The minute I heard the bailout plan had grown from 2 ˝ pages to 451 in the space of a week, I knew we were fucked. There’s the old saw about sausages and legislation, and how it takes a strong stomach to watch either being made, but it doesn’t even begin to cover those rare occasions where Congress just realizes they’ve hit an iceberg, and have one last chance to save the country while stealing from it with both hands. The stock market realized what had happened, too, and “celebrated” the passage and signing of the bill by crashing another 300 points in the next few minutes. Sigh. Well, it’s law now. You have the worst president in American history, combined with a Congress that is almost entirely corrupt and/or ineffectual, and not surprisingly, the new law is a monster. I’m cribbing the next two items from what for me is a rather unusual source: Declan McCullagh of CNET, or as it’s sometimes known, Conservative Net. They’re actual conservatives over there, as opposed to the fascists strutting around in the GOP who love to declare themselves conservatives, and thus don’t hate everything America stands for while waving the flag as hard as they can. According to Declan, here’s some of the things we just got: 1. Gives the Internal Revenue Service new authority to conduct undercover operations. Not against investment bankers or derivative traders. Against us. It gives the IRS authority to share tax information with local police, the FBI, Homeland Security, and the CIA. Again, this wouldn’t be used to track down huge multinational corporations who keep P.O. Boxes in remote islands to save millions in American taxes; this would be used to investigate the terrorist sympathies of anyone writing a letter to the editor calling his congressional rep a bum. 2. TARP, the Troubled Assets Relief Program has an interesting provision in it that allows banks to sell worthless mortgage notes to the government at a profit. So a bank sitting on $100 million in worthless mortgage-based derivatives can sell them to the government for $150 million, or whatever the government is willing to pay. The rationale is the extra money will make the banks that much more willing to extend liquidity to other banks, who will also have extra real assets now, thanks to the government. 3. As for those mortgage-backed derivatives, they are unlikely to ever have any value, since the government is not addressing doing anything to prevent the foreclosures looming over those mortgages which have made them worthless. No demands to renegotiate affordable rates for trapped homeowners, no moratorium on foreclosures, not even any rules preventing more predatory mortgages from being issued. This, in turn, assures that we’ve just thrown all that money down a rathole, while ensuring that bankers will be motivated to dig that rat hole even deeper. In effect, we’re paying people to shoplift. While paying the stores to make it easy to shoplift. In hopes of increasing economic activity. (Note: there is a Treasury “guarantee” on home loans, but it kicks in about six months after a bank would normally have foreclosed). 4. They addressed the issue of outrageous compensation for officers of failed corporations by declaring that the Treasury Secretary should determine unilaterally, and on a case-by-case basis, what an appropriate payout should be. That would be former Goldman-Sachs CEO Henry Paulson, who got $250 million for leaving Goldman Sachs a couple of years ago. Boy, is his dance card going to be full! There is one weird loophole in which a CEO may be limited to a cruddy $500,000 in his final year, and that’s if he convinces the government to shell out $300 million or more for whatever worthless notes he has to unload on them. 5. The bill has more shit in it than a Christmas goose. At least 122 Congressmen were allowed to add earmarks for various pet projects. Now, earmarks aren’t necessarily a bad thing; often as not, it represents an infusion of federal money into a struggling district that revitalizes a community. And a lot of green funding provisions that the Putsch Junta had fought for years made it in. Contrary to popular opinion, the reps are supposed to represent their districts, not the country. But Congress clamped down on them last year, and so if they are being put in now, under emergency rush conditions, it’s likely that they are provisions that would never have passed on their own. Some of them are just goofy. For instance, one provision ends a 39 cent excise tax on wooden toy arrows. It isn’t the sort of thing that’s going to affect revenue a whole lot, and I very much doubt it will have any significant affect on the sale of toy arrows, but some asshole Congresscritter thought it was worth putting the world economy at risk while he slipped that in. In this particular instance, BOTH Oregon Senators were in on it. I had no idea the toy arrow industry was such a Player in Oregon. A two year extension on a tax code stipulation means a $20 million windfall for auto racetrack owners. Maybe it was that or start selling ad space on their foreheads. They allocated nearly a thousand times as much – $19 billion – to research credit. Some of it will go to poor, impoverished Microsoft, in hopes they can build a functioning operating system. Some goes to Harley-Davidson. I admit to being curious as to what they research. Most goes to the usual outfits that have been sucking on the public teat for decades. I’m all for research, and believe it always pays off in one way or another, but the whole military-industrial complex is so corrupt these days I doubt much of that money will go to any actual research. One of the bigger provisions – and in my opinion, a good one – was funding for PILT, which, despite the sponsorship of Larry Craig, has nothing to do with fake neolithic skeletons. Payment In Lieu of Taxes, in a nutshell, replaces funding to counties that the timber industry had provided since 1908. I live in a county that was devastated by the decline in timber revenues, and am delighted that schools, roads and infrastructure will be getting funding in ways that don’t involve empowering people who want to take out our forests. There’s nearly a half billion in tax breaks for companies to film movies in the US, rather than Vancouver BC or Toronto, that are supposed to be actually taking place in Chicago, New York, and even Los Angeles. This is a blow to Canadian manufacturers of fake palm trees, but we’re all in this together, right? One of the more revolting ones – and it almost certainly involves Nancy Pelosi – is a $33 million tax credit for companies operating in the American slave colony of Samoa. There, companies are allowed to abuse employees, paying as little as a dollar a day and even using them as sex slaves, and then proudly stamp “made in America” on the slave-labor garments. “American” tuna comes from there relieved of the burdens of environmental and employee protection laws. However, the worst thing about this bill is that it will take at least a month to start infusing the banks with liquidity, easing the credit freeze, and if economists and frenzied Treasury Secretaries are to be believed, we don’t HAVE a month. The economy is grinding to a halt right now, and they skipped all the steps that could have had an immediate effect, such as a foreclosure moratorium or even an immediate backing on bank loans made to good banking specifications. So with $700 billion gambled, there simply isn’t anything in the bill to prevent a crash and a huge depression for at least a month. We all hope against hope that it works. But don’t bet your life savings on it. Ooops. Too late. You already are, whether you meant to or not.
Bailout type Cost to taxpayers (Source: Reuters) Financial bailout package approved this week up to or more than $700 billion Bear Stearns financing $29 billion Fannie Mae and Freddie Mac nationalization $200 billion AIG loan and nationalization $85 billion Federal Housing Administration housing rescue bill $300 billion Mortgage community grants $4 billion JPMorgan Chase repayments $87 billion Loans to banks via Fed's Term Auction Facility $200 billion+ Loans from Depression-era Exchange Stabilization Fund $50 billion Purchases of mortgage securities by Fannie Mae and Freddie Mac $144 billion POSSIBLE TOTAL $1.8 trillion+ NUMBER OF HOUSEHOLDS PER U.S. CENSUS 105,480,101 POSSIBLE COST PER HOUSEHOLD $17,064+
