Wall Street bailout turns into wall of text but it’s still the same old vinegar in a bigger bottle
So yeah, if you can’t dazzle them with your brilliance, baffle them with BS. Off I go to open up the latest version of the Wall Street bailout bill (aka. "bending the middle class over the table Act") and what do I find? Up from 104 pages to… 451. The original bill was 3 pages. Given the exponential growth of each version of this bill, I fear we must either kill it now, or allow it to pass, out of fear that if its growth continue it may end in such a cyclopean extent that it destroys all rational thought, matter and energy in the universe in a blizzard of legalese, corruption and pork.
On a more serious note, they are definitely throwing in the kitchen sink in an attempt to get this to pass. "You say you need a kitchen sink in order to vote for this? Fine, here it is!" For example, renewable energy credit extension has been added to the bill. Sure, I support the credits, but say what? No bankruptcy protection, but renewable credits? Calculated Risk’s favorite is an excise tax exemption for wooden arrows for children. Er, ummm, wtf?
On the substance of the matter at hand, of course, it isn’t much changed. Increasing how much the FDIC insures is good, but something the FDIC could have done itself at Presidential order, it has the authority (and IRAs were already insured to $250,000). As "concessions" go, that’s very very little since Obama or Bush could have just said "make it so". Adding in letting the FDIC borrow infinitely from treasury is also good, but it’s an administrative detail, the guarantee was already there.
There’s still no bankruptcy protection for ordinary people. The treasury secretary can still spend money on any asset he wants, pay whatever he wants, sell it for whatever he wants and doesn’t have to take an equity or bond share if he does, and if does do it can’t take voting stock but must take non-voting stock. Executive compensation restrictions are a joke, just "pay a little bit more tax on your pay" and overall there’s nothing in here, nothing at all, which would stop banks from continuing to engage in the same practices as got them here. That’s insane. This isn’t even closing the barn door once the horses are all out, this is buying new horses and deliberately leaving the barn door open.
Bottom line: a bad bill which has been larded up with various legislators pet bills to get the votes necessary to pass. Everything I’m hearing says it will easily make it through the Senate. The real fight remains in the house.
If you’re feeling masochistic, put your favorite new provisions in comments below.