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Wednesday, September 24, 2008

The Trojan Trust


Trojan HorseCongress isn't authorizing the $700 billion bailout immediately! Good freakin' God, if they don't pass it five minutes ago, we're all doomed! If Wall Street doesn't get all that lousy debt bought up, we'll return to the stone age. We'll be reduced to hunter/gatherers, chasing down white tail deer with rocks and spears. The only thing we'll have to wear will be smocks made from our now useless money. What is the holdup? What is the holdup?!?

Sen. Chris Dodd:

It would do nothing in my view, to help a single family save a home, at least not upfront. It would do nothing to stop even a single CEO from dumping billions of dollars of toxic assets on the backs of American taxpayers. While at the same time do nothing to stop the very authors of this calamity to walk away with bonuses and golden parachutes worth millions of dollars. And it would allow the Secretary and his successors to act with absolute impunity without review of any agency or court of law. After reading this proposal, I can only conclude it is not just our economy that is at risk but our Constitution as well.

OK, so there's that. The bill authorizing the bailout, as written, is freakin' awful. The White House tried to buffalo Congress into passing the bill, trying to whip up panic and using the crisis as cover. They'd managed to pull that off once before, and we got the PATRIOT Act. They thought they could do it again.

But the problem with the Trojan Horse is that you can only use that tactic once, then everyone's on to it. If the Achaeans had shown up at the gates of another city with a big wooden horse a few years later, I doubt anyone would've said, "Cool! Let's bring it in."

But here are the Bushies again, showing up at the gates of Congress with their hollow horse, asking Congress to let them in. It didn't go well.


There was a time when Dick Cheney could turn back a Republican revolt on Capitol Hill.

That time is gone.

The vice president traveled to Capitol Hill on Tuesday to silence a chorus of GOP complaints about Treasury Secretary Henry Paulson’s $700 billion plan. But House Republicans who walked into a closed-door meeting with Cheney steaming over the plan walked out just as angry, and they described what happened in between as both “a bloodbath” and “an unmitigated disaster.”

Don't you wish there was video?

At issue was thirty-two words which were a really bad idea. Section 8 of the bill reads, "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." I'm not sure, but I think this level of oversight constitutes a literal license to kill. It's certainly a license for abuse. Treasury Secretary Paulson insisted he wanted oversight, but thought it would've been "presumptuous" to write oversight in himself -- a claim the wording of the section makes laughable. Apparently, it's not presumptuous to give yourself dictatorial powers and declare yourself above any law.

Polling shows that voters oppose bailouts -- 55%-31%, even if collapse would hurt the economy. But it seems almost certain to happen. That same polling show that voters think Obama would do a better job with the crisis than McCain -- 45%-33%.

Obama's take on the bailout looks good. Section 8 is out, in his opinion, but that's really a no-brainer and no one likes that -- it's a dead issue. A lack of regulatory reform is a deal killer, as is a lack of help for homeowners. International aid for what is essentially an international crisis is an Obama requirement as well.

But what we really need here is a healthy round of good old fashioned trust-busting. We're bailing out these companies because they've become too big to fail. As a result, the taxpayer becomes the insurer of the last resort, since the United States cannot allow these institutions to collapse. "Too big to fail" should become synonymous with "too big" and anti-monopolistic measures should be taken to make sure no corporation, company, or firm is "too big to fail." When this happens, bailouts will become a thing of the past. Our current system of bass-ackward socialism, where profit is private and loss is nationalized, can't continue -- especially not with the unbelievably massive debt the Bush administration has left us with. Debt upon debt upon debt will bankrupt us eventually. It has to stop. Antitrust laws really aren't anything more complicated than not putting all your eggs in one basket.

Odysseus Cheney may not have tricked us into bring the horse inside this time, but the problem isn't this law, the problem is a system that allows companies to grow so huge and so important to our economy that this one company -- just the one -- can't ever be allowed to go under. When Bank of America bought Merrill Lynch, that was the wrong thing. That was the mistake we've been allowing to happen again and again and again. Giant mergers are anticompetitive, almost by definition, and leave us more and more reliant on fewer and fewer companies.

The root of the problem isn't a lack of oversight and regulation, although those definitely need to be addressed. The problem is that there are institutions in America that are "too big to fail." We may not have fallen for Bush and Cheney's Trojan Horse, but we're falling for the ones constructed by monopolies again and again and again.