Homestead mailing list

["Don Bowen" <don.bowen AT earthlink.net>]

> Yes, I'm sure.  Hank Paulsen's scheme makes the Treasury the direct owner
> of bank assets.

The Paulson plan has the treasury buying the toxic waste of bank assets.
The problems are several.  One is that there is no oversight of the treasury
activities.  Paulson has complete control over who gets the money and how
much.  The Secretary has complete control over who is hired or contracted to
do the job.  There is no legal or legislative oversight allowed.  And do not
forget that there will be a new treasury sectary in six months or so.  Think
for a moment of someone like Phil Gramm with that power.

Another problem is that there is no protection for the taxpayer.  What
happens if the toxic waste sells for significantly less than the purchase
price?  What if there is a profit realized?  Who gets the profit, who pays
the loss?  No hints in the proposed legislation.

The $700B is just a guess.  The first figures bandied about were $800B to
start and maybe another $400B a bit later on.  Bernanke has indicated that
the bottom is unknown.  Even if $700B is a limit, all of it will be spent
and your grandkids will have to pay.  The legislation raises the debt limit
to $11.3T.

Who rates the toxic waste?  Banks have problems because they cannot find
buyers for the toxic waste at prices they find acceptable.  Will the
treasury pay a premium or will they force discounts.  No one knows just how
bad the waste is and the system was built with as little transparency as
possible.  See the first concern to see how the hiring process for the
rating people could go.

There are no punishments for those who profited most handsomely.  Executives
with huge bonuses will keep the millions.  At worst shareholders will take a
hit but many of those are your pension plan holders.  That means you lose
while they win.  A most lopsided example of privatizing profits while
socializing costs.

And what do the people get beside a real screwing?  What will we get besides
a huge new debt.  As companies shed employees, houses are foreclosed, local
taxes raised, services cut, congress is being asked to bail out the wealthy
and throw us off the train.

Don Bowen  KI6DIU
http://www.braingarage.com/Dons/Travels/journal/Journal.html