Hidden in an article in The Hill about Cheney going to the Capitol Hill to pressure passage of the bailout bill is an important admission by Deputy White House Press Secretary Tony Fratto:
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but but he said this should be enough." http://www.rollcall.com/news/28599-1.html?type=printer_friendly
This smells like a scam to me. If they thought they needed this contingency plan, why didn't they do something to prevent it all instead of waiting until it was late enough to roll out this "contingency plan" which -- this being the Bush administration -- was probably largely written by the Wall Street hot shots who will benefit from it's bailout, free pass, no oversight, no accountability, no loss of CEO megabonuses terms.
And how much worse did it get while they dithered with the crafting of this contingency plan? And what else do we not know yet about this? What does Paulson stand to gain personally out of this? Important Democrats seem to respect him, but nobody should be entrusted with that much money, without oversight or review, and without even any strict operating guidelines.
He made megamillions himself as an investment banker and deal maker. Surely he didn't sever all those connections. And he will probably go back there when Bush leaves office and his replacement is picked.
Two important sources for this idea: http://1boringoldman.com and http://emptywheel.firedoglake.com/2008/09/23/bush-mouthpiece-admits-theyve-been-sitting-on-this-plan/
Ralph
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4 comments:
Ralph,
Good old W tried to fix this mess back in 2003. The vote broke down along party lines and failed.
You may not like what his proposed plan was (I did), but he did try something.
Jesse -- could you tell us what that was that W tried to do in 2003?
Sure, from an article in the NY Times on the topic:
"Under the plan, disclosed at a Congressional hearing today [Sept. 11, 2003], a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates. "
Enough said?
See my response in comments to "Foxes and henhouses."
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