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Why The Patriot Act of Finance Failure Prevents Dictatorial Control

Paulson and the Fed fail

So for those who are sitting in their soon-to-be-foreclosed-on homes financed with FHA or subprime mortgages, a little bit of righteous indignation seems to be in order over the rejection of The Bush Bailout Plan by Congress. That was your ticket out, right? Big deal if you bought a house you knew you couldn’t afford with taxpayer subsidies! You’re entitled to a rescue! Well, you might want to keep your shirt on for the moment, unless that was purchased with make-believe credit, too. The bailout plan put before Congress isn’t exactly something that would’ve been good for America. The plan contained a very sly stipulation that would’ve given Treasury Secretary Henry Paulson more power than God.

What They Tried to Sneak By

At face value, “bailout plan” sounds well and good to those who have no objections to socialist economic policies. Ah, but the plan was not so benign. The law contained the following insidious and downright frightening provision: “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.” Translation: Henry Paulson can do whatever the hell he wants. To a lesser extent, so can his agency at its “discretion.” But beware-discretion is soon to be the new fascism.

Recap on Dictators

Under the bailout plan that Congress had the good sense to shut down, Henry Paulson would have basically been allowed to make unilateral decisions, all while enjoying the unparalleled pleasure of an accountability-free reign. He could rule with an iron fist, toying with the nation’s economic equilibrium, and no one would be able to say a word. So let’s recap how this kind of dictatorial strategy has fared throughout history. Consider the following rip-roaring success stories and all-around just nice guys:

  • Benito Mussolini
  • Adolf Hitler
  • Fidel Castro
  • Kim Jong II
  • Henry Paulson (still in a dictatorship intern program…full honors come with the next bailout plan)

So What’s the Patriot Act Got to Do with It?

Sometimes “crises” force politicians to do foolish things. Even more so than usual. For example, 9/11 was the impetus for the Patriot Act, which also managed to completely circumvent court oversight. Abuses of power and a sort of extreme-sports eavesdropping went down, and the bill managed to totally buck any kind of judicial review. Thus, the scuttlebutt has pegged the defeated bailout plan as the Patriot Act of finances. And, really, who could argue? This moment calls for a cliché: absolute power corrupts absolutely.

We Have to Blame Someone

$700 billion voided check.

The government is an easy whipping boy when economic hard time strike. The media creates what I like to call a CINO (a crisis in name only), people panic, causing the market to take a dive, and, because it’s an election year, suddenly politicians are in a feverish frenzy to “fix” the alleged crisis. But, honestly, has the government ever really fixed anything?! Government attempts to correct the market always fail miserably, as do most government plans to remedy situations. It’s like when the dishwasher would break in your house, and your dad, eager to demonstrate his mechanical prowess, would refuse to call a professional and instead try to fix it himself. Before you know it, you’re sleeping on a mattress of dirty dinner plates, the kitchen’s on fire, you can’t find the dog, and the whole fiasco ends up costing you more, in stress, money, and time, than it would’ve if your dad had just stayed out of it.

Like it or not, we’re sticking with the dishwasher analogy. In the case of our economic “crisis,” the professional dishwasher repair man is what the father of modern economics, Adam Smith, called “the invisible hand.” Notice that he did not say the very visible hand (or iron fist) of Henry Paulson, Barack Obama, or Dubya (God love him). The market naturally goes through vicissitudes-ups and downs that are part of the economic cycle. What really screws the economy up is when Dad, representing almost any politician today, comes along and tries to fix something he’s incapable of fixing and probably had a role in breaking in the first place. A Henry Paulson dictatorship is not going to fix the economy. Remember “laissez-faire,” that vaguely familiar term from high school econ and the cornerstone of capitalism? Literally, it means, “let do.” In other words, leave it alone, Henry Paulson. Leave it alone, George W. Bush. Leave it alone, two buffoons who are running for president.

New Leadership: Our Economic Savior?

George Washington crying.

The current administration has taken its best shot at the economic crisis, and I use the term loosely, and failed. Congress rejected the plan, thankfully, but, had the bill passed, the equivalent of the Patriot Act of finances would have been upon us. I’m going out on a limb here, but Henry Paulson dictating monetary policy with unbridled power may not be the answer. So what IS the answer?? New leadership? Doubt it. Let’s evaluate John Sidney McCain III and Barack Hussein Obama II on this issue.

John McCain has entered Congress in 1982. His career in the Senate began in 1987. Age-wise, John is in his early hundreds. The point: McCain has had ample time to “fix” and perhaps even foresee this crisis, but he has seen fit to do so only in the month before a presidential election in which he is the Republican nominee. Something smacks of political expediency, wouldn’t you say? You have to remember when politicians throw around phrases like “suspending my campaign to fix the economic crisis,” this really can just be summed up in one word: gimmick.

Now onto the political Messiah, Barack Obama. First, recall that one of the biggest disasters that kick-started this economic panic was the failure of the Lehman Brothers, whose collapse was traced to corruption and abject stupidity at Fannie Mae and Freddie Mac. These two massive mortgage banks continued to survive, doling out loans to deadbeats who were clearly terrible credit risks to begin with, but how could any business manage that? The answer: political contributions. Fannie Mae and Freddie Mac were bedfellows with a number of senators in order to keep their unsound and floundering business afloat. Now guess the politician who received the second-largest amount of political donations from these banks, despite having only been in the Senate for four years. None other than Barack Obama.

Bottom line, we don’t need Dad, Obama, Bush, Paulson, or any other politician fixing our economic dishwasher. We have one Patriot Act, and that’s plenty.

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