If It Smells Like A Pig, And It Oinks Like A Pig ...

it probably isn't a carefully considered plan to navigate the country and the world through a complex and historic financial crisis.

WASHINGTON — The Bush administration on Saturday formally proposed to Congress what could become the largest financial bailout in United States history, requesting unfettered authority for the Treasury Department to buy up to $700 billion in mortgage-related assets.

The proposal, not quite three pages long, was stunning for its stark simplicity. It would raise the national debt ceiling to $11.3 trillion. And it would place no restrictions on the administration other than requiring semiannual reports to Congress, granting the Treasury secretary unprecedented power to buy and resell mortgage debt.

Yes, the proposal is to give Hank Paulson a blank check for $700 BILLION, to spend as he chooses, with no review or appeal.

That's it. That's the plan. More money than any other single plan in history, with no review, no counter-signing, no means to contest a bad decision. I'm sure Secretary Paulson is a pleasant fellow, and he seems to have done a not-incompetent job so far, which, considering he is a member of this administration is saying a lot. Still, authorizing him to have $700,000,000,000.00 seems like a lot of trust.

Add language like

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.

I have to say, "Are they f'ing kidding me?"

For one thing, this is the Bush administration, who brought us such phenomenal achievements in good governance as the war in Iraq, the Patriot Act, the conversion of the Department of Justice into a Republican internship program, the response to Hurricane Katrina, the evaporation of the Clinton surplus, and, lest we forget, the very mess we find ourselves in right now.

Remember how they rushed us into Iraq, and they scared everyone into giving them a blank check, and they got the Democrats in Congress to sign up because, well, weapons of mass destruction are very scary and intelligence is very complicated and OMG we need to do this right now!!! or we'll wake up to a mushroom cloud? Remember how we've spent years trying to undo the sweeping powers we gave them in the Patriot Act after 9/11?

I'm not saying that we aren't in a financial crisis at the moment, though we pretty clearly weren't actually in a security crisis in the run-up to Iraq. I'm just saying these aren't guys who can be trusted with a lot of power, and particularly not when they ask for it in a lump sum, in a hurry, in a moment of crisis, real or invented.

Second, even if they had a history of super decisions and competence and hadn't steered the bus into this ditch already, couldn't they come up with a better first draft of a system then "Uh, give the money to Hank and let him pass it out?" Seriously? Not even, well, Hank gets to spend the first $25 billion, but he has to get Bernanke to co-sign for anything larger? They are seriously proposing access to $700,000,000,000.00 with fewer controls than on petty cash boxes all over America?

Would it have killed them to, just to be polite, have included language asking for the approval of, say, the House and Senate Banking Committees, maybe with some special new 24-hour turn-around rule? Just, you know, to act as if they remembered it was the people's Treasury they were robbing taking the money from? Could they have at least said, "please?"

Third, what does this plan purport he should do with the money? What do we, as taxpayers get? Do we take ownership of the banks, like we did during the Savings & Loan crisis (Keating who? But I digress...)? Do we get a retroactive tax on the huge payments taken home by the CEOs of these firms, or any kind of punishment or recompense for the trouble we're going to cleaning up their mess? Do firms which get one of these buy-outs have to dissolve, or convert to nonprofit status, or something? Do we get a new regulatory scheme in which it is impossible to make bogus mortgage loans, or to repackage them? Do we maybe get the requirement that the firms, in exchange for us taking the toxic waste off their hands, invest 10% of their gross incomes for the next ten years to fund affordable housing projects in towns across America? Anything?

Nope. We get a big bag of stinking toxic sludge, while they get to go off happily, singing and saying "See ya, suckas!"

And is $700,000,000,000.00 a reasonable amount for this stinking bag? Who knows? If anyone had the ability to accurately assess the worth of those 'securities', they wouldn't be toxic sludge. We're supposed to let Hank decide what's a fair price, I guess. Maybe he'll use his Magic 8 Ball, or something.

I don't pretend to be an economist. I'm just a smart guy who can ask some simple questions, and can sense when something smells funny.
However, this guy is an economist, and he thinks it's bogus too.

The President wants Congress to pass this plan next week. Barney Frank and the Democrats are making sounds like they'll try to dress it up with some language about protecting homeowners or something, which is scary. This plan should be a non-starter. I don't want Barney Frank to say, "We need to add to it," I want him to say "Ha-ha. No, seriously, what's your plan?"

Tell your Congresspeople to take a deep breath so they don't act in haste and repent in leisure. The administration's economic braintrust really needs to scrap this proposal and start again.

Update: See also: The Shock Doctrine.

Update 2: Oh, joy. The full-court press is on. From the Wall St. Journal via TPM:

House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don't load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed.

"We're opposed to adding provisions that will affect [or] undermine the deal substantively," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation's largest banks, securities firms and insurers.

A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.

They have no shame. They are addicts, and they just want the government to give them money. They just want the money. 'Just give us the money. MONEEEEEYYYY!!' (Picture zombies in wing-tips here.)