Monday, April 07, 2008

Yet Another Bush Power-Grab

[Cross-posted from People First Politics]

Treasury Secretary Henry Paulson

It seems the recent recognition by Wall street's overzealous speculators that the nation is in deep recession (something they've ignored for years despite it being a regular big deal out amongst the real people who do real work when they can find it) has led to yet another opportunity for the Bush Administration to make an unprecedented power-grab. And predictably, they've leapt at the chance.

From the New York Times:

The Bush administration on Monday rolled out the broadest overhaul of Wall Street regulation since the Great Depression, presenting a series of proposals that would, for the first time, create a set of federal regulators with authority over all players in the financial system.

But the proposal will do almost nothing to regulate the alphabet soup of sophisticated financial products that have fueled the current financial crisis. And it will not rein in practices that have been linked to the mortgage crisis, like packaging risky loans into securities carrying the highest ratings.

[Emphasis mine] Well. There you have it. The overwhelming greed of the financial sector has led to serious financial troubles, so the Bushies want to claim more power while at the same time doing nothing at all about the greed that will by summer (if projections are correct) have millions of hard working Americans homeless in the streets.

Don't be fooled. The administration was seriously at work on this power grab last year, well before the current crisis. They have just seized upon the current crisis - that had the Federal Reserve (NOT a government agency) bailing out a bankrupt Wall Street investment bank in an unprecedented action just weeks ago - as a good excuse to put the plan into action.

What the plan does is make legal actions such as what the Fed did for Bear Stearns, offering to back 30 billion dollars' worth of bad debt in their portfolio in order to enable JP Morgan to purchase the bank for pennies on the dollar. Additionally, the plan aims to 'merge' the Securities and Exchange Commission with the Commodity Futures Trading Commission (the already existing ineffectual and lazy federal regulators of Wall Street) and de-regulating both. In other words, turning over regulation and oversight of the financial markets to the financial markets!

This should work as well as the FDA allowing drug companies to regulate themselves, genetic engineers to decide what is safe for the world to eat, letting the Chinese decide to poison pet food and use lead paint in cheap toys, and allowing nuclear power plants to determine their own safety regulations. Doesn't that make us all feel much better about how much government cares for the citizenry that always gets screwed by Big Business?

The overhaul will simply put American taxpayer's money at risk for the financial markets to use and abuse as they see fit. If they make money, it goes into private pockets. If they lose money, We the People bail them out.

The administration expects a long fight in Congress in getting their plot approved into law, but fully expects the next administration - whether Republican or Democrat - to go along because it's such a great idea. It might actually be approved, given how many regular citizens' retirement savings have been decimated by the recent 'liquidation'. The players get bailed out, citizens will have to live on much less than they saved.

Keep a close eye on this one, as it could send the entire system into default and eradicate the dollar as a benchmark for world markets. The welfare of the American people has no role to play in this farce. Hyperinflation is a real danger (on top of massive homelessness), and not just for the price of gasoline to fuel the cars families will be living in. The food we need in order to live at all is quickly becoming unaffordable due to commodity speculation - there are already food riots in Asia over the price of rice, which isn't rising as fast as the price of wheat or corn.

It's time for Victory Gardens and a return to doing for ourselves. In the end - if we come out the other side at all and this isn't just more right-wing attempts to bring Armageddon - it may have taught the current generations valuable lessons.

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