Secretary Paulson is Trying To RUIN America!

If you are not reading Mish's Global Economic Trend Analysis, you should be.

I know I've been on it a lot lately, but there seems very little as important right now as the future of capitalism vs. socialism in the free world in my lifetime. If you don't like it, you're not paying attention.

Stay on target!

As I was saying. Secretary Paulson, Democrat, is trying to jam a trillion dollars' worth of socialism down your throat. That would be: buy up what nobody in the world wants, for a price nobody would pay, and then lose money when you sell it, after paying billions of dollars of interest on it, in dollars whose value has been depressed by the deal. I said it before (regarding the "economic stimulus"/relection act), and I repeat myself here:

Whose economy are we trying to stimulate, anyhow?

Well, apparently, everyone else's but our own. Seeing that Sec. Paulson has said he'd recommend a veto for any version of the bill that did away with a provision to do away with "toxic debt" held by foreign investors.

Yes, go ahead, read it again, I'll wait.

Surely, David, now you are making things up! We're trying to bail out the homeowners here! (you mean, the ones who didn't care that they were getting in over their heads, when they were doing it? Or the ones who lied and said it was their primary residence when they were really trying to flip houses for quick profit? Or the ones who never intended to pay a mortgage note and lived rent-free in a house for most of a year before destroying the house, renting a U-haul, and moving out? No, we mean the honest one who just didn't get it that they wouldn't be able to pay 70% of their income as mortgage debt) See, it's too hard to force everybody holding the mortgage note to do a workout with all the genuine we-thought-we-could-afford-to-live here folks, and throw all the bums in jail (or even give them a bad credit rating).

Okay, but I'm still making it up. Right.

And I quote: (ahem)

"3 SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES
4 AND CENTRAL BANKS.
5 The Secretary shall coordinate, as appropriate, with
6 foreign financial authorities and central banks to work to
7 ward the establishment of similar programs by such au
8 thorities and central banks. To the extent that such for
9 eign financial authorities or banks hold troubled assets as
10 a result of extending financing to financial institutions
11 that have failed or defaulted on such financing, such trou
12 bled assets qualify for purchase under section 101.

"7 SEC. 101. PURCHASES OF TROUBLED ASSETS.
8 (a) OFFICES; AUTHORITY.—
9 (1) AUTHORITY.—The Secretary is authorized
10 to establish a troubled asset relief program (or
11 ‘‘TARP’’) to purchase, and to make and fund com
12 mitments to purchase, troubled assets from any fi
13 nancial institution, on such terms and conditions as
14 are determined by the Secretary, and in accordance
15 with this Act and the policies and procedures devel
16 oped and published by the Secretary.

"3SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES
4 AND CENTRAL BANKS.
5 The Secretary shall coordinate, as appropriate, with
6 foreign financial authorities and central banks to work to
7ward the establishment of similar programs by such au
8thorities and central banks. To the extent that such for
9eign financial authorities or banks hold troubled assets as
10 a result of extending financing to financial institutions
11 that have failed or defaulted on such financing, such trou
12bled assets qualify for purchase under section 101."

That's from the bill, rearranged to remove some lawyer-induced intentional obscurity and repeated for emphasis. You will recall, please, that one of the problems even squishy moderate conservatives have with this bill is that it gives the Secretary very nearly unlimited power to carry out the provisions of the bill. Moving right along:

From Congressman Brad Sherman, Via Mish:
"The bill is very clear. Assets now held in China and London can be sold to US entities on Monday and then sold to the Treasury on Tuesday. Paulson has made it clear he will recommend a veto of any bill that contained a clear provision that said if Americans did not own the asset on September 20th that it can't be sold to the Treasury.

"Hundreds of billions of dollars are going to bail out foreign investors. They know it, they demanded it and the bill has been carefully written to make sure that can happen."


The world's financial ministers are almost literally whining and crying, saying we should take the bad debts off their hands. It's our fault the world is in this mess, and we should have to pay to fix it now, eh? Guess what? Yes and no.

Yes, we introduced the world to an economy based entirely* on spending more than was earned, and then spending more to pay interest on it, then cooking the books to make it all look just like a profit, then sell that and watch the markets go up 200% in a generation. Yes, we did that.

And since we USED to be capitalists, that would mean that, when everybody charged all their credit to the limit, the whole thing would come crashing down. This apparently is an unpopular option, so now the world wants us to put a gold band-aid on their boo-boos and make it all better with a trillion-dollar kiss.

Let me tell you what they can kiss.



* This is the "fundamentals of the economy" that everyone is talking about: you keep on buying stuff you could have waited another 5 years to buy, because you still had credit on your cards. Fundamentally strong or fundamentally doomed to failure? You decide.