These add ons are pure opportunistic political BS. On Oct 2, 2:12 pm, "M.A. Johnson" <[EMAIL PROTECTED]> wrote: > More on That Monstrous BillPosted by Lew Rockwell at October 2, 2008 12:49 PM > Writes a journalistic star:The news articles I've read about the $700 billion > Senate bailout bill are focusing on the politics. They haven't offered much > analysis of what's actually in it, except to say there's a Troubled Assets > Relief Program (or TARP), that the FDIC account limits are raised to $250,000 > and that the SEC is authorized to waive its mark-to-market accounting rule.So > I read the whole thing myself -- and found odd things like production credits > for "marine renewables" and specifications for "residential top-loading > clothes washers." My analysis is based on the final Senate version that you > can read for yourselfhere.I also found lots of problems. Some of them > are:Procedural: The original Bush administrationproposalwas just two pages > long and at least easy to understand. The latest Senate version has ballooned > to an amazing 250 pages, including a huge chunk on energy-related > regulations, with no hearings on the final draft and only hours for > politicians to review something that's quite complex. This is the same > rush-the-flawed-legislation-through process used for the Patriot Act seven > years ago.Loopholes: A financial institution can buy $50 billion of financial > toxic waste in the form of subprime mortgages, declare bankruptcy, and the > Treasury Department is permitted to buy the toxic waste for $60 billion. Or > $100 billion. Even though the Treasury should be required to pay _less_ than > the original purchase price, that requirement does not exist across the board > in this bill. And you can bet that every financial lobbyist in town will be > pressuring Congress and the administration to buy up their client's toxic > financial assets for insanely high prices. The political process begins to > crowd out the free market.Making housing less affordable: The U.S. Treasury > would be authorized to "guarantee" home mortgages, essentially becoming a > co-signer, to eliminate foreclosures. If the home-owner stops paying his > mortgage, taxpayers will be on the hook. The Treasury Department can also > eliminate a "reasonable" amount of a home owner's mortgage debt. This slows > the rate of house prices falling, preventing housing from becoming more > affordable. And why should careful, frugal homeowners or renters -- who lived > within their means -- bail out speculators who didn't? This is in Section > 109.Golden parachutes: There is no statutory dollar limit on how high > executive salaries of TARP bailout recipients can be. Section 111 merely says > the Treasury Department will come up with "appropriate standards," whatever > that turns out to be. And only the top five executives will have their golden > parachutes even theoretically limited. All the rest will remain untouched, > even if their second-tier salaries and bonuses happen to be in the millions > or tens of millions. It's also unclear whether stock options or grants will > be covered, which is probably what led Sen. Bernie Sanders to say: "This bill > does not effectively deal with the issue of executive compensation and golden > parachutes."Tax deduction: While salaries of failed executives would have no > statutory limit, TARP-participating companies would lose a tax deduction if > they pay their top executives more than $500,000 a year. But it's not clear > how the cap applies to executives at privately-held companies. Chrysler is > privately-held; what if its lending arm falters because of bad car loans and > it signs up for TARP? In addition, the $500,000 limit only kicks in if the > company offloads at least $300 million in assets through TARP.$700 billion is > not the limit: Section 115 of the bill says that the administration can, > after notifying Congress and waiting 15 days, purchase and hold $700 billion > of assets "at any one time." This is a remarkable loophole. It permits the > Treasury Department to buy up, say, $700 billion in 2008, sell those assets > off gradually over the next year at a (probable) loss, and repeat the same > process in 2009. Losses to taxpayers, in other words, could exceed $700 > billion.Judicial review: Unlike the original Bush administration proposal, > judicial review does exist. Sort of. The reality is that Section 119 sharply > limits it, tilting the playing field toward the U.S. government if it ends up > getting sued as a result of a TARP bailout. Judges cannot issue injunctions > related to TARP except for "a violation of the Constitution" (fat chance) and > the Feds get automatic halts to any injunctions related to other sections of > the law.The 2013 tax hike: If the TARP ends up costing taxpayers money, the > president may ask Congress to consider enacting a law to recoup "from the > financial industry an amount equal to the shortfall," presumably through > higher taxes. But Congress is under no obligation to do anything; a mechanism > to cover the shortfall does not exist in this bill. The other problem is that > the firms that benefited the most from TARP may have disappeared five years > from now. Why should new companies founded in 2013 pay higher taxes for a > bailout that took place in 2008?FDIC coverage: Even though FDIC coverage > would be boosted from $100,000 to $250,000 per account through December 2009, > premiums to banks may not take "into account" the higher account coverage. > Premiums can't increase for that reason. That encourages more risky behavior > on the part of banks.It's true that is more oversight than in earlier > versions, including $50 million to be spent on an inspector general, and a > legislative branch "Oversight Panel" producing monthly reports. But even if > you support the idea of a bailout in principle, there are plenty of reasons > to oppose this particular bill.UPDATE from my friend:FYI the final as-passed > Senate version ishere, and is even worse. See, for instance,this. --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. 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