The Deal

....is still God-awful. But it's a lot better than it could have been had John McCain not done the unexpected by sticking up for House Republicans in his otherwise disastrous attempt to intervene in the Wall Street b[uy]out negotiations:

A summary of the tentative agreement released by Mrs. Pelosi’s office said the plan “gives taxpayers an ownership stake [i.e. nationalization - I DID say it was still God-awful] and profit-making opportunities with participating companies; puts taxpayers first in line to recover assets if a participating company fails; (and) guarantees taxpayers are repaid in full — if other protections have not actually produced a profit.” (See Mrs. Pelosi’s summary.)

Additionally, the summary said the legislation will expand the range of firms that can sell troubled assets to the government to include pension plans, local governments and community banks serving “low- and middle-income families.” …

The summary issued by Mrs. Pelosi’s office said the legislation will include provisions giving Treasury the ability to work with cash-strapped homeowners whose mortgages are purchased by the federal government to refinance into a more affordable mortgage. Other foreclosure-prevention measures included in the agreement are an extension of the tax holiday for homeowners who face foreclosure, as well as a tax break for community banks who held shares of Fannie Mae and Freddie Mac. The rescue plan will allow affected banks to take an immediate tax deduction on losses from investments in the two firms, which were taken over by the federal government earlier this month.

Lawmakers also included provisions allowing them to keep a close eye on the Treasury program, including a bipartisan oversight board appointed by members of both parties in Congress, an inspector general to monitor Treasury decisions, and regular audits from the Government Accountability Office. Additionally, Treasury will be required to make transactions made through the troubled asset program available publicly online. Unlike the original Treasury proposal, which would have given the department legal immunity in the program, the tentative agreement reached late Saturday allows for judicial review of Treasury decisions.

Here and here, thanks to House 'Pubbies, is what the deal does NOT include:

***Barack Obama's $56 billion worthless deficit spending bill, into which Dirty Harry tried to slip a renewed ban on developing Western interior oil shale deposits

***Proxy access for unions and other activist groups to corporate boards

***Mandate of shareholder votes on compensation issues (union priority)

***Dick Durbin's provision to allow trial judges to arbitrarily adjust mortgages, creating bonanza for trial lawyers

***Requirement for the government to sell to state and local governments at a discount homes the government acquires as a result of foreclosure

***Subsidies for ACORN, La Raza, or any other "community organizers"

***New taxes on the financial services industry

***The entire $700 billion in one lump sum.  Maximum outstanding balance at any one time is $250 billion, beyond which Congress has to authorize any additional outlays (i.e. future b[uy]outs)

***Treasury exclusivity.  Public/private auctions, loan guarantees, and direct support to financial institutions are additional options, and taxpayer-protecting insurance is mandatory

***No oversight.  The deal requires an oversight structure by creating a Financial Stability Oversight Board, a Special Inspector General, and a Congressional Oversight Panel.  Furthermore Treasury has to promulgate regulations prohibiting conflicts of interest amongst the personnel running this boondoggle

Basically, the Donk poison pills and pork have been stripped out and some token Republican suggestions have been included.  Concessions that can easily be reversed next year when Congress will be even "bluer" and Barry O will be sitting behind "Irresolute" in the Oval Office with his stuttering pen at the ready.  Nothing to cheer about, or even groan less disconsolately, but perhaps the difference between The One being the next Jimmy Carter and the next FDR.

I can't let Ensign Ed's naivete pass without a swipe or three:

This will still be a painful lesson for us about government manipulation of markets.  We will have to tighten belts and cut spending to pay for the initial outlay from this bailout, and we still have another financial crisis coming on entitlements to resolve....

After this, we need to demand humility from Congress on economic policy.  Government-imposed “fairness” led to this catastrophe, and we’ll pay the price for the Community Reinvestment Act and the manipulations of Fannie Mae and Freddie Mac for a generation.  Had we allowed the market to work normally, this never would have happened.

What "lesson"?  That makes two false presumptions: (1) that Democrats didn't know precisely what they were doing when the fascistically outsourced housing welfare to the private sector, and (2) that if they didn't, they will ever give a damn about learning it.

In the same way, does anybody besides Mr. Morrissey seriously believe that the rampaging unified Donk regime that will sack Washington next January will cut spending to compensate for the cost of this mammoth b[uy]out?  C'mon, they're going to restore individual and corporate tax rates to pre-JFK levels, and we'll be lucky if the capgains rate ONLY doubles.

The winners of the 2008 election may be capable of many things, but "humility," particularly about the constructive capabilities of government, ain't one of them and never will be.  The very Wall Street Meltdown itself is stark proof.  The only way to obtain such humility is to throw out the Dems who made this mess and put the Republicans back in charge.  But the only way to do that would be for the Republicans, led by John Sith McCain, to launch withering attacks against the majority explaining chapter and verse how it was THEIR policies that created this catastrophe.  And I haven't seen anything like that coming across the airwaves anywhere - have you?

That's why I believe that a meltdown was the Dems' long-term objective all along.  Look what they're getting out of this: at least partial nationalization of an entire private sector, um, sector, complete absolution from any blame for precipitating it, and unchecked political power for a generation or more.  The only better outcome for them would have been a continued stall that let the entire economy collapse (if it would have - the fact that they "settled" for this compromise tells me they had their doubts and didn't want to risk overplaying their political hand.  Hope that's enough "humility" for you, Ed, 'cause that's all you're gonna get).

Newt Gingrich, kind of the center-right barometer for this "crisis," pretty much sums up my take on the deal....:

....while Harold Lauder and Nadine Cross sum up my forebodings as to what it portends for the future:

"Nadine... we're damned."

"I know, Harold...I know."