Time Is Energy

"Absolute power corrupts absolutely."

Lord Acton's quote: "Power tends to corrupt; absolute power corrupts absolutely" seems timely and appropriate.

At this point I agree with Krugman: no deal!

I realize this is only a draft plan [or is it a dream?] and will (certainly??) be revised by congress. But the most important details are missing (how they plan to take all this bad debt off the banks books...i.e. how is it priced) and more than even this: I don't like what I do see.

At its essense this "plan" proposes giving "the Secretary" $700,000,000,000 unconditionally, w/o recourse and no questions asked. On its face, this is the greatest, non-military, power grab in history. I believe the Robber Barons of a century ago would blush at proposing such a plan.

Among the highlights [bold sections are my doing for emphasis]:

Authority to Purchase.--The Secretary is authorized to purchase, and to
make and fund commitments to purchase, on such terms and conditions as
determined by the Secretary, mortgage-related assets from any financial
institution having its headquarters in the United States.

Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation

In exercising the authorities granted in this Act, the Secretary shall take
into consideration means for--
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.

Within three months of the first exercise of the authority...and semiannually thereafter, the Secretary shall report to [the relevant congressional committees]

For the purpose of the authorities granted in this Act, and for the costs
of administering those authorities, the Secretary may use the proceeds of the
sale of any securities...to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

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.

The term “mortgage-related assets” means residential or commercial
mortgages and any securities, obligations, or other instruments that are based
on or related to such mortgages

Read the whole thing here on the NYT website.

There is not even a pretense of "checks and balances" or constitutional oversight--indeed the judicial and executive branch are explicitly denied the right to review ANY decision! The only duty/obligation in the entire "plan" is for "the Secretary" to report to a few congressional committees every now and then. Unless you think "consider" protecting the taxpayer could somehow be construed as an obligation.

Saints alive! Hank Paulson, our (current) Treasury Secretary is not a bad man, but this is too much power (& MONEY!) to just give one guy and just hope that everything works out okay. "Trust me" just isn't going to cut it given the Bush Administration trackrecord.

I cannot allow my representatives to be stampeded into such a reckless "plan" without placing some SERIOUS safeguards and oversight and limitations on it. Quick action may sometimes be necessary, but reckless never is!

The last time we had such a sense of bipartisanship "urgency" in Washington we wound up in Iraq...

posted by Daniel @ 6:57 PM