Smell a rat if Congress approves the Paulson plan without major modifications that might help Main Street as well as Wall Street.
By Robert Scheer
Does it really matter which party is in charge when it comes to bailing out the Wall Street hustlers whose shenanigans have bankrupted so many ordinary folks? Not if the Democrats roll over and cede power to the former head of Goldman Sachs, the investment bank at the center of our economic meltdown.
What arrogance for Treasury Secretary Henry Paulson -- who the year before President Bush appointed him Treasury secretary was paid $16.4 million for heading the company that did as much as any to engineer this financial travesty -- to now insist we must blindly trust him to solve the problem. Paulson is demanding the power to act with "absolute impunity," said Sen. Christopher Dodd, D-Conn., who admonished the Treasury chief: "After reading this proposal, it is not only our economy that is at risk, Mr. Secretary, but our Constitution as well."
Clearly, it's a vast improvement to have Dodd in the chairman's seat of the Senate Banking Committee, asking the right questions, rather than his predecessor, Texas Republican Phil Gramm, who presided over the committee in the years when the American economy, long the envy of the world, was viciously sabotaged by radical deregulation legislation.
Gramm, whom Sen. John McCain backed for president in 1996, pushed through the financial market deregulation that has brought the U.S. economy to its knees. Maybe this time Congress won't give the financial moguls everything they want, including a bailout for foreign-owned banks like Swiss-based UBS, where Gramm now hangs out as a very well-paid executive when he's not advising the presidential campaign of McCain, his old buddy and partner in crime. Oops, sorry, no crimes were committed because the deregulation laws Gramm pursued and McCain faithfully supported decriminalized the financial scams that have proved so costly....(Click here for remainder).
By John Nichols
Treasury Secretary Henry Paulson draft proposal for the bailout of struggling financial-services firms sought to make himself the most powerful unelected official in American history through his proposal to take charge of vast sectors of the U.S. economy -- setting policy, buying and selling assets, determining whether financial institutions thrive or collapse -- with no oversight.
Under Paulson's draft plan, Congress and the courts would have been barred from reviewing or challenging his moves to stabilize financial markets -- effectively making him the nation's economic czar.
That's not just a dangerous power grab for economic and politic reasons. It's unconstitutional.
Paulson's power grab was specifically spelled out by the treasury secretary in Section 8 of his proposal, which read: "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."
Senate Banking Committee Chris Dodd, the Connecticut Democrat who sought his party's nomination for president this year but has arguably emerged as a more influential player in his role as the congressional point-man on a crisis that is bigger than an election, pushed back on Monday....(Click here for remainder).
Posted by Bret M-C at 6:53 AM
By Thomas Frank
The Wall Street Journal
Last week, Republican presidential candidate John McCain called for a commission to "find out what went wrong" on Wall Street. It was an excellent suggestion: Public inquiries into Wall Street practices served the country well in the 1930s.
And Mr. McCain has a special advantage to bring to any such investigation -- many of the relevant witnesses are friends or colleagues of his. In fact, he can probably get to the bottom of the whole mess just by cross-examining the people riding on his campaign bus. So the candidate should take a deep breath, remind himself that the country comes first, pull the Straight Talk Express over at a rest stop, whistle up his media pals, and begin.
Topic A should be deregulation. Financial institutions are dropping everywhere after playing with poorly regulated financial instruments; the last investment banks standing are begging the government for stricter oversight; and some of our nation's leading champions of laissez faire have ditched that theory in an extraordinary attempt to rescue the collapsing industry.
The philosophy of government that has dominated Washington for almost three decades is now in ruins, and it is up to Mr. McCain to find out exactly why we believed it in the first place. Why did government stand back and permit all the misconduct that generated all this bad debt? What particular ideas led us to believe that government should just keep its hands off and let markets run their course?
Maybe the McCain Commission on Deregulation can kick off with a statement from the candidate himself. It will be helpful for the public, if painful for the senator himself, to hear about Mr. McCain's own close brush with one of the towering figures of financial deregulation, Charles Keating, the master of Lincoln Savings and Loan. Keating had a special, urgent interest in getting Big Brother off our backs: in 1986 some meddlesome agency suspected him of massive violations of S&L regulations. Keating fought back by recruiting a handful of legislators, including Mr. McCain, to pressure S&L regulators to leave his S&L alone. A few years later, Lincoln became one of the largest financial failures in U.S. history....(Click here for remainder).