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Risk Policy Crisis?

Published yesterday, an article of Christian Chavagneux for "Alternatives Economiques" makes me want to prolong matters my previous post . Indeed, if the moral aspect of the plan is often discussed (in terms of "taking from the poor to give to the rich"), I find it regrettable that the political aspect is fairly systematically forgotten. It was the subject of my post.

Christian Chavagneux supports "Paulson plan" with an enthusiasm that left speechless. The post title ("The rejection of the Paulson plan plunges finance in a dual crisis") is confirmed in the hat ("The rejection of the Paulson plan by a majority of U.S. lawmakers has plunged the financial internationally, including Europe, into a gulf that is difficult to know how it goes out. "). The article points out, however, further evidence: the (double) crisis precedes the rejection of the Paulson plan, not vice versa. So why the title and this introduction?

The last two paragraphs are pretty amazing.

If $ 700 billion may be incurred, it is unclear whether the government will need to use all that money. Moreover, once the crisis has passed, some of the purchased assets will see their value increase and the government could even make money on some transactions. In addition, the latest version the plan provides that the government has been offered as security the opportunity to buy shares in banks it helps. Thus, if the situation of banks is improving, the government may sell the shares and earn money to repay the cost of the plan. Last but not the least progress, the plan includes a review of the implementation of the plan after 5 years and allows the government to tax the financial sector if the final budget cost is important.

If I read correctly, this plan is so good:

1. is a plan that will cost 700 billion to 700 billion;
2. and more at the end, we'll get a good Part of this money;
3. and even the government could "earn money to repay the cost of the plan."

It's party time!

But then, why such a good plan he was initially rejected?

The plan required, was rejected by 228 MPs, 95 Democrats and 133 Republicans. We knew from the beginning that the Democrats would reject the plan and was expected to mobilize the Republicans. This has occurred but to reject the plan. In total irresponsibility with regard to history and their country, these MPs have rejected the plan for two reasons. Either by pure ideology, calling it "financial socialism". Or because elected officials with a small margin and early November to stand before voters reluctant to Helping Wall Street, they chose to reject the plan rather than to explain the need. The violence of the rejection of the plan, Paulson and authority of George W. Bush has been such that 18% of MPs retiring Republicans, and therefore no election issue have voted no anyway.

Again, if I read well: U.S. lawmakers have refused because:

1. they are ideologues (Hum. .. elected by the people reject a plan for political reasons while the plan is economically "necessary" is it now a valid argument in "Alternatives Economiques"?)
   
2. they are demagogues who seek re-election (which is bad) ;
3. even those who are not ideologues and are not seeking re-election are cons (good: "18% of Republican congressmen retiring," it must do two people to break everything, like it's been 2 of 11 18%): This proves something but I do not know exactly what. 82% of Republican congressmen (type: 9 out of 11) who go on voted for retirement, but that it does not prove much (personally, if 82% of Republicans are for, I tend to find this suspect, but that's another story). The

Diplo posted at the same time, a "pouch " which still makes less "ideologue," "demagogue" and the untenable choice of some parliamentarians:

In an election campaign, many Parliamentarians have measured the extent of popular resentment to a plan that , at taxpayer expense, erases losses for banks, while anything so massive had been anticipated when hundreds of thousands of Americans were thrown into bankruptcy by the decline in their real estate assets.

[...]

Beyond the horror that can inspire them an additional commitment of public power (a Republican is theoretically in favor of "less government" and accounts in order ...), their negative vote is attributable to the authoritarian and hasty decision that would make them

Another question should be, in my opinion, asked. She joined my questions about the political risks induced by the crisis: under what conditions can we further empower as large in the Bush administration, knowing how this administration is able to abuse any power entrusted to him, and how these abuses of powers are the successes that we know?

The three men who have direct hands on this gold mine of over 700 billion dollars, are:

• Henry Merritt "Hank" Paulson Jr., "United States Treasury Secretary" (here I prefer not to translate names of official institutions and to avoid misinterpretation), appointed by George W. Bush May 30, 2006;
• Ben Shalom Bernanke "Chairman of the Board of Governors of the United States Federal Reserve, appointed by George W. Bush on February 1, 2006; it should be noted that all members of the Board of Governors took their current position under the presidency of George W. Bush, Christopher Cox
• "Chairman Of The Securities and Exchange Commission, appointed by George W. Bush August 3, 2005.

One article of the plan gave the extent of making enormous power he represents:

aussi Rosner says full disclosure Is Important Since The bill as it now stands Gives the U.S. Treasury Secretary unchecked Basically power to deal with $ 700 billion in Taxpayer funds. According to Section 8 of the proposal, the decisions are " non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency ."

That "prevents judicial action could allow the protection of decisions that create false marks, hide prior marks, or could be used to prevent civil or criminal prosecution in situations where a management knowingly provided false marks that aided the growth of this crisis of confidence," Rosner said in a note to clients.

Pour se donner une idée du «pouvoir» que représentent 700 milliards de dollars, signalons que c'est une somme supérieure au montant total du budget militaire des États-Unis (651 billion). It is also a sum greater than all the combined military budgets of all other countries in the world. And that would be directly managed by three men named by George W. Bush (that will end its mandate January 20, 2009).

short, is there political risks associated with this plan? The U.S. lawmakers who are reluctant to sign this huge transfer of power they have as ideological and demagogic, or do they have some reason to worry? Is there an effective power-cons expected (or even possible) against the power entrusted to three men?

Christian Chavagneux explains (with an adorable final exclamation point):

In the final version, completed in the night from Saturday to Sunday, the Treasury Secretary is granted the discretion to see who he wants to buy at the price he wants and with the method he wants to risky real estate assets from banks. But then came under fire from four projectors that will scrutinize what it does: A Financial Stability Oversight Board before which must be reported monthly or whenever 50 billion dollars are spent; the Comptroller General, which oversees how the state spends its money, should follow the implementation of the plan, an inspector General Plan is also appointed to follow closely, and finally, a Congressional panel will also follow what happens!

Could it be that the U.S. Congress after eight years of neo-conservative adventurism, still can not find it quite reassuring?