Maine Owl

Maine 2nd District Rep in majority blocking taxpayer hosing in Wall Street bailout

Representative Mike Michaud, despite tremendous pressure from Democratic leadership, came down today on the side of working people everywhere by joining a 228-205 majority against the deceptive, rush $trillion Wall Street bailout bill. I deeply thank Congressman Michaud and hope he has the guts to stand against the backlash of traders who had their salivation for taxpayer money dashed today, tanking the Dow by 777 points.

The basic effect of the bill would have been to create a financial czar out of Paulson. Paulson would have been authorized to operate "on such terms and conditions as are determined by the Secretary, and in accordance with this Act and the policies and procedures developed and published by the Secretary." He would have had virtually dictatorial authority over "TARP," a "Troubled Assets Relief Program"--save for an extremely weak oversight board stuffed with inside people and a toothless Inspector General empowered to write reports.

This is being fashioned as a lose-lose proposition for Democrats. No matter that the opposition was more Republican than Democrat, as I expected, the blame is already being heaped upon Pelosi. What the Speaker did was give Bush a couple of mild jabs in her message just before the vote. This is her infuriating style. Just before another awful taxpayer hosing, the $165 billion Bush Iraq war blank check back in June, she decried the whole thing after engineering its passage. The only difference this time is that the Bush-Paulson measure failed to pass.

Call Mike at (207) 942-6935 and thank him for seeing through this taxpayer disaster care of Barney Frank, Nancy Pelosi, Henry Paulson, and George Bush. As I wrote a few days ago, the pressure is only beginning because the markets are voting "with their feet by going on a credit strike while the stock market tanks." It will take a lot of fortitude for any Rep in the "nays" today to remain standing.

(Some analysis about how bad this bill is continues below.)

Included with Mike in the majority against was Congressman Dennis Kucinich, who today in an interview on Democracy Now! had these remarks about the bailout:

Rep. Dennis Kucinich Rejects $700 Billion Bailout

REP. DENNIS KUCINICH: [The bill] has provisions in it where it talks about helping homeowners, but when you read the fine print, you see it has language like "may" instead of "shall" and "encouraging" instead of "mandating" help for the millions of homeowners who are worried right now about whether they’re going to lose their home. There’s no help for them in this.

So what we have here is a rescue plan that essentially gives all the speculators a bailout and puts the bad debts in the custody of the government. The president of the Dallas Federal Reserve Bank has said that this plan could create a fiscal chasm, says that the problem isn't tight monetary policy, it's the reckless behavior of some of these investors who have now found themselves in a position where a government bailout is going to help reward their bad behavior.

AMY GOODMAN: Is it any better than when it was first introduced by the Treasury Secretary, by Henry Paulson?

REP. DENNIS KUCINICH: Well, you know, that implies that you would accept the underlying premise. I reject the underlying premise that we needed this bill. And as a matter of fact, that we're putting this up before an adjournment in an election season shows that Congress is being put under extraordinary pressure to bail out Wall Street. We haven't looked at any alternatives, Amy. This is—you know, it isn't as though, if you had a liquidity crisis, that—you know, a real one—that you'd start to look at all the alternatives. We haven't done that. We have a bill here, a bill of more than a hundred pages, that we haven't had a single hearing on the bill, you know—on the concept, yes, on what Paulson and Bernanke asked for initially. But, you know, we need to have hearings on this. There's 400 economists and three Nobel Prize-winning economists who have said, "Whoa, wait a minute! What are you doing? Why are you rushing this?" You know, this thing doesn’t smell right, frankly.

I downloaded the bill HERE and had a look at some of the provisions. Dennis Kucinich is right on and I do NOT trust Barney Frank, Nancy Pelosi, Hank Paulson, Bush and just about the entire "wall" of the Wall Street press who are for the benefit of those ingrate naysayer Congressmen striking a threatening pose, inculcating fear of cutoff of "Main Street" credit lines.

To see what I mean, read the bill and enumerate the sweeping power to obligate taxpayers Paulson would have been granted: Look at this, for example:

SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD.

(a) ESTABLISHMENT.—There is established the Financial Stability Oversight Board, which shall be responsible for—

(1) reviewing the exercise of authority under a program developed in accordance with this Act, including—

(A) policies implemented by the Secretary and the Office of Financial Stability created under sections 101 and 102, including the appointment of financial agents, the designation of asset classes to be purchased, and plans for the structure of vehicles used to purchase troubled assets; and

(B) the effect of such actions in assisting American families in preserving home ownership, stabilizing financial markets, and protecting taxpayers;

(2) making recommendations, as appropriate, to the Secretary regarding use of the authority under this Act; and

(3) reporting any suspected fraud, misrepresentation, or malfeasance to the Special Inspector General for the Troubled Assets Relief Program or the Attorney General of the United States, consistent with section 535(b) of title 28, United States Code.

Some "oversight." The Board would get to "review," "report," and "recommend," but not require anything at all. And look who'd be on the Board: (1) the Chairman of the Board of Governors of the Federal Reserve System; (2) the Secretary; (3) the Director of the Federal Home Finance Agency; (4) the Chairman of the Securities Exchange Commission; and (5) the Secretary of Housing and Urban Development. Basically the same insiders who are running the show anyway. It's a sham.

And there is no guarantee any of this is going to work. If the issue is business, homeowner, and consumer credit drying up and grinding the economy to a halt, wouldn't a $700 billion shot of taxpayer money applied directly to community institutions in order to loosen credit in an end-run around failed financial thieves be a better deal? Nobody is even exploring such possibilities in the rush to crush the Republic and establish the czar.