To: Nettime-l
Subject:
The media recently woke up from their election-induced trance to ask where the president has been during the latest stages of the unfolding financial crisis. Bush had become a shadow: impotent, marginalized, deluded, an embarrassment even to his own party, and so on. In his place the odd couple, Paulson and Bernanke, seemed to be running the show; and, as perplexing as that was, it came as a relief. So went the conventional wisdom.
The White House trotted Bush himself out, first for a two-minute talk, then for a nine-minute talk, both of which might as well have been written using Markov text generator. But then came the proposed legislation his administration sent to Congress as its decisive effort to address the unfolding economic meltdown. At 148 lines of text allocating US700B wasn’t enough, the administration will get most of what it asks for again for exactly the same reasons.
This procedural charade shouldn’t disguise what this “legislation” is. The events that led to it show beyond any doubt that the more staggeringly manifest the incompetence of the Bush administration becomes, the more likely it is to get what it wants. What the administration couldn’t accomplish through even its own cynical version of governance, it will accomplish by, in effect, emergency decree.
The details of this “law” won’t matter much, because neither the text nor its consequences will ever be subject to the kind of scrutiny that a normal law might receive. The amounts are too immense, the violations of traditional practice are too extreme, and the phenomena it seeks to address are too baroque and pervasive in their derivative ramifications. US governance systems won’t be any more able to contemplate or manage what’s coming any more than they were able to contemplate the structures — technical, financial, institutional — that precipitated the current crisis. As a result, this legislation is a step in the creation of a provisional framework for a reformulation of the US economy (and therefore US society) for decades to come (and therefore forever).
Cheers, T
http://b1ff.org [dead link]
LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE
MORTGAGE-RELATED ASSETS
Section 1. Short Title.
This Act may be cited as ********************.
Sec. 2. Purchases of Mortgage-Related Assets.
(a) Authority to Purchase.--The Secretary is authorized to
purchase, and to make and fund commitments to purchase, on such
terms and conditions as determined by the Secretary,
mortgage-related assets from any financial institution having
its headquarters in the United States.
(b) Necessary Actions.--The Secretary is authorized to take
such actions as the Secretary deems necessary to carry out the
authorities in this Act, including, without limitation:
(1) appointing such employees as may be required to carry out
the authorities in this Act and defining their duties;
(2) entering into contracts, including contracts for services
authorized by section 3109 of title 5, United States Code,
without regard to any other provision of law regarding public
contracts;
(3) designating financial institutions as financial agents of
the Government, and they shall perform all such reasonable
duties related to this Act as financial agents of the
Government as may be required of them;
(4) establishing vehicles that are authorized, subject to
supervision by the Secretary, to purchase mortgage-related
assets and issue obligations; and
(5) issuing such regulations and other guidance as may be
necessary or appropriate to define terms or carry out the
authorities of this Act.
Sec. 3. Considerations.
In exercising the authorities granted in this Act, the
Secretary shall take into consideration means for--
(1) providing stability or preventing disruption to the
financial markets or banking system; and
(2) protecting the taxpayer.
Sec. 4. Reports to Congress.
Within three months of the first exercise of the authority
granted in section 2(a), and semiannually thereafter, the
Secretary shall report to the Committees on the Budget,
Financial Services, and Ways and Means of the House of
Representatives and the Committees on the Budget, Finance, and
Banking, Housing, and Urban Affairs of the Senate with respect
to the authorities exercised under this Act and the
considerations required by section 3.
Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.
(a) Exercise of Rights.--The Secretary may, at any time,
exercise any rights received in connection with
mortgage-related assets purchased under this Act.
(b) Management of Mortgage-Related Assets.--The Secretary shall
have authority to manage mortgage-related assets purchased
under this Act, including revenues and portfolio risks
therefrom.
(c) Sale of Mortgage-Related Assets.--The Secretary may, at any
time, upon terms and conditions and at prices determined by the
Secretary, sell, or enter into securities loans, repurchase
transactions or other financial transactions in regard to, any
mortgage-related asset purchased under this Act.
(d) Application of Sunset to Mortgage-Related Assets.--The
authority of the Secretary to hold any mortgage-related asset
purchased under this Act before the termination date in section
9, or to purchase or fund the purchase of a mortgage-related
asset under a commitment entered into before the termination
date in section 9, is not subject to the provisions of section
9.
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets
under this Act shall be limited to $700,000,000,000 outstanding
at any one time
Sec. 7. Funding.
For the purpose of the authorities granted in this Act, and for
the costs of administering those authorities, the Secretary may
use the proceeds of the sale of any securities issued under
chapter 31 of title 31, United States Code, and the purposes
for which securities may be issued under chapter 31 of title
31, United States Code, are extended to include actions
authorized by this Act, including the payment of administrative
expenses. Any funds expended for actions authorized by this
Act, including the payment of administrative expenses, shall be
deemed appropriated at the time of such expenditure.
Sec. 8. Review.
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.
Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of
authorities granted in sections 2(b)(5), 5 and 7, shall
terminate two years from the date of enactment of this Act.
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code,
is amended by striking out the dollar limitation contained in
such subsection and inserting in lieu thereof
$11,315,000,000,000.
Sec. 11. Credit Reform.
The costs of purchases of mortgage-related assets made under
section 2(a) of this Act shall be determined as provided under
the Federal Credit Reform Act of 1990, as applicable.
Sec. 12. Definitions.
For purposes of this section, the following definitions shall
apply:
(1) Mortgage-Related Assets.--The term “mortgage-related
assets” means residential or commercial mortgages and any
securities, obligations, or other instruments that are based on
or related to such mortgages, that in each case was originated
or issued on or before September 17, 2008.
(2) Secretary.--The term “Secretary” means the Secretary of the
Treasury.
(3) United States.--The term “United States” means the States,
territories, and possessions of the United States and the
District of Columbia. To top of page