Hank Paulson: Robber in Chief
September 21st, 2008Via: Housing Panic:
The Patriot Act of Finance, otherwise known as Paulson’s $700 billion bailout bill, if passed in its present form will be the nail in the coffin for an America by, for and of the people.
Just like the Patriot Act appeared to be written before 9/11, so does this Patriot Act of Finance appear to be written before the housing crash. And yes, both were rushed through a panicked Congress and complacent media in the middle of the night.
A nation founded by the people, for the people will be given to a very select group of bankers. Legally. Without a shot fired. Because Americans were too distracted and too dumb to know what was going on.
Brilliant.
Here’s how it will be done:
1) The key line in the proposed bill is this one:
“The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to 700,000,000,000 dollars outstanding at any one time”
What this does is give Hank Paulson, acting as an emperor with unchecked control over the nation’s treasury, a $700 billion line of credit in which he can buy up toxic debt for whatever price he’d like to pay, $700 billion at a time.
In other words – he could buy trillions. Trillions and trillions and trillions. Buying and selling, buying and selling.
He can sell the junk he buys from his banker friends for whatever price he wants, saddling the taxpayers with the loss. He keeps this process going, using his $700 billion credit card. Buy for 60 cents on the dollar, sell for 30 cents on the dollar. Buy for 80 cents on the dollar, sell for 5 cents on the dollar. He’s in charge.
$700 billion folks IS JUST THE LINE OF CREDIT. He can purchase trillions and trillions of bad debt with this credit card, as long as only $700 billion is OUTSTANDING at any one time.
2) Hank Paulson, CEO of Goldman Sachs on leave, has complete and total control over the nation’s treasure. He would be unchecked by Congress, unchecked by the President. He will be king. Here’s the text:
“The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation”
Using this power, Hank Paulson of Goldman Sachs could pay Goldman Sachs anything he wanted for their mortgage assets. Let’s say the market value was 20 cents on the dollar. Hank Paulson could pay them 100 cents on the dollar. Its his decision and his alone. No oversight. No limitations. Hank Paulson could simply give the nation’s treasure to Goldman Sachs.
Get it now?
3) Deputizing the banks and investment banks as “agents of the government”. Seriously. Here’s the text:
“Designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them”
4) Have no outside control over the firesale of assets and loss to the taxpayer. Again, Hank Paulson and Hank Paulson alone shall be in control. No auditors. No oversight. No multiple bids. No nothing. Hank Paulson and Hank Paulson alone. Here you go:
“Sale of Mortgage-Related Assets. The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.”
5) Hank Paulson has final say. Hank Paulson knows what’s best. Hank Paulson cannot be reversed. Hank Paulson cannot be sued. Hank Paulson is king.
“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”
So, what can you do? Normally here I’d say contact your corrupt Congressman or Senator. Contact the media. But folks, Congress has been bought. The media have been bought.
The American people have lost.
Deal with it.
Somebody help me out. If it’s truly a $700bn line of credit, doesn’t that mean that he’s limited to having $700bn outstanding, and in order to spend more, he must first pay some back, thus keeping the total ever spent limited to $700bn? (If I have a $1000 line of credit, I can spend a thousand, then pay back $500, then spend $500 again; that doesn’t mean I’ve spent $1500 of the credit, because it’s the net that counts, i.e., the spending minus the paying-back, not simply what I’ve spent.) That’s how lines of credit work, and other than this guy’s say so, I don’t see that there’s any provision that allows more than $700bn NET to be spent, according to what he’s quoted, at least.
In short, I think he’s way off, at least with his claim that that provision allows them to spend “trillions and trillions”. They MAY spend trillions and trillions, but not if they adhere to that provision.
Speaking of “best laid plans”….Goldman Sachs and Morgan Stanley suddenly decided they really want to be commercial banks!
Of course it isn’t like they’d never considered that before. It’s just that they knew as long as the game was being played fast and loose, it good to be a prime broker — acting outside the banking-bureaucracy surveillance and red-tape. But of course once the house of cards started to tumble, well, being a Bank brings BIG taxpayer bail-out privileges!
On a side-note, I firmly sense that our culture CAN transform into something better without a violent revolution against government. But I’ve recently become aware of fairly ordinary people wondering out loud whether or not it’s possible to save our society without purposeful reaction against the individuals heading these major multi-national corporations fronting the whole ponzi-scheme. They’re not just railing against the Wal-Marts and drug companies and insurance firms, and such, but rather they’re starting to identify the gov-bankers, the ag-industry criminals, the warfare-promotion clans and such like. I think more and more people are getting wise to the nature of evil in the world.
And I undoubtedly should mention that I’m not talking about people wanting to do actual personal violence. Rather tha, in general, people seem to be becoming more sophisticated in identifying the individuals who head such corporations as being part of the problem in the world. And that the rapidly emerging culture that seeks greater social & personal responsibility is beginning to feel it’s strength, and is starting to say “you uber-idiots may hold the cards now, but very soon you’ll find you’re pariahs in the transforming world culture”. It’s certainly a lesson thousands of years old: greatness is fleeting, and even Ozymandias, “King of Kings” was relegated to the dustbin of history.
Of course, the only incentive that matters is whether it happens during one’s lifetime or not.
I wouldn’t conclude with the article that “the American people have lost.” I’d say, in all honesty and without an ounce of sentimentality, that the American spirit is just (barely) beginning to glow once again.
Funny…the Universe just handed me a case in point…I just now ran across this commentary at Bloomberg:
Let’s Start by Finding Some People to Behead: Michael Lewis
So the greedy, stupid bankers who ruined this country’s economy are rewarded by being given said economy as if it were a big ol’ birthday cake complete with lit candles and clueless parents singing “Happy Birthday”. And no doubt gobs and gobs of funnee munnee will have to be printed up to pay for this brilliant little plan.
Wow. Iran-style fundamentalist theocracy, here we come!
It would seem, with so many institutions on the ropes, an ideal time to deliver a knock-out blow in the form of a bloodless economic revolution centered around the phrase “If you want change, keep it in your pocket”.
First a bank run, for those with any savings. Then, buy supplies in bulk to last six months to a year and convert any remaining funds to tangible assets. Finally, hunker down and live as simply as possible while everything comes crashing down.
Thank god for that income tax exemption for foreign residents. Of course, how long before they revoke that…