Wednesday, September 24, 2008

Bailout Blitz

I haven't posted in a bit because things are economically, really, really ugly right now and I'm not sure I have a handle on it. I do know that the bailout proposed by Henry Paulson is a terrible, terrible thing if passed as is. 

Here is what I know:
1) For one thing it costs at least 700 billion. This is the figure that is being touted around the media but it's important to remember that this is not the cap, it is the bottom number of how much this could cost us, the taxpayer.
2) As it stands we would be buying up this junk stock for at least twice its value and because it is junk we would (as tax payers) lose even more money on the deal. And if by some small miracle there is any profit to be made on these we won't see any of it as it will go to the companies we are bailing out. 
3) Part of this will go to prop up foreign banks who are in trouble.
4) The CEOs of these companies will not be taking any hits as far as their "golden parachutes" goes - that is, when they leave they will still take with them millions to billions of dollars. You destroyed your company and our economy? Here's an extra couple of million to see you home safely.
5) Two of the most left and right polar NY Times op-eders Krugman and Kristol  agree for probably the first time ever that this bailout is a bad idea, thus signaling the apocalypse. I know someone right now is shouting "Fallacy. Argument from authority!" Look, I'm not saying they are right, I'm simply pointing out that this isn't a plan that automatically causes banner waving for your home team. ("Go Independents!") 
6) There is a clause in the bailout that gives Paulson a ridiculous amount of power and a complete blank check (see # 1). It specifically states: "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." Wow. 
7) Democrats have a history of caving to fear mongering politics of the Republican leaders. Right now it doesn't look like they are going to let Paulson have his way thanks to Dodd and Reed, but I'm still worried. 

I will tell you my hope - that this will finally splinter the Republican party into two different political parties. One party, the minority, would resemble the current GOP with strong support from the religious right and corporate welfare proponents. The other will resemble or be subsumed into the Libertarian party as most Republican voters I've talked to actually resemble Libertarians far more than they resemble Republicans. This will then set a precedent on the Democratic party to splinter into two more parties and we will finally have some real choices. Again, this is just my hope.

The Rational Moderate 

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