Sunday, September 21, 2008

holy shit

that's it? that's the bailout plan? the federal government can give out $700 bil. to buy bad mortgages with no limits on financial institutions, no requirements of greater transparency to make sure this doesn't happen again, nothing.

it also says nothing about the price, which is a big deal, there is no real "market rate" for the bad or likely bad debts because the market is too scared to touch these things. and let's be clear, the mortgages that will be bought are the ones that are thought to be bad debts. troubled financial institutions are better off holding on to any "good" (i.e. profitable) mortgages. they're going to unload the dogs on the taxpayers at an inflated price. without any statutory guidelines on price, bush's ideologically pro-business flunkies are going to be paying ridiculously high prices for those things, all at the taxpayer's expense.

but the craziest thing of the entire act is this, section 8:
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.
no checks, no balances. in effect, secretary paulson could give the entire $700 bil. to his mistress's company in exchange for a single bad mortgage and that would all be perfectly legal under this bill.

actually, i'm not even sure it would have to be the mistess's company. if he gave it directly to her, it would seem to violate the law--the mistress is not a "financial institution". but without court review, there's no mechanism for enforcing it. if paulson just gave her the money, without even getting a mortgage in return, it doesn't seem like there would be anything to stop him.