Hank "in the Tank" Paulson and the Last Great Bushist Power Grab

The similarities to 9/11 are stark: pass the bill, now! This is not a time for thinking, it is a time for acting! Sadly, we fell for this line twice already. In the House, a meager 66 Representatives opposed HR 3162 (62 Democrats, 3 Republicans, 1 Independent; 9 didn't vote), what would become known as the USA Patriot Act of 2001. In the Senate, Russ Feingold (D-Iowa) stood alone in his opposition to the bill. The whole thing was pushed through Congress by 1:54 PM Eastern Standard Time, on October 25, 2001. Those who opposed the measure were branded "unpatriotic," "bleeding-hearts," or accused outright of being traitors. In doing so, the Bush Administration silenced those who saw this as a cynical power grab. A year later, having failed to capture Osama bin Laden, but with a new interloper to divert the attention of voters, Congress voted 296 to 133 to invade Iraq (81 Democrats helped; 6 Republicans and one Independent didn't). Russ Feingold was no longer alone in his opposition, as 25 other Democrats joined him in voting against the invasion of Iraq in the Senate, which has since been proven to be an unnecessary and costly war: over 4,000 dead, hundreds of billions spent, the United States' international reputation in tatters and the removal of military capital from the threat of a emerging belligerent powers, such as Iran, Syria, Venezuela, Bolivia and Russia.

Then, starting last Monday, the failure of several key financial institutions, resulting , at least in part, from deregulation, including the repeal of the Glass-Steagall Act of 1933. As with 9/11, people were hoping for someone to step forward to save the day. Treasury Secretary Henry M. Paulson's solution sounded a lot like a trick played by Dark Age mystics on a superstitious and ignorant populous during a total solar eclipse: "Grant me power without oversight, and I will bring back the economic sunshine." His proposal consisted of three pages - three pages, stark in their simplicity, horrifying in their cynicism and arrogance, summed up in the now infamous "Section 8" of the proposal:

Sec. 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.

It is perhaps an unintentional coincidence that Paulson and Federal Reserve Chairman, Benjamin Bernanke picked "Section 8," which was, at one time, the rule cited for discharging mentally unfit soldiers from the army. Indeed, the suggestion that the systemic collapse caused by deregulation could somehow be cured by an individual demanding more deregulation, is madness. It has even less rationale when one considers that this is the same, former CEO of Goldman Sachs who raised his company's debt from $20 billion to $100 billion in his 6-year tenure there. Finally, it has been reported that Paulson and Bernanke drafted this astonishingly elegant proposal six months ago, and hence, saw this collapse coming. Their concern, clearly, was not for the taxpayer or for how many innocent people would be hurt through this nightmare, but themselves and their friends and colleagues on Wall Street.

Well, I have a six point plan for what we can do about this mess. Review this, Bushies:

1) By purchasing bad debts, the United States taxpayer gains controlling interest in these firms. Those CEOs who opt out, risking the collapse of their firms will be required to surrender their passports, will undergo a criminal investigation, and may be subject to criminal prosecution and seizure of their personal assets; we do the same thing to drug dealers, embezzlers and child pornographers, and while I wouldn't place what they've done on the same plane as kiddie porn, I personally find it equal to embezzlement and worse than selling drugs. Those who opt in would be given immunity from criminal prosecution. That's their incentive for helping to keep the economy from crashing: they won't go to jail.

2) All executives suspected of having a role in the banking collapse must surrender their passports until they are cleared; those who opt in that are found to be instrumental in the banking collapse will be terminated with no additional compensation (no golden parachutes). Because the taxpayer has essentially enacted a hostile takeover, any contracts between executives and the firms they were employed by are null and void. They get nothing; they can stand in the unemployment line next to the people they sold out.

3) Absolutely no quarter should be given to the housing speculators who drove the housing bubble. If there were a cost-effective way to do so, I would ask for a mandate making them wear a scarlet letter ("A" for asshole).

4) A moratorium should be declared and defaulted home loans should be evaluated. Those home buyers who clearly have no visible means of paying for their homes, or whose homes are clearly beyond their means, should be foreclosed upon. Those who are in affordable homes should have their loans refinanced so that as much money as possible can be recovered. The United States will recover money from the sale of foreclosed homes at fair market value, only. These properties should not be auctioned off or sold at any discounted rate. This will prevent further damage from speculators.

5) All firms participating in the bailout agree to a similar, best-effort financing agreement offered to responsible, but troubled home buyers. In other words, the companies that caused this mess will ultimately have to pay for their mistakes in the years to come. They will be responsible for paying back the amounts of money that the government is short from housing sales and loan payments. There is no reason that the United States should give away the store without getting something back. Agreement to such terms - along with contractual obligations of transparency - could be offered as a condition for some executives to continue their employment in certain cases.

6) The regulatory boards that were gutted by the Reagan, Bush and Bush Administrations will be funded by the payments from the firms participating in the bailouts. There should be additional oversight by Congress to make sure that the regulatory agencies don't wind up in the pocket of the firms they regulate.

If my plan sounds punitive, good: it's humane, compared to what I would do, were I not an employee in a large firm with payroll expenses exceeding $100,000. Were that the case, I would say, let the banks fail and put their CEOs in prison next to rapists, murderers and drug dealers. Secretary Paulson's proposal was a naked power grab by an administration already grotesquely bloated on them. Once again, the Bushists have presented us with a crisis and told us that if we do not act against our own best interests, we are doomed. Fool us once, shame on you; fool us twice, shame on us; fool us a third time and clearly, we are too stupid for the responsibilities necessary to be a citizen of this, or any other Republic.