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The Paulson Power Grab: Dangerous For Today, Terrifying For Tomorrow

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"Section 8. Review. 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."

Breathtaking in its scope, isn’t it? This is what the White House wants us to accept as “necessary” in order to solve a problem it technically didn’t create (though its “friends” sure helped) over the past eight years.

As catastrophic as this meltdown is, what is most disturbing is not the question of what Paulson will do with $700,000,000,000 — it is the fact that those in power feel comfortable enough in their hubris to expect us to accept this unprecedented grab for raw power.

What precedent? The one above, which generally is asking the other two branches of the government to, in effect, throw out the Constitutional assumption of non-delegation.

Each branch of the government is – by the very nature of its purpose – not allowed to “sign over” its central function to the other two branches. What is being “asked for” by Paulson and the Bush administration is, in essence, this: Legislative, Judicial, you are no longer allowed to carry out your primary purpose mandated to you by the United States Constitution.

In the past eight years we have seen a tremendous erosion of our rights. There was some hope with the last election that the PATRIOT Act would be severely curtailed – portions of it at least – but that didn’t happen. In combination with this, we’ve seen our rights as members of this “economic” society also greatly diminished.

Indeed, what’s happened in the past 72 hours is frighteningly reminiscent of the horrors pointed out in Naomi Klein’s bestseller, The Shock Doctrine. Granted Milton Friedman wasn’t here for the final crash of the wrecking ball into the now dilapidated edifice of what once was the greatest economy in the world.

But then he didn’t need to be. His acolytes now control virtually every facet of corporate America and the federal government.

President Roosevelt, in his 1936 acceptance speech before the Democratic Convention, warned Americans, in no uncertain terms, against a clearly emerging threat to both their freedom and way of life. His term for them was economic “royalists”. These royalists, the President said, were (for the moment) content to allow the average Joe and Jane American retain their Bill of Rights, just so long as they would allow themselves to become enslaved economically. But, as the President announced, one is no more “free” if his economic “rights” are taken from him than if he were stripped of his Bill of Rights.

I urge everyone to read this extraordinary speech. There isn’t a politician alive today, nor has their been one in the past 40 years, who would have the political guts to say what President Roosevelt said there that day.

Now we are seeing the wholesale stripping of these rights, political and economic.

The men and women of this country have lost their ability to make a decent living. Only 12% of our economy is devoted to manufacturing, while 21% is devoted to the financial sector. Most the rest is taken up by the euphemistically titled “service” sector. Real wage growth stopped years ago. Median income, which is the only rational way to measure income growth, has gone down. A two-income family long ago stopped being a luxury and became a necessity.

The one last piece of the American Pie left us was the possibility to own a home. Now that’s being ripped away from us, too. So this is a perfect time – while we’re all in SHOCK – for the thieves, as they finish stealing the silver, to also ask us for the keys to the car.

Will we give it to them? Or will we finally begin to take back our lives? Our country?

A country that hasn’t been “stolen” by illegal immigrants, gays, Iraqis, Muslims, secular humanists, non-Christians, scientists, Hollywood, Canadians, our school teachers, liberals, moderates, the French, or even people who listen to NPR; but rather by those at the top — the top of the corporate ladder, the top of the “Christian” Right ladder, the top of the partisan political ladder…

And those at the very top — the one percenters.

The ones who by their very actions show that:

More is never enough…

More control…

More money…

More power…

Less you…

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About Marlowe

  • Lisa Solod Warren

    I am going to go you and Barbara even one better today and post a piece that cites all sorts of reasons and places people can go to read why this thing should not go! Thanks to you both.

  • MARLOWE

    Lisa… Looking forward to it!

    Marlowe

  • http://www.associatedcontent.com/user/39420/joanne_huspek.html Joanne Huspek

    The longer this has dragged on, the more opposition it will get.

    I have a real problem with the government taking over Wall Street and the insurance industry. The next step is to take over everything else. Like I said elsewhere, the Big Three have their hands out too. The local word on the street is that they will get bailed out like everyone else.

    It seems like those at the top are getting the golden parachute, leaving the people to deal with the mess.

    Am I alone in thinking that this smacks of socialism?

    There’s a reason why there are three different branches of government, and that’s to act as checks and balances against each other.

    As far as I can see, big business and government are in bed with each other, and have been since the 1960s. The only difference between then and now is that it’s an incestuous relationship.

  • MARLOWE

    Joanne… I would suggest this is more along the lines of theft.

    Socialism has been a straw man set up by the very people who have been and are now stealing us BLIND.

    Every time anyone makes a proposal of any sort that might possibly threaten their wallets they and their media megaphone scream SOCIALISM! SOCIALISM! As loud as they can to scare their – to be perfectly blunt – unthinking political base…

    You see the same thing among the mega-millionaire leaders of the “Christian” right. All they need to do is scream their Pavlovian Panic terms, such as HOMOSEXUAL! EVOLUTION! SECULAR HUMANIST! And their base will mobilize – ready to mindlessly march off to do their bidding…

    Let me ask you… Do you pay taxes? I imagine you do… So how do you feel about the socialism that surrounds you… Like the police department, the fire department, the water department, the sewer department, the transportation department, the ambulance service, the library, the parks service (and until DEREGULATION really took hold) the utilities department??

    Because ALL that is “socialism” according to Corporate America, who would LOVE to strip it away (as they’re already doing in many local government settings) so that they can “run” it more “efficiently”.

    “Efficiently” is a corporate euphemism for profitability. Profit for THEM. Less service and less quality for YOU.

    Ask the people in San Diego who watched their homes burn in certain locations 2 years ago when “private” fire department workers refused (so sorry) to put out fires that were engulfing “non-member’s” homes.

    I could go on for hours with examples of how corporate America is trying to strip the last bit of “socialism” from you – right up to the water coming out of your faucet.

    All this USED to be referred to by those who founded this country as THE COMMONS. By that was meant “things we, as a society, share in COMMON and thus ALL contribute to…” LIKE water, roads, fire departments, police, etc.

    No, this ISN’T socialism Joanne. Don’t let anyone shape your thinking. LOOK at what is being done and ask yourself WHO is getting the MONEY?

    Marlowe

  • Les Slater

    from ‘Defense of Capitalism’ my #50:

    For all practical purposes much of the mortgage debt is being nationalized. We should fully nationalize all mortgage debt and take it totally out of the hands of the banks. End all foreclosures and compensate for those that have taken place since this crisis began.

    Most housing bought in recent years is not really worth anywhere near its market price. Re-price by some formula what the occupants of those homes should pay for rent or mortgage payments. The nationalization of mortgage debt should include all loans collateralized by rental property and strict rules as to rental prices instituted.

    Profits, and there would be profits, from payments by households should be used to build affordable housing on a massive scale.

  • Les Slater

    “A country that hasn’t been ‘stolen’ by illegal immigrants, gays, Iraqis, Muslims, secular humanists,….”

    This is so important. Hitler was able to blame the Jews. There are some misguided people that blame poor people trying to buy a home. Most weren’t even trying, they had these loans foisted on them.

  • Marlowe

    Les… The “Right” has, for more than two decades esp., depended on being able to terrorize their base. When the corporate elitists recognized the advantages of wedding the old republican party with the “Christian” right – well, it was most definitely a marriage made in hell…

    the problem with ratcheting up the fear and loathing of this base is that each time MORE energy has to be infused… At a certain point that base can no longer contain the blood lust they’ve been brought to…

    Right now the powers-that-be are desperate to take America to another level of control.

    If McCain wins they will work (as much as they can) through him and or around him… If Obama wins it will make the rabid right years of Clinton-bashing look like a Victorian love affair…

    Unless there is a real revolution in this country, a spiritual revolution really, that begins to tear down the current cancerous capitalism and replace it with a far more mature form of capitalism… Well, I can’t even begin to imagine what the next decade will look like…

    Marlowe

  • Einstein

    It is reported that there are 2,000,000 foreclosures. The average sale price of a home is $212,400.

    If each foreclosed property is worth 50% of its loan amount, the loss on each loan would be $106,200.

    2,000,000 x $106,200 = 212,400,000,000

    That’s 212.4 billion.

    That leaves room if the 2 million figure is too low.

    Why not leave the people in their homes and let them pay the initial monthly payment until the house is sold, at which time a new owner would assume the mortgage. The mortgage would remain until the debt is paid. It simply would take more time.

    Of course, solving the problem this way does little for the assholes who are to blame for the debacle.

    Oops, there go a lot of mansions and sailboats…

  • http://www.associatedcontent.com/user/39420/joanne_huspek.html Joanne Huspek

    Marlowe: “Let me ask you… Do you pay taxes? I imagine you do.”

    Oh, yes, Marlowe. We pay a boatload, and most of it is to prop up a government-heavy Michigan. It pains me to see the “entitled” get theirs without working a fair day’s work for a fair day’s wage. But don’t get me going on that, because I won’t be able to stop.

    Government, while a necessary evil, has no business with its hands in “business.”

  • http://handyfilm.blogspot.com handyguy

    Well, here’s one liberal who urges other liberals to take a chill pill and contemplate the consequences if the credit markets really do completely freeze up, which is not just a paranoid fantasy.

    I don’t believe Paulson wants to run Wall St as a ‘royalist.’ I think he and Bernanke looked over the precipice into the abyss last week. We do not want to go there.

    If Lisa et al have a better idea, let’s hear it. But just throwing out populist stink bombs is not doing anyone any favors.

  • Cannonshop
  • Marlowe

    Handy… The problem is history… Folks don’t realize that the Depression didn’t happen on one day in October… It took several years. And I would urge everyone to examine what Hoover and his people did in those years between 1929 and 1931. Some of it was similar to what is being done now. Some not. But in both – those controlling the market came back in to control it. Most of this hangs around his Reconstruction Finance Corporation…

    Joanne… Is their problems with the “system”? hell yes… You mention state taxes… Realize (not making any comment on the State of Michigan itself) but those in charge of restructuring our federal taxes and redirecting allocations… Have consistently STRIPPED funding to state governments – for programs that- once again went to THE COMMONS aspects of our daily lives. So what do states do? Well, they have to try and replaces those funds, to some degree…

    Middle class Americans really haven’t seen their federal taxes go down for some time now – mainly because the taxes and the loopholes for the top 1/10th have allowed the PRIVILEGED CLASS to siphon off HUNDREDS OF BILLIONS from what should have been their fair share of taxes… All the while they crow about how their BILLIONS will put “Americans” to work. Really? Well, the tax winds have been blowing in their favor for DECADES now so where the HELL is the new and improved American Economy? Any damn day now I should expect to see those MILLIONS of jobs that have gone overseas – to companies THEY own OVER THERE to begin arriving home, right?

    Right…

    Marlowe

  • Clavos

    Marlowe,

    i don’t think your analogy works.

    Police, Fire, roads, etc. are NOT the same thing as banks and brokerage houses. By definition, the banks ARE “for profit” enterprises.

    I, too, am against the bailout, if for no other reason than that no lesson will be learned, either by the stupid people who let themselves be conned by the bankers, or by the bankers themselves.

    I say, help the little people, bail THEM out (but with strings-tighter credit rules, etc.) and prosecute the bankers, AFTER their firms collapse.

    For those bankers convicted of crimes: punish them SEVERELY; LONG sentences, in max security prisons, not the country clubs they usually get. After a few of them are raped by Brotherhood and Aryan Nation types, they’ll probably learn how to be humans again.

  • troll

    thanks for that link Cannonshop

  • Lisa Solod Warren

    Joanne, Socialism isn’t a bad thing,per se; it has just been given a bad name….. In this case, it is socialism of loss and privatization of gain Which isn’t socialism at all. Once again, the conservatives warp words to their own goods. Don’t let them fool you.

    Michigan is a good example of the rich getting rich and the poor getting poorer.

    Poor GM, they won’t advertise on the SuperBow this year to cut costs…
    Meanwhile they still can’t come up with a decent mileage, gas efficient of otherwise energywise car, even though they should be able to….
    and the workers lose their jobs and the economy there tanks…

    And housing?
    Why SHOULD everyone own a house? Who says so?

    The government, the media? The unscrupulous mortgage brokers and bankers?

    I bought a house I could afford when I could afford it and not until.

    It wasn’t a big and ugly fancy McMansion either.

    It didn’t cost me 2500 a month in a payment.

    Wouldn’t do it even if I could afford it.

    Why not rent, why not live in an apartment?

    Why doesn’t the government get rid of the mortgage credit on taxes and make taxes more fair and less complicated?

    But WHY should the average American pay for the rich fat cats who saw this coming, squirrled away the big bucks, have their hands out for more and AND our taxes are going to have to go up to pay for it all AND we aren’t going to get health care and other services we need and deserve?

    See my upcoming opinion piece. I hope it helps:)

  • Les Slater

    Marlow,

    “…Is their problems with the ‘system’?”

    I’ve been saying for years here on BC the the capitalist system is in a deep crisis which is further deepening.

    Can the bailout stave off a full meltdown? Maybe, for a while, but it is going get worse, much worse.

    We should at least protest the robbery they are trying to foist on us. We should raise alternative solutions. Nationalizing the whole banking system right now would be a reasonable thing to do.

    Les

  • Clavos

    Nationalizing the whole banking system right now would be a reasonable thing to do.

    When that happens, my money, little as it is, leaves the country.

    NO WAY will I leave my liquid assets in the hands of the government…

  • Les Slater

    “NO WAY will I leave my liquid assets in the hands of the government…”

    Well, you are doing precisely that at the moment. That’s what FDIC is about. For now it seems much safer than just being held by these ‘responsible’ private bankers.

  • Lisa Solod Warren

    Oooooh, Clav, all that talk about maximum security prison sentences is turning me on.

    But seriously, I agree with you. Lock ‘em up. I mean, we lock guys up for stealing cars and drugs, for pete’s sake. These guys have royally fucked an entire nation. And they did it knowingly and with malice aforethought.

  • Marlowe

    Clav… I was responding to what Joanne was saying about “socialism”. That might be where we crossed communication lines there – sorry if that wasn’t clear.

    Hell will freeze over before anyone but maybe ONE sacrificial goat is sent to prison… And actually, since so many of the “laws” are written in their favor I doubt many were broken in most cases.

    When you continue decade after decade to allow the crooks to run the place with that wonderful revolving door they DO get around to rewriting the books so it all is nice and clean…

    Read PERFECTLY LEGAL…

    Marlowe

  • troll

    it is time for community organizing…

    protest foreclosures – protect your neighbor

    start thinking about what kind of a society you want to make and how we can get there from here

    ‘shock therapy’ can be a double edged blade

  • troll

    …….what useful items can you make for a transformed ‘black market’ – ?

  • http://www.futonreport.net/ Matthew T. Sussman

    Let me tell you what I all think about the current … oh, wait, I don’t know shit about economics.

  • Clavos

    Well, you are doing precisely that at the moment. That’s what FDIC is about.

    None of my money is in FDIC insured accounts.

  • Clavos

    And they did it knowingly and with malice aforethought.

    I don’t think malice was involved, just greed.

    I doubt any of them sat down and said, “Hey, I’m bored. Let’s screw some little people, it’s so much fun.”

  • Les Slater

    “None of my money is in FDIC insured accounts.”

    Ok. Whatever instrument(s) your funds are in as part of the ‘banking system’ are likely being backed by the U.S. government, if not explicitly, then implicitly.

    You have a choice: You can have them nationalized, at least partially, by the proposed $700b bailout gun to your head.

    The other choice is to openly nationalize the banks.

    Their $700b scheme is not likely, I say, will not, solve the crisis. The nationalization won’t end the crisis either but will take it out of the hands of the fools throwing good after bad to save their asses and system.

  • http://www.maskedmoviesnobs.com El Bicho

    Matt, you didn’t know shit about DFWallace, but that didn’t stop you then.

  • Clavos

    You have a choice: You can have them nationalized, at least partially, by the proposed $700b bailout gun to your head.

    Upthread, Les, I said in #13 “let ‘em collapse; NO bailout.”

    My funds won’t be affected.

  • http://www.futonreport.net/ Matthew T. Sussman

    That’s not true! I knew he died.

  • Les Slater

    “My funds won’t be affected.”

    Besides me being skeptical about your funds not being affected by a collapse of the banking system, how would they be affected by nationalization?

  • Lisa Solod Warren

    Clav, no they didn’t sit around and plan the damn thing, but they sure as hell knew what they were doing was dicey, barely legit, and taking advantage of every possible loophole.

  • Heloise

    I wouldn’t let Paulson hold my old grannies sagging tits while she washed under them, enough said?

    Heloise

  • http://handyfilm.blogspot.com handyguy

    Clavos, if you care about the country as a whole, not just ‘your funds,’ you’ll admit that the course you prefer is potentially disastrous for other people. Maybe you just don’t care. Your rhetoric is out of step with reality and with any concern for the larger picture. [Dare I say ‘the greater good’?]

  • Marlowe

    Heloise… Thanks for that image… I’ve been trying to trying to cut back on helping at dinner… and THAT did it…

    Coming dear!

    Marlowe

  • Clavos

    how would they be affected by nationalization?

    I don’t know, but I don’t want the government (any government) in possession of what little funds I have–I’d rather bury them in a Mason jar in the back yard.

  • Heloise

    Will Wall/Fall Street survive October 29, 2008? I learned a few things buying stocks on Wall Street that with online buying, short sells and other economic gimmicks you are a sitting duck waiting for someone to duck you. I mean apple is now trading under 130 after hitting a high of 207. I sold mine at about 199.00 because I knew the shit wouldn’t last.

    It may come back around but when? The way stuff is set up now Wall street can only be beat with insiders and the brokers and the very rich.

    As for the millions of people who got loans let me tell you something: when I went to buy my house in 1998, not ONE damn bank would give me a penny. They laughed at me and lied to me!

    Fast forward 2001 or so, and any idiot with a pen can go in and get a loan. What’s worse when I worked for banks I saw that they were GIVING money away to illegals to buy big trucks and houses. So if you give it to the wetbacks you have to give it to black folks too!!!

    Then they said well I guess we can’t leave out the trailer trash aka rednecks they need loans too. WTF? I was a teacher and couldn’t get a dime.

    So how did I get my house? I had to go through a mortgage company who bought my loan then sold it three times. It ended up with Fannie mae because I WAS a bad risk. I have to pay like an extra 30.00 a month in bad loan insurance…yes, a teacher is a bad risk in 1998, forever I have to pay this on a loan under 100,000! That’s right we pay insurance along with our loans to Fannie and Freddie even though get this–Fannie no longer owns my loan Wells “Illegal immigrant loving” Fargo has my loan.

    This Bailout is the biggest scam I’ve ever seen and I’ve seen a lot of them.

    Heloise

  • Les Slater

    Clav,

    “I don’t know, but I don’t want the government (any government) in possession of what little funds I have–I’d rather bury them in a Mason jar in the back yard.”

    I think I empathize with you. Things are serious. Good luck.

    Les

  • Lisa Solod Warren

    Heloise! Check this out….. John McCain’s aide was paid through 2005 by Fannie Mae!

    These guys are something else!

  • Lisa Solod Warren

    And Marlow, still waiting for my article to post.

    Meanwhile, this is interesting…. just in today.