For this first time I’m attempting to read government legislature unabridged, raw, and not spoon fed me by any media network. It’s difficult, because the way such bills are written, to me, leaves a lot to the imagination in the form of loopholes, backdoors, and interpretation. Furthermore, although I’m a novice, I get the distinct impression that the signed version fo the Emergency Economic Stabilization Act H.R. 1424 wreaks of lobbyist intervention. Specifically I’ve been intrigued by Sec. 101 and the authority it gives to the Secretary.
Sec. 101 of the Emergency Economic Stabilization Act gives authority to the Secretary to establish a Troubled Asset Relief Program, otherwise known as TARP. This program gives the Secretary the power to purchase ANY troubled assets from a financial institution as long as it meets certain terms and conditions. These terms and conditions are not made by an outside board or even covered in detail within the bill, but rather set by the Secretary. Also, it’s specifically stated that the terms that are set by the legislature are not meant to delay the commencement of TARP in any way. Is this the meat of the bail out?
(c) Necessary Actions- The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation, the following:
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(1) The Secretary shall have direct hiring authority with respect to the appointment of employees to administer this Act.
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(2) Entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code.
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(3) Designating financial institutions as financial agents of the Federal Government, and such institutions shall perform all such reasonable duties related to this Act as financial agents of the Federal Government as may be required.
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(4) In order to provide the Secretary with the flexibility to manage troubled assets in a manner designed to minimize cost to the taxpayers, establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase, hold, and sell troubled assets and issue obligations.
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(5) Issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities or purposes of this Act.
It would appear to me that H.R. 1424 was passed in a rush so that no other legislature will have to be voted on to move forward. Meaning, this is not just a one time bailout, but authorization to the Secretary to bailout whomever they wish, whenever they wish, without, in my eyes, proper moderation.
Now there is plenty of flowery talk within this Act, which frankly I didn’t think existed. For example, laced throughout this Act are reminders that any troubled assets purchased under TARP should be handled with the following in mind.
- the taxpayers.
- providing stability and preventing disruption to financial markets.
- help families keep their homes.
- protect American jobs.
How the hell is buying BAD debt doing any of the previous mentioned statements? I do my best on a daily basis to manage my own risk and now the US Government is giving power to the Secretary to manage risk for me. BUYING UP BAD DEBT WILLY NILLY IS NOT PROPER RISK MANAGEMENT AND IS WHAT GOT US HERE IN THE FIRST PLACE.
TARP represents a golden parachute for an unlimited number of corporations and financial institutions without regard to actual taxpayer risk management. The establishment of TARP itself removes any need for democracy in the future for bailouts. How does such an Act get passed when just days later a similar version of the bill was voted out? Is there more to the story that our government is not telling us?
