You did it! The Era of Privatization has achieved its finest hour—the privatization of the United States Treasury. An agreement has finally been hammered out that legitimizes the $700 billion bank robbery that will line the pockets of the village idiots who run Wall Street.
Hank “Dillinger” Paulson has been handed sole oversight of how taxpayer money will be distributed to his cronies. You made it look good by only giving him $350 billion as seed money, with the understanding that he must ask Congress for more. On the surface, this looks like oversight, except that if Congress refuses the money, you can veto their decision.
In effect, a supine Congress has handed you the nation’s purse strings. An implicit Congressional power has always been their ability to cut off funding. For the first time, the executive can veto a decision to withhold funds, thus requiring a two-thirds majority to override the veto to exercise a power that, in the past, could not be vetoed.
I loved the bread crumb you threw to Main Street in that “the plan would require the government to try to renegotiate the bad mortgages it acquires with the aim of lowering borrowers’ monthly payments so they can keep their homes (emphasis mine).”
The Treasury isn’t purchasing individual mortgages, it’s purchasing Mortgage Backed Securities, which are bundles of undifferentiated mortgages, so there’s no way in hell they could identify individual homeowners. And even if they could, Paulson would undoubtedly claim that renegotiating lower payments would be irresponsible because it would reduce the amount of money the Treasury could recoup.
A decision to rewrite toxic mortgages should never be given to an irresponsible bankruptcy judge who would be swayed by emotional appeals from troubled homeowners. Far better to let a professional like Paulson handle it. Only he has the objective expertise to make decisions that will benefit Wall Street.
The plan does allow the use of stock warrants that would, in theory, give taxpayers a share in a company’s future profits. This is the same as taking out a lien on a corpse’s future earnings.
Companies will be allowed to opt for government-backed insurance, which they would have to be brain dead to select when they can exchange their toilet paper for the capital they so desperately need.
All-in-all, you have pulled off another coup. Once again, you have proven that all a powerful president needs to thrive, no matter how stupid he is, is a cowardly Congress.