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Paul Kiesel
Paul Kiesel
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32 Problems with the Wall Street Bailout

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Actually, there may be more or less than 32 problems with Bush’s Wall Street Bailout proposal, but there is no greater problem than the 32 words present in Section 8 of the Bush Administration’s legislation.

Section 8: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Based on the track record of the Bush Administration (9/11, Afghanistan, Iraq, Hurricane Katrina, the events that led up to Wall Street’s demise, past proposals to privatize social security, etc., etc.), to not question their authority or provide oversight to how the billions are spent by Treasury Secretary Paulson (or the Economic Czar that Bush proposes; Section 8 also cites “unfettered authority” that would be given to Paulson), or to review the decisions made by the ones in charge of this bailout, would be as irresponsible as the Wall Street CEOs who acted like Tom Cruise’s character, Joel Goodsen, from Risky Business when his parents left town, the moment Phil Gramm, John McCain and their buddies provided and voted on the legislation that deregulated the banking and lending industries.

Section 8, as it is currently written (this could be revised after Congress reviews the proposed bill and adds its provisions), is one of the more transformative sentences of economic policy in U.S. history. It transfers a significant amount of power to the Executive Branch, while occluding any possibility for oversight, and offering no guarantees in return. This is amazing considering the fact that Bush was explicit in his speech last Friday morning, when he discussed the need for more transparency and more oversight throughout Wall Street. All Section 8 does, and reaffirms, is that the Bush Administration, in this version of the bailout plan, wants nothing to do with transparency, and wants to have uncontested control of how the $700,000,000,000 bailout funds are dispersed before the administration comes to a wheezing halt on January 20, 2009.

However, over in the Senate, Democratic Connecticut Senator Chris Dodd is coming up with a bailout bill of his own. Dodd’s bill does not include anything similar to Section 8.