Skip to main content

View Diary: Wall St. Bailout: Exec Pay Limits 'Effectively Repealed' By WH (170 comments)

Comment Preferences

  •  way past time for marches (9+ / 0-)

    Now is the time for the Trials to begin, screw the marches.

    President Theodore Roosevelt,"No man can take part in the torture of a human being without having his own moral nature permanently lowered."

    by SmileySam on Mon Dec 15, 2008 at 10:23:01 AM PST

    [ Parent ]

    •  But how do you indite (0+ / 0-)

      when some of the guilty and complicit are still in office, won't they obstruct? They seem to be good at that.

      Ignorance is natural. Stupidity takes commitment. --Solomon Short

      by potty p on Mon Dec 15, 2008 at 10:58:26 AM PST

      [ Parent ]

    •  Why not revisit the legislation? (2+ / 0-)
      Recommended by:
      vacantlook, Into The Woods

      I do not understand why Congress cannot just revisist the legislation and correct any such loopholes or deficiencies. Because this sure stinks. Big time.

      We need to hear more liberal voices saying, "No more business as usual." Bush's silence on this is notable. But we have a Democratic Congress! C'mon!

      This is a betrayal beyond words.

      If Democracy for America is looking for a new role to play, and a new agenda, I am hoping they will consider the policing of the bailout as their next major undertaking -- naming names and holding feet to the fire.

      •  Dem Leaders Knew It Would Not Apply (0+ / 0-)

        Because before TARP passed, they all knew there would likely be little "TA" in TARP.  So did the Treasury/Bush administration.  

        So when this "loophole" was included, they knew it would be an exception that would probably eat the rule.

        If the "at auction" had been left out, they still might have been able to apply it because the term "troubled assets" has been interpreted to include all kinds of things (which is also how we know they all knew what they were going to buy and to what the compensation limits would apply and to what (and whom) those limits would not apply.)

        The Democratic leadership, including specifically Rep. Frank, knew on or before October 3 that the direct purchase of troubled (toxic assets in the form of commercial paper)  was not the only and potentially not even the primary mechanism that would be used under TARP.

        We know that because on October 3, "legislative intent" was intentionally created by Rep. Frank and Rep. Jim Moran to support an interpretation of "assets" that allowed for the injection of capital into these financial institutions.

        Nouriel Roubini at RGE Monitor was posting about it on October 9:

        How authorization to recapitalize banks via public capital injections ("partial nationalization") was introduced - indirectly through the back door - into the TARP legislation

        In other terms it was necessary to explicitly clarify that the definition of "assets" or "any other financial instrument" in the legislation did allow for such public injection of capital so as to ensure that the regulations following the legislation would allow for such interpretation and actual practice. Since it was too late – by Wednesday last week - to explicitly modify the legislation to allow for explicit wording on this matter and since Treasury was resisting such late explicit changes (that would have jolted the banking industry) the tool that was used (in full agreement with the House and Senate leadership) to allow for such interpretation was to have Representative Jim Moran use the October 3rd House floor debate right before the final vote to put on the legislative record such interpretation. See the following important exchange between Jim Moran and Barney Frank that is now on the legislative record of the House:

        Mr. MORAN of Virginia. Thank you, Madam Speaker. I won't take that much time. I do want to thank the chairman for his masterful leadership on this bill, and I do want to clarify that the intent of this legislation is to authorize the Treasury Department to strengthen credit markets by infusing capital into weak institutions in two ways: By buying their stock, debt, or other capital instruments; and, two, by purchasing bad assets from the institutions, in coordination with existing regulatory agencies and their responsibilities under this legislation, as well as under already existing authorization for prompt, corrective action and leastcost resolution.

        Mr. FRANK of Massachusetts. Will the gentleman yield?

        Mr. MORAN of Virginia. I'd be happy to yield.

        Mr. FRANK of Massachusetts. I can affirm that. As the gentleman knows, the Treasury Department is in agreement with this, and we should be clear, this is one of the things that this House and the Senate added to the bill, the authority to buy equity. It is not simply buying up the assets, it is to buy equity, and to buy equity in a way that the Federal Government will able to benefit if there is an appreciation.

        So Moran asks Frank to clarify that the explicit intent of the legislation is to allow the purchase of bank liabilities (stock, debt, or other capital instruments) not just assets; and Frank replies firmly that this is the case and that Treasury agrees with such interpretation. Done!

        To see how to read the complete article and other related articles go here:

        Remember Addie Polk. We, as a Country, are not what we say, but what we do.

        by Into The Woods on Mon Dec 15, 2008 at 01:47:23 PM PST

        [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site