David Corn: Bailout or Bunco?

[babylonsister]

http://blogs.cqpolitics.com/davidcorn/2008/11/bailout-or-bunco.html

Bailout or Bunco?

By David Corn | November 13, 2008 10:35 AM


Remember weeks ago, when a small number of public voices were counseling to go slow on the $700 billion bailout for Big Finance? They said there was--despite Treasury Secretary Hank Paulson's urgent pleas--no need to rush. They said that Congress ought to hold hearings and examine various alternatives to Paulson's blank-check plan. They said that the Bush administration and the Democrats in Congress (including then-presidential candidate Barack Obama) were merely throwing money at a problem without proceeding in a deliberate manner. You can see here for examples of such naysaying.

Well, they (which includes me) were right. Take a gander at the top of the front page of The Washington Post. To the right, you will find a story reporting:

Treasury Secretary Henry M. Paulson Jr. announced a series of moves yesterday that redefine the federal government's $700 billion rescue plan for the financial industry in order to tackle what he called a dire situation in the consumer credit markets.

In recasting the program, the Treasury no longer plans to buy troubled assets from financial firms, the idea initially presented to the country, but instead will offer aid to banks and other firms that issue student, auto and credit card loans in part by jump-starting the market that provides financing for these companies.

That is, Treasury is taking those hundreds of bllions of taxpayer dollars Congress gave it and now using it in a completely different manner than it said it would. Maybe this will be a better deployment of those bucks. Maybe it won't. But shouldn't there have been some public debate or discourse about the shift? Whose money is it, anyway?

Next, shift your eyeballs slightly to the left, and you will see a related article reporting:

In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

"It's a mess," said Eric M. Thorson, the Treasury Department's inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. "I don't think anyone understands right now how we're going to do proper oversight of this thing."

Get the picture? The program was misdirected, is being redirected, and has no oversight. By the way, it will probably cost more than the $700 billion first mentioned.

It is a mess. A gigantic mess. Just one of the several George W. Bush (with the help of Congress) is bequeathing Obama. The new president and his people better have some good ideas for making it work better. For even though it was made in the Bush administration, if this quasi-con game continues along this present course after January 20, Obama will own it.

[acmavm]

1. I was for NO FUCKING BAILOUT!

And I was right (along with a bunch of others here). We should be running things obviously.

This was a last raid by the republicans to bankrupt us all.