Tag Archives: Congress

We got ripped off, so let’s do it again

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The proposed auto industry rescue is phase I of part II of the big rip-off.

After years of letting the Bush administration to push through terrible legislation and start a war by using fear and forecasts of fictional dire consequences for not doing what he wanted, Congress did it again with the $700 billion financial services bailout.

After realizing that Treasure Secretary Henry Paulson and buddies from Goldman-Sachs didn’t really know what they were doing and weren’t doing what they said they would, Congress finally got smart: now our august representatives are going allow the auto industry to rip us off for much less.

At first.

The real bill will come later, after Congress has committed to paying it through this unscrutinized, details-later bad idea of a bailout.

Want to rescue the auto industry? The merits of that can be debated from here to Toyota. But it is just totally crazy to agree to a $35 billion bailout, with conditions the automakers must meet to come later, knowing that the $35 billion is just a down payment on an unquantified much, much larger amount that may not be enough to provide the salvation the auto executives seek anyway.

Bailout blues

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It’s odd, isn’t it, how the bailout kept expanding — first the government was going to buy mortgage debt, now it is going to buy just about any distressed financial instrument — but the price tag never budged above that $700 billion. Somebody isn’t playing straight with us.

Now a deal is near (again) so our elected Congress people can come home and tell us what a good job they did on our behalf. The deal isn’t done, though. According to the New York Times:

Among the last sticking points was an unexpected and bitter fight over how to pay for any losses that taxpayers may experience after distressed debt has been purchased and resold.

Democrats had pushed for a fee on securities transactions, essentially a tax on financial firms, saying it was fitting that they contribute to the cost.

In the end, lawmakers and the administration opted to leave the decision to the next president, who must present a proposal to Congress to pay for any losses.

What a shameful cop-out.