Posted on 09/29/2008 9:51:11 AM PDT by Onerom99
Financial markets in the United States and around the world face a dire emergency requiring urgent and decisive action. Some key parts of the credit market are on the verge of gridlock, resulting not just in the collapse of major financial institutions but also in credit disruption that is severely weakening the long-term prospects of non-financial companies. And while this is currently most visible in Wall Street and in the financial sector, it is only a matter of time before the fallout hits Main Street, with potentially devastating economic effects for typical American households.
Swift action is needed to deal with the "toxic" mortgage-backed securities that are causing credit markets to seize up. The package of emergency steps now before Congress is intended to address that problem and restore America’s credit markets while protecting the taxpayer as much as possible from the cost of dealing with the crisis.
Faced with a crisis of this scale, lawmakers need to consider steps that would be out of the question in more normal times. That is why Congress must structure a recovery plan that involves an extraordinary taxpayer commitment to stabilizing the situation and restoring confidence in the financial system.
While there are those in Congress who would push the role of government far beyond what is necessary in this crisis, the core technical parts of the negotiated package are acceptable. Important protections for taxpayers have been added to the original plan. And while some questionable and potentially counterproductive features have also been added, other egregious proposals—such as enormous handouts to activist housing groups—were stripped away during the negotiations. Taken together, the main financial measures are likely to accomplish the goal, and the unwise measures are sufficiently limited to warrant passage.
Certain provisions are far more troubling, however, and raise serious constitutional concerns. Specifically:
The legislation grants extraordinary powers to the Treasury secretary without providing sufficiently specific direction. The legislation still simply gives the secretary a functional "blank check" of authority rather than sufficient legislative direction as to what constitutes permissible action.
The oversight board contains members not directly subject to or removable by the President, which raises substantial concerns of abrogating the President’s authority under Article II and makes the entire structure thereby less democratically accountable. Both concerns could be (and should be) remedied, first by providing greater guidance and guidelines to the secretary regarding his new authority—sufficient that a reasonable person would be able to determine what acts would be lawful and which acts undertaken by the secretary would be unlawful—and second, ideally, by either removing the oversight board entirely or limiting its role to an advisory one.
Thus serious constitutional concerns remain and should be addressed in putting together a statute to deal with this current and hopefully temporary credit emergency. The constitutional questionability of some provisions is worrying, as is the centralization of power. Nonetheless, the situation is so grave that we must take unusual measures now and accept some negotiated arrangements that remain very troubling, provided they are limited in extent and time and are not accepted as a permanent part of our government.
Stuart M. Butler, Ph.D., is Vice President for Domestic and Economic Policy Studies and Edwin Meese III is Ronald Reagan Distinguished Fellow in Public Policy and Chairman of the Center for Legal and Judicial Studies at The Heritage Foundation.
Horse squeeze ...
you’re calling Horse Sqeeze on the HERITAGE FOUNDATION?? That takes moxie, my friend
Heritage Foundation has my greatest respect. When they talk, I listen.
sw
The article is a cheeleading piece for one of the worst stinking pieces of government intervention in the nation’s history.
It, like the bailout, are horse squeeze. There were other less expensive and more market oriented solutions available ... they were left out.
Would our forefathers have accepted Socialism and enablement of corrupt politicians/businessmen or a depression first?
This is a simple question. Is it permissable to commit theft in order to help the American economy.
In one word, No.
Our forefathers have gone through much more than this in pursuit of Liberty and righteousness.
May God encourage and enable our Congressmen and President to resist this great evil.
Maybe our nation and the world need this shaking.
HAH! Please, get over yourself. You and other blowhard around here don’t know what the hell you’re talking about.
“HAH! Please, get over yourself. You and other blowhard around here don’t know what the hell you’re talking about.”
You have me confused with someone who cares what you think. I don’t.
The bailout proposal has three big problems at a minimum glaring problems.
One is factual. The $700B figure was pulled out of the clear blue sky according to reports on how it came to be.
Two, it continues the perverse practice of bailing out homeowners who are the weakest and most careless borrowers. This pig in a poke doesn’t stop politicians from pandering to whiny, irresponsible borrowers and it fails to penalize business solely without consequences on the real criminals - those in Congress responsible.
Three, America’s stock of bad debt has now gone as far up the tree as it can. It’s all with the government and the taxpayer now. I don’t know what that means for the dollar today, but it can’t be good in the long run. The government’s aim has to be to inflate that debt away, and forget about the consequences.
The whole package is unconstitutional, as there is NO AUTHORITY GRANTED to government to do any part of this, INCLUDING the parts which caused the mess in the first place. There goes ALL my former respect for the Heritage Foundation.
Miss this part? “Taken together, the main financial measures are likely to accomplish the goal, and the unwise measures are sufficiently limited to warrant passage.”
Most people don’t care what anybody says. They are mad as hell, and are willing to trash the entire economy to punish a few people they hate.
Agreed; or worse. Strikes me this "workout" has less to do with fixing the problem than it does taking control of financial markets. The moneychangers fingerprints are all over this pig.
That really is the feeling that I’m getting. It’s really confusing to me. I dont understand how even the “purest” of free market capitalists can refuse to acknowledge the facts on the ground. The REALITY of what this crash would mean would be devistating.
This is the Heritage foundation. It’s not some silly left wing think tank. Heritage is the most conservative and freedom loving group OUT THERE!!! They have surely convinced me.
Spoken like a true believer in nanny state meddling.
Dodd!
Frank!
Raines - criminal charges must happen!
Gerolick - criminal charges must happen!
Johnson - criminal charges must happen!
Obama's complicity must be brought to light!
At one time I joined. Thought they were one of the greatest since sliced bread. Not any more. This bailout package is the biggest rape ever of the American people. The Heritage is now just another one of the good ol’ boys in D.C.
Can you trust anyone these days? Better be very careful. Sad.
This is confusing.
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