic well-being of Americans?" Does anyone know if there are limitations to this seemingly unbridled authority? Otherwise, what prevents the Treasury secretary from becoming a de-facto dictator? This strikes me as especially worth discussion.

6) Are there still no meaningful curtailments of Fannie Mae and Freddie Mac? Does the bill contain anything even hinting at accountability?

7) What concrete assurances do taxpayers have that the turmoil's provenance - Carter and Clinton-era social-engineering dictums that upended safe-lending practices in favor of higher minority home ownership - will forever be outlawed? How do we know taxpayers won't be asked to finance another $700 billion bailout in 10 years? What has Congress learned from its past mistakes?

8) After Enron's collapse, former CEO Jeffrey Skilling, then-CEO Ken Lay, and then-CFO Andrew Fastow, were called to testify before Congress. According to the Business and Media Institute, Fannie's and Freddie's overstated earnings were 19 times larger than Enron's fake numbers. So when can we expect Congress to call Jim Johnson, Franklin Raines, Barney Frank, Chris Dodd, and the rest of Fannie's and Freddie's enablers to testify before Congress?

At the end of the day, we're not being asked to bailout Wall St. so much as we are the Democratic Party. For $700 billion, answers to the questions above are the least Congress can do in return.

These questions come courtesy of Laura Ingraham.

"A man can never have too much red wine, too many books, or too much ammunition"...Rudyard Kipling

[billvon 3,071]

>1) Since the White House introduced the bailout last week, a number
>of alternative ideas have been proposed.

Agreed; there are a lot of alternatives. It is odd that even right wingers are now supporting Soros.

>2) We're told the bailout could actually turn a profit for taxpayers.
>Assuming that's true, how can we be sure the money actually ends up
>back in taxpayers' hands?

?? In NO case will it, or should it, end up in taxpayer's hands! Taxpayer refunds/stimulus are an even worse idea than this bailout. We should use any profit to pay down the debt.

>3) The McCain campaign yesterday pointed out that the most recent
>housing bill gave the government nearly $1 trillion to purchase
>mortgages. If this is true, why exactly does Congress need to pass
>this monstrous legislation?

Because it was targeted towards homeowner assistance and did not authorize any monies toward purchase of debt instruments from financial institutions.

>5) Does the bill's preamble still proclaim that the law "provides
>authority to the treasury secretary to ... ensure the economic
>well-being of Americans?"

Yes. Under the section titled "PURPOSE" the statement is "Provides authority to the Treasury Secretary to restore liquidity and stability to the U.S. financial system and to ensure the economic well-being of Americans."

I don't have a problem with that part of the bill because that IS its purpose.

>6) Are there still no meaningful curtailments of Fannie Mae and
>Freddie Mac? Does the bill contain anything even hinting at
>accountability?

That's a big problem with this bill. It applies a band-aid without doing anything about the underlying causes - irresponsible trading of opaque debt instruments.

>7) What concrete assurances do taxpayers have that the turmoil's
>provenance - Carter and Clinton-era social-engineering dictums that
>upended safe-lending practices in favor of higher minority home
>ownership - will forever be outlawed?

Standard right wing political attack #84, already debunked here.

> How do we know taxpayers won't be asked to finance another $700
>billion bailout in 10 years? What has Congress learned from its past
>mistakes?

We almost certainly will. Everyone was asking the same thing after the 1989 bailout (over $150 billion.)

> So when can we expect Congress to call Jim Johnson, Franklin Raines,
> Barney Frank, Chris Dodd, and the rest of Fannie's and Freddie's
> enablers to testify before Congress?

?? Neither Bush nor Cheney were called to testify before Congress after the Enron scandal, even though their assistance helped Enron achieve many of their more egregious schemes. I'd expect to see the people responsible for the worst of the loans to get called before Congress, though.

[kallend 2,106]

Quote

So when can we expect Congress to call Jim Johnson, Franklin Raines, Barney Frank, Chris Dodd, and the rest of Fannie's and Freddie's enablers to testify before Congress?

You might include Phil Gramm, who sponsored the "Enron Loophole" which allowed companies to hide their problems while looking strong and healthy.

But I don't suppose you would want to.

[piper17 1]

Well, if you want to include him, fine, although I'm not sure how Enron is relevant in the current financial mess.

Now, about the bunch of Dems I named.....

"A man can never have too much red wine, too many books, or too much ammunition"...Rudyard Kipling

[billvon 3,071]

>although I'm not sure how Enron is relevant in the current financial mess.

The act Kallend refers to (CFMA) both created the Enron loophole (which led to the eventual collapse of Enron) and deregulated CDS swaps (which led to the bailout of AIG.)

[SkyDekker 1,465]

Quote

Now, about the bunch of Dems I named.....

Your thought process is fundamentally flawed if you can only look at this as a D or R issue.

[piper17 1]

I'm asking him to refute what I posted regarding the quotations of Barney Frank et al who were responsible for the lack of financial standards in the Fannie Mae debacle. All he does is try to change the subject.

Why is it okay for some here to constantly lay the blame for everything that goes wrong in this country on Republicans but refuse to acknowledge the sins of Democrats?

"A man can never have too much red wine, too many books, or too much ammunition"...Rudyard Kipling

[billvon 3,071]

>Why is it okay for some here to constantyly lay the blame for
>everything that goes wrong in this country on Republicans but refuse to
>acknowledge the sins of Democrats?

JohnRich: "Democrats Created the Financial Crises"

And all is back in balance.

[SkyDekker 1,465]

I am sure there is enough blame to go around for both Ds and Rs.

For me personally, fact remains that a R has been the captain of the ship for the last 8 years. Makes it time for a D to be captain and see if he can get the ship pointed in a different direction.

If in your mind all the mistakes were made more than 8 years ago (and I just don't agree with that), why hasn't the R who has been in power for 8 years done something about it?

[piper17 1]

I don't believe all the mistakes were made more than eight years ago. There are plenty of politicians on both sides of the aisle that were feeding at the Fannie Mae trough.

BUT when some Republicans, including McCain, tried to introduce legislation to rein in Fannie Mae, they were voted down by others - Republicans and Democrats alike.

"A man can never have too much red wine, too many books, or too much ammunition"...Rudyard Kipling