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Bailout oversight -- oh, well.

Remember how the oversight mechanisms were one of Congress's big contributions to Paulson's original three-page bill? See this Washington Post article by Amit R. Paley:

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

"It's a mess," said Eric M. Thorson, the Treasury Department's inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. "I don't think anyone understands right now how we're going to do proper oversight of this thing."

...

The legislation also created a body called the Financial Stability Oversight Board, whose five members include Paulson and Federal Reserve Chairman Ben S. Bernanke. But it has no staff of its own, and few expect that policymakers can conduct oversight of themselves. "It's sort of a joke in terms of oversight," a congressional aide said.

smitty1e:
And this is surprising how, exactly?
Thieves and boobs got us into this.
I don't know why we'd "hope" that throwing more loot at the same thieves and boobs would "change" anything.
Can't we at least have entertaining farce?
11.25.2008 10:54am
Crust (mail):
Eric, I'm not sure if you're still reading comments to your Iraq as humanitarian success post, so forgive me for going off-topic. You may want to reply to Tim Lambert who has gone into the details of some of the numbers you used for mortality in Iraq. In particular he notes that the Iraq Body Count numbers for violent deaths are very likely underestimates and on child mortality he writes:
All published sources, including the one Posner cites, show that there has been no decrease in child mortality after the invasion, and most actually show an increase.
11.25.2008 11:09am
Anderson (mail):
My initial, paranoid reaction to the $700B bailout was that the Republicans in the White House were seizing the last opportunity (for a while) to write checks to Wall Street on the taxpayers' account.

But I decided that was too partisan and shrill.

Since then, with exhibit Q or thereabouts being the Citigroup handout, I am beginning to trust my first reaction.

Dems getting played ... is that even a page one story? Not any more, if ever.
11.25.2008 11:38am
PLR:
Back to the oversight question, are there any Democrats out there who can convince me that either Pelosi or Reid is a competent leader? Can we put Waxman and Durbin or Schumer in those offices and see how they do?
11.25.2008 11:43am
Crust (mail):
Oh well, indeed. And it's not as if $700 billion is the whole story here either, not that more than $2000 per American is chump change.

A modest silver lining: At least Congress struck Paulson's get out of jail free card from the original proposal:
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.
So we can at least hope that he will feel compelled to follow applicable laws.
11.25.2008 11:58am
devil's advocate (mail):
So here even procedural oversiight is nil, nevermind substantive cabin of the unelected agency types by good legislative drafting.

This is concedely different than the 4th branch model of civil service toilers with an agenda forcing rules and regulations on us almost without regard to their executive, never-mind legislative masters. Paulson was subject to confirmation and this is a high profile appointment and focus on results may give a sense of accountability, e.g., if things don't go well Geitner goes overboard, it's too late for Paulson.

And of course Treasury and the Fed are only confiscating our money via the spending power, i.e.,implictly using the taxing power or inflation of the money supply to pay for it. So if the law isn't a positive regulation of our own behavior or conduct, do we have standing to challenge it -- nevermind the self insulating ban on equitable relief except under constitutional theory contained in the law.

While people have offhandedly, and largely correctly, said the law gives the Treasury Secretary virtually unchecked discretion to spend,ironically I think that the secretary may have managed to execute a plan that falls outside even the vast boundaries of the congressional delegation.

The enrolled version of H 1424 Sec 3, Definitions, "Troubled Assets", subparagraph B reads:

(B) any other financial instrument that the Secretary,
after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market
stability, but only upon transmittal of such determination,
in writing, to the appropriate committees of Congress.


I don't know if the Secretary transmitted his determination regarding these preferred issues he acquired at gunpoint from banks (albeit some were surely like Brer Rabbit in their objection to being thrown in that briar patch). But I tend to think that these preferred issues are a close call as far as the plain language of the statute.

While it does say "any other financial instrument", it is defining "troubled assets", as in past participle, past tense. These cannot be troubled assets under contemplation of the bill because they did not exist when the bill was written!

Silly me. But there is no available challenge unless some clever barrister about these parts knows how to bring a non-monetary non-equitable claim for relief. Could someone claim harm and demand money such that a judgment might compell different behavior from the government? Or what other way might at least an implicit challenge that compares the secretaries actions to the language of the law be brought?

Or forgetting the sophistry and getting down to the constitutional problem that dare not speak its name, I still think this whole thing the ripest non-delegation challenge to come along in a while. Because there is essentially no oversight, no notice and comment, the things that normally raise the courts concerns about agency actions are present.

Under normal circumstances, the court would ignore the delegation problem, and get at the rigor of the agencies fealty to the statute by changing the standard of review. I highly doubt the court would grant Chevron deference to the secretary in a stautory interpretation challenge. But as mentioned in previous paragraphs, the only challenge available is constituional. Might the courts finally recognize that the 'standard of review' is often an administrative law surrogate for non-delegation, and its time to get on the real horse again.

Even if they won't, the public might actually understand what non-delegation is about with all this king-making. Of all those I buttonholed in this regard at the fed-soc meeting only Bob Levy was animated. Everyone else saw standing problems or feared the precedent of failing.

I don't know how the courts failure to rein in adminstrative agencies could get any worse. Still some thought, well at least they will only go this crazy in an "emergency" so if we litigate the background questions of law and loose, that will encourage them to do the same thing when there is no emergency. I ask you, when is there no emergency in the mind of government?

We must fight now, or retreat to the cloisters like the Irish monks who preserved knowledge of western civilization and simply nuture a memory of what freedom was that might re-emerge in 3 or 4 generations.

Brian
11.25.2008 12:07pm
Bob from Ohio (mail):

Dems getting played ... is that even a page one story?


They werent't "played", they were in on the scam. The "oversight" was always window dressing.

Who was the leading economic figure of the Clinton Administration? Where does he work now?

Who is O's new treasury secretary? What is his role now?

Both parties love Wall Street because they both get lots of money back.
11.25.2008 12:14pm
Bob from Ohio (mail):

So we can at least hope that he will feel compelled to follow applicable laws.


He He. Good one. He won't be there after January 20.
11.25.2008 12:18pm
PLR:
Who is O's new treasury secretary? What is his role now?

He is the least visible member of the bailout trio (Bernanke, Paulson, Geithner). And of the three, he is the least connected to Wall Street.
11.25.2008 12:20pm
Mhoram:
Only seven comments to start laying the groundwork to blame it all on Obama.

Of course, it only took four comments to blame Nancy and Harry.

What's the over-under on the number of comments before someone blames the lack of oversight on Bill Clinton or Jimmy Carter?
11.25.2008 12:43pm
Ryan Waxx (mail):
Of course, it only took four comments to blame Nancy and Harry.


You mean the people in charge of the majority party in both the house and senate? Why on earth would anyone think they had anything to do with a bill that came out of their houses? That's crazy talk!
11.25.2008 1:39pm
Alexia:
I am constantly confused by the people who are blaming the bailout on the Republicans. I was watching, horrified, and I seem to recall that the Democrats had enough votes to pass it but then they stated they wanted more Republicans to vote for it so it would be a bi-partisian action.

Pelosi, Frank, Reed and Dodd were in the photograph that I associate with their "victory."

Has our attention span really become that short?
11.25.2008 1:49pm
Cornellian (mail):
Hmm, executive branch claims sudden emergency requires it to exercise vast, unreviewable powers in the national interest. We've been down this road before.
11.25.2008 2:06pm
beyondgreen:
Not enough credit is being given to the high gas prices this past year and it's serious damage on our economy and society. That one factor alone has caused serious stress in both individuals and businesses. A record number of homes and jobs have been lost as a direct result. And, while we are doing the happy dance around the lower prices at the pumps OPEC is announcing cuts to manipulate the prices upward again. We must get on with becoming energy independent.We can't take another year like this past. There is a wonderful new book out about the energy crisis and what it would take for America to become energy independent. It covers every aspect of oil, what it's uses are besides gasoline, our reserves, our depletion of it. Every type of alternative energy is covered and it's potential to replace oil. He even has proposed legislative agenda's that would be necessary to implement these changes along with time frames. This book is profoundly informative and our country needs to become more informed and move forward with becoming energy independent. Green technology would not only provide clean cheap energy it would create millions of badly needed new jobs. The Book is called The Manhattan Project of 2009 Energy Independence NOW. Our politicians all need to read this book. www.themanhattanprojectof2009.com
11.25.2008 2:11pm
Anderson (mail):
They werent't "played", they were in on the scam. The "oversight" was always window dressing.

You may well be right about that too.
11.25.2008 2:23pm
smitty1e:
@Ryan Waxx:
Why settle for less than FDR, and the seeds of doom he planted?
11.25.2008 2:42pm
sonicfrog (mail) (www):
I bolgged about this a week ago. My favorite excuse for not appointing anyone to oversee the bail-out....


the Congressional Budget Office, which also has some oversight responsibilities, is worried about the difficulty of hiring people who can understand the intensely complicated financial work involved.


You mean not one of the millionaires on Capital Hill knows a capable accountant?
11.25.2008 8:12pm
Bill McGonigle (www):
$800,000 per household in new debt? What could possibly go wrong?

Just wait, they're going to monetize the debt in the next few years ... currency FAIL.
11.26.2008 5:27pm

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