Text of the Bailout Act

Current Events Economic News
1

Wow, I actually looked through this absurdity and started getting really scared when thinking about how this might have (and still may) get passed in some form:

http://www.washingtonwatch.com/blog/2008/0…e-really-payin/

for instance:

The Secretary of the Treasury shall have the authority for:

Designating financial institutions as financial agents of the Federal Government, and such institutions shall perform all such reasonable duties related to this Act as financial agents of the Federal Government as may be required.

in effect (correct me if I am wrong) unilaterally giving him the authority to seize and nationalize any financial, insurance, or investment company in the country for any whim of his.

Combined with:

SEC. 111. The standards required under this subsection shall include… limits on compensation that exclude incentives for executive officers

Means in effect, if the Secretary (or more realistically the President) doesn’t so much as like the way a CEO looks at him, can unilaterally seize that company and impose salary restrictions on that CEO. So if McCain who thinks corporate greed is evil and the problem with the economy gets elected, can hypothetically seize and control the salary of any CEO he feels is being greedy.

Moreover, we are made to believe a main point of this bill is to help forclosing homeowners, ah but if we read…:

TROUBLED ASSETS.—The term “troubled assets” means— residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008

So in other words, unless you closed on your house within the past 6 months (well after the subprime bubble had already burst), and you go into forclosure, you’re on your own and this bill is of no help to you.

2

I was particularly disturbed by the authority that this proposed legislation was giving to the Secretary of the Trasury, and even more disturbed to find this power as a rarely listed objection amongst those that opposed the bill. Everyone seems hell-bent on emphasizing how the American taxpayer should not bear the financial responsibility for these firms’ bad business decision, which is a valid objection, but the fact that no one is really questioning the authority that the Sec of Treasury would be obtaining is just plain scary. If someone knows of a legislator opposing this point specifically, please let me know. Checks and balances are key in a well-functioning, and righteous, government. They are meant to prevent one person or element from wielding too much control over any one aspect of the government. These powers which Congress keeps suggesting we give the Secretary of the Treasury seem to defy that checks and balances even exist. The controls that the legislature can enact over a Secretary are weak, at best. Say, for example, he does become an economic tyrant (as these drafts of legislation would legally allow him to become) who is to stop him? I find it ironic that there is more red tape involved in Congress being able to “control” an unsavory cabinet member than there is for a cabinet member being able to assume absolute control over matters that should not be of his concern or prerogative in the first place. Sounds pretty backwards to me. Sounds like COngress just wants to pretend that the ideological foundations of our government just are not very important in times of “economic crisis.” Giving absolute control to anyone over anything to the extent that this seems to be suggesting smacks of absolute monarchy to me. Didn’t we fight a revolution against that? Or has COngress rewritten history to exclude that complicating factor known as the AMERICAN REVOLUTION? It’s hard to keep track’ politicians keep changing their minds over what that event actually means to them.

As for Sec 111, I took that more to mean that there would be limits placed on the compensation packages for the executives of these firms if they accepted the bailout. That part isn’t so bad; I do not think these executives should be able to make millions of dollars in profits for themselves as a “reward” for running the business into the ground, at the taxpayers’ expense, no less. But then again, I don’t think the bail out should occur anyway, and I am pleased to see that it failed to make it through the house today. If free market eceonomics played out, these men would not profit at all because the companies would lose all their assets as a result of their bad decisions. So you see, there is a way for these men not to profit that doesn’t involve the government stepping in and putting some limit on it as a contingent requirement of the government intervening in their welfare. If lawmakers don’t want to see these execs profit, it’s simple: don’t bail them out! Then you don’t even have to bother thinking about compensation limits.

3

The Secretary of the Treasury shall have the authority for:

All hail King Henry!

4

Hey, I closed on my Mortgage in early April. I need to make sure this passes before Tuesday!

(retch)

5

Moreover, we are made to believe a main point of this bill is to help forclosing homeowners, ah but if we read…:

So in other words, unless you closed on your house within the past 6 months (well after the subprime bubble had already burst), and you go into forclosure, you’re on your own and this bill is of no help to you.

Actually, if it says “on or before March 14, 2008”, wouldn’t that mean if you purchased a home on or before the 14th of March, 2008, that you are included in this statement? That would exclude the last 6 months, not include it.

Is this a typo?

6

Actually, if it says “on or before March 14, 2008”, wouldn’t that mean if you purchased a home on or before the 14th of March, 2008, that you are included in this statement? That would exclude the last 6 months, not include it.

Is this a typo?

No, not a typo; most of the mortgages that are in trouble are from 2005, 2006 and 2007.

7

That would exclude the last 6 months, not include it.

Oh, you’re correct, I didn’t pick up on that. Oops.

8

No, not a typo; most of the mortgages that are in trouble are from 2005, 2006 and 2007.

Yes, I know. I was just confused when the OP said that actual troubled mortgages were excluded.

Of course, I’m glad that this was shut down. Whether it will stay that way is another story. I am a little pessimistic.

9

“Give me control over a nation’s currency and I care not who makes its laws.”

  • Baron M.A. Rothschild

If you haven’t seen it, Zeitgeist. is worth watching. A lot of it seemed historical and academic when I saw it about a year ago. Funny how history repeats itself.