Remember this little gem?
That’s not the way the world really works anymore," he continued. "We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — judiciously, as you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.
-unnamed Bush administration official (a.k.a. Karl Rove)
and this one too...
Oops, I did it again
-Brittney Spears
So let me get this straight. We have an administration, literally marinating in the highest disapproval ratings in history, with a long and storied history of drumming up hysteria about weapons of mass destruction, manipulating homeland security threat levels, and without any moral compunction whatsoever about lying to anyone in order to get their way.
This administration has politicized the department of justice, refused to acknowledge the authority of its coequal branch of government, given massive tax breaks to the rich (you know, his 'base'), and pressed hard for deregulating anything that resembled a corporate interest(also see here and a general review here).
The Bush administration has time and time again employed what Naom1 Klein has called "The Shock Doctrine" as a strategy in both domestic politics and of course, war.
This administration now cries fire yet again, in a crowded theater full of people literally weakened and weary of the loss of income, jobs, and savings over the past seven years. They say, it is an urgent crisis, and something must be done yesterday or the sky will surely fall!
And lo, the sky parted and standing on a hill in front of a burning bush stands a disciple of Bush holding three stone tablets containing the salvation of the 'American way of life (TM)'.
Now all those who have seen their 401k's shrink under the Bush administration's expert tutelage, as if by pavlovian cue, are now running around screaming 'the sky is falling the sky is falling'. And now let me say, it might very well fall some time in the near future, but it hasn't hit my head just yet, so I must point out a few facts.
First of all, this thing did NOT happen overnight. The Bush administration has been working on their plan for three months now, all the while downplaying the existence of any crisis.
And where did the specific figure of 700 billion come from? Forbes magazine tells us someone pulled it from their ass:
In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.
"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."
And remember the whole drama over the House's negotiations with the Bush administration last week? How the Bushies 'caved' and allowed limits on CEO compensation/golden parachutes, the splitting up of the total into 'tranches', and assuring us that Treasury would pay well below-market prices for the toxic Wall Street paper?
There apparently was a conference call Sunday night (the night before the first House vote) initiated by someone in the Treasury department to discuss the finer points of the final bill. This call was apparently not intended for the general public or reporters. Naked Capitalism has the details.
There is a live blogging recap at DealBreaker. Someone who was on the call is going over his notes and other recaps on the Web and sending me his version, which I hope will add some color. Check back for that update.
Here are the notes promised. Calculated Risk had put up the conference call number. so some of this is the listener's notes, some are hoisted from CR. They are admittedly skeletal at points, but track and enhance the live blogging report at DealBreaker. You can download a torrent for the call here, which I intend to do post haste and will amend the post accordingly. I've included the long form notes below, but some items jump out:
- The tranching is a mere formality, and the Treasury boys as much as said so. They could take the $700 billion max as soon as the bill has passed,
- However, they do not plan any action immediately, will wait a couple of weeks. They want to focus their efforts on stronger companies but also made noise about protecting the financial system. This, by the way, is the Japanese convoy system all over.
- There seemed to be a lot of tap dancing about what price they will pay for assets and no straight answer about their policy on warrants. They did say that if the amount sold was greater than $100 million, they would take warrants. FYI, the current draft allows them to pay up to the price at which the assets were initially booked (yikes) . I wonder if this is obfuscation, if they have an idea of what the plan to do but will not admit it in any public forum.
- As the person who listened to the call stressed, DealBreaker wasn't clear on the bifurcated process. If you come to the Treasury and you are in trouble, you get reamed. Bear/AIG style treatment, execs probably fired. But if you participate on a voluntary basis, the intent is to make it very user friendly. That is consistent with Paulson's position during the negotiations.
- The exec comp provisions sound like a joke, They DO NOT affect existing contracts, they affect only contracts entered into during the two years of the authority of this program and then affect only golden parachutes. More detail on that point, but I don't need more detail to get the drift of the gist.
[The emphasis here is purely mine]
So apparently nearly everything that was put into the original House bill to placate the Democrats was bullshit. You call that negotiating in good faith? I am not saying that there isn't a crisis brewing on the horizon. What I am saying is that, under no circumstances, can the Bush administration be trusted to be dealing from the top of the deck. They can not be trusted.
I do not believe that the premise of the Paulson plan is the way to go. If the problem is a credit crunch, why not recapitalize the Banks, or start another Federalized Loan corporation. Why is it that the only plan that can be debated is the one handed to us by the crooks that we should know better than to trust for anything? What have we to gain by stifling debate, in a 'My way or the highway' type situation?
Every bone in my body says there is something amiss here. This whole thing seems to me like a Ponzi scheme.
Calgon take me away....