CT Blue

The bad thing about being an evening blogger, particularly when things are moving fast, is that all the good observations are made before you get a chance to get in front of the keyboard.

This is doubly so in the case of the bailout, because of the looking-glass nature of what’s going on out there. So, while it has been said already, let me make an observation that occurred to me when I heard on NPR that Paulson doesn’t want the plan to limit executive compensation because that might discourage some firms from allowing themselves to be bailed out: If they don’t want to jeopardize their bonuses, then they don’t need our money.

Or here’s another, also made elsewhere. Paulson actually had the nerve to say that he didn’t include an oversight provision in his bill because it would have been presumptuous of him to suggest an oversight mechanism. No, actually here’s presumption:

Section 8. Review: 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.

And, via Suburban Guerilla, we have David Cay Johnston’s observation that the basic premise of the bailout-that we are staring at Armageddon, does not necessarily reflect reality. It’s a little hard to believe that any American Administration would orchestrate the world’s biggest scam as it walked out the door, but this is the Bush Administration. It is entirely possible that this is just a scheme to spread more money to the people who already have too much.

Our Emperor is getting more naked by the minute.

By the way, my problem with originality could be easily solved if I could do this full time. Then I’d be firstest with the mostest. All it would take is a massive infusion of cash, and I could quit my day job. I will be glad to pledge in advance that I will not pay myself a massive bonus, should Paulson feel like throwing a tiny amount of that money my way. All I’m asking is for .0001428571428571 % of the bailout funds, a measly 1 million (I think my math is right), mere chaff, and I can make this a full time endeavor and keep the economy going.

You truly couldn’t make this stuff up. (Via Americablog, via Naked Capitalism, via the UK Times Online:

STAFF at Lehman’s New York office who helped to cause the world’s biggest corporate bankruptcy are to share in a $2.5 billion bonanza.

The bonus, which has been described by London staff as a “scandal” has been pledged by Barclays Capital, the British-based bank that last week acquired Lehman’s American operation and took on 10,000 staff.

The money has been “ring fenced”, which I assume means it has been somehow legally exempted from the reach of creditors. Apparently Price Waterhouse is not happy about this little bit of high finance, since it advanced over 4 billion to Lehman just hours before it failed, and would like to know why Barclay’s will be paying big bonuses instead of repaying creditors.

This is a taste of what we will be reading in the months to come. As we plunk taxpayer money down to bail out these geniuses, they will be paying themselves big bonuses, and folks like Paulson will be telling us that they are absolutely necessary if our free market system is to function.

The full quote is “Those who cannot learn from history are doomed to repeat it”. That aphorism should be much on the mind of folks like Chris Dodd. Here is the history. The Bush Administration screws something up big time or is caught breaking the law. Its response is to ask Congress to give it more power (and in the case of the crimes, immunize its prior acts). It is always absolutely necessary that Congress act immediately, preferably before actually reading whatever it is that Bush wants passed. Any attempts to change or even examine the Bush proposal becomes a grave threat to national security. The answer to every crisis is to give Bush what he wants, and to get out of the way while the people who caused the problem, and who are therefore by definition the only ones who can fix it, exercise yet more power and, in the end, cause yet more problems.

While I don’t doubt that something needs to be done about the current fiscal crisis, the rush to legislate a solution appears to be partaking of all the classic signs of the Bush squeeze. Dodd appears to be wary, but don’t be surprised if he gets rolled when the Bushies declare that any attempt to help real people will cause a delay that will bring on an economic Armageddon. Don’t be surprised if at the same time that claim is being made, Bush contradicts its essence by threatening to veto any measure that helps homeowners. They will want to keep this pure-a bailout by the American taxpayers for the rich and only for the rich. Remember too, these folks are all politics, all the time, and they won’t want to give the Democrats the ability to show what they can do for the middle class. So we’ll be hearing soon that quick, unthinking acquiescence is necessary in order to avoid certain doom.

UPDATE: Step One is in place. Bush requesting unfettered authority.

UPDATE 2: The plan sucks and does indeed amount to a gift to the banks. What else is new? Prediction: This won’t stop the Democrats from falling in line.

UPDATE #3: viz, “they will want to keep this pure-a bailout by the American taxpayers for the rich and only for the rich”, Paulson says that reining in executive compensation is a poison pill. Apparently he feels these folks have earned million dollar payouts for driving the country into financial chaos. See also.

UPDATE #4: viz, “So we’ll be hearing soon that quick, unthinking acquiescence is necessary in order to avoid certain doom”, see GOP warns Dems not to add extras to bailout bill. This is not the last we’ll hear of this. The Administration has yet to weigh in on this score, though their task may be complicated by McCain’s reluctance to sign off on what will be perceived as a massive giveaway until after the election.