PrintSeptember 28, 2008
The Bailout Plan as of Sunday Morning
Nancy Pelosi has a draft financial rescue plan this Sunday morning, according to Fox News . It's scarier than anything else you'll see this Halloween season.
Here is one statement from that plan:
If the government loses money, the financial industry will pay back the taxpayers.
Only one of two things can happen here. If the government loses money because the financial industry goes broke, then there is no financial industry to pay us back. If the financial industry does not go broke, it means those companies that ran their firms well will bail out the government who bailed out the companies that did not run their firms well. If we think the financial industry can stay that healthy, then what are we doing this for?
Here's another scary line.
Allows the government to purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families.
Do you know how many pension plans are in trouble? Only about all of them. This little clause now tells every city mayor to go for broke. It's olley-olley-ox-in-free for them. They no longer have to worry about their police pensions and firemen's pensions when writing their local budgets, because Uncle Sam's got them covered. But it's not only pension plans, but all "troubled assets". This thing is a blank check for government to acquire every asset in the United States. (Except the untroubled ones, of course.)
Those are the things in the plan. What's not in the plan? Anything to do with any rule or regulation that got us here in the first place. No changes in HUD rules. No changes in lending rules. If the Democrats think the Gramm-Leach-what's-his-name bill caused all this, not a word of reforming it is in this plan. What is in the plan regarding reform?
A strong oversight board appointed by bipartisan leaders of Congress.
That's comforting. More oversight by Congress. So they won't change any of the rules and regulations that got us here, but they will add more layers of bureaucracy. Not to mention, Congress already had oversight of everything about this from the git-go. In fact, that was the problem.
I had been on the fence about this whole bailout thing, leaning slightly against. Now I'm dead set against it. I'm not sure there is a crisis. But even if there is, I cannot imagine it could be worse than the effects of this kind of plan to fix it.
The only thing we have to fear is Congress itself.
