Bailout is just the beginning

[notoc]

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RAMSTACK: Bailout is just the beginning

 Monday, October 6, 2008

As the ink dries on the economic bailout bill approved by Congress last week, questions already are arising about what the courts will do to the legislation.

The bailout lets the courts decide disputes over whether the Treasury Department properly administers the buyout of bad mortgages and debt, then tries to recover some of the money.

As envisioned by Congress, judicial review is supposed to be a technical matter to resolve routine disputes.

Courts can overturn Treasury Department actions if they are "arbitrary, capricious, an abuse of discretion or not in accordance with the law," says the language in Section 119 of the Senate bill.

Less certain is whether the Supreme Court or a lower federal court might say Congress overstepped its constitutional authority with such sweeping economic regulation that touches on everything from contracts of major corporations to homeownership of private citizens.

"Word from our folks here is that it's hard to know," said a Senate Judiciary Committee aide, who asked not to be identified.

Under the Constitution, the government is required to provide corporations or individuals with rights to challenge any action by authorities to take their money, property or interfere with their private contracts.

Congress tried to protect those rights with the judicial review provisions in the bailout bill.

"That may reduce the likelihood that the courts would strike down those purchases [of bad debt by the Treasury Department] as an unconstitutional taking," said the Senate aide.

Members of Congress were aware of a potential conflict with the courts during debate on the bill. After reviewing Treasury Secretary Henry Paulson Jr.'s proposal that left out judicial review, Sen. Christopher Dodd, Connecticut Democrat, said during a Senate Banking Committee hearing, "I can only conclude it is not just our economy that is at risk but our Constitution as well."

So far, the Supreme Court has largely stayed out of economic regulation by Congress.

Historically, that has not always been true.

During the Great Depression of the 1930s, the Supreme Court struck down much of Franklin D. Roosevelt administration's National Industrial Recovery Act designed to jump start the economy. The court said the act gave too much power over commerce to the executive branch of government.

The Supreme Court ran into one major conflict with the Bush administration this summer in the Boumediene v. Bush case. The court said a Bush administration policy that denied Guantanamo terrorism suspects a right to hearings was unconstitutional.

Even if the courts do not override Treasury Department decisions on administering the bailout, private lawsuits create other hurdles for the legislation.

Conservatives argue the U.S. Constitution seeks to limit the role of government in citizens' economic lives, not expand it by cushioning the banking system.

Although they have not yet filed lawsuits to challenge the bailout, few doubt they are coming.

"It's a big country and a lot of people, and they all reserve the right to file whatever they want," said Mark R. Filip, U.S. deputy attorney general. He spoke last week during an American Bar Association conference at an Arlington hotel on new policies the Justice Department is using to prosecute fraud cases.

There are 42 government task forces pursuing more than 1,300 mortgage fraud cases against "institutional actors" nationwide, Mr. Filip said.

The investigations already have led to indictments against two executives of financial firm Bear Stearns.

"We will take the facts where they lead," Mr. Filip said.

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[ivanm]

I try to be optimistic about the outcome of this thing, and I still have faith that the government will do what is correct and in the best interest of the general welfare and not in the interest of only the corporate hogs who have made these bad business decisions.

When an individual commits fraud or theft it is entirely reasonable for the government to exact punishment, even confiscate his assets.  So what is so wrong about cleaning house on these corporate crooks.

I realize that overzealous and maybe even crooked public servants can get carried away, but we wouldn't be in this situation if the financial sector had toed the line and made proper decisions.  So if we are looking for a scapegoat then let's not start with the government.  It is our last resort to clean up this stinking mess, short of massive defaults and world wide financial  misery. 

Let's give the gubmint a chance to do what is right and piss on the rights of the damned crooks who got themselves in the crack they are in. I have simply heard enough government bashing this week.

And notoc, bless your heart, America is not England, and we will clean our doorsteps someday so be patient. Give us a break because we the voters are also at fault for entrusting our financial welfare to a bunch of eightballs and greedy crooks. 

[makesensepleas]

notoc,                                    Does this bailout do anything tn help Americans pay their bills.  If Americans can't pay their bills, there will be no money for those invisible hands to steal.                                                     We have to fix our economy from the bottom up.. 

[Michael]

Someone going to do something about the corporate crooks? 

I think the early inception of the "corporate takeover" concept was designed to justify taking the whole country over from the Apache. 

Now...the U.S. has to take over ITSELF/CORPORATIONS in order to take care of its financial business? 

Providing an individual or corporation with the right to challange any authoritive action doesn't mean that it will WIN against it. 

Either provide for a fair and honest dictatorship, or keep adding amendments to the constitution to try and keep the pile of crap from collapsing under its own weight.  Like putting band-aids on an infection...when only a complete amputation will save the life.

[notoc]

notoc,                                    Does this bailout do anything tn help Americans pay their bills.  If Americans can't pay their bills, there will be no money for those invisible hands to steal.                                                     We have to fix our economy from the bottom up.. 

It's all so easy, makesensepleas... all anyone has to do is promise that you will not lose a cent. So, 300 trillion dollars is printed so that not a single American will lose a cent. If there was 1000 trillion dollars in circulation before the 300 trillion was printed then that means each and every dollar has just been devalued by one third.

But it gets better... that 300 trillion of newly created money will be leveraged 30 times before it ever hits EVERY main street in the world... so, the average US citizen loses a third of his real wealth while the rest of the world stupid enough - or forced to hold US dollars will lose 30 x that amount.

If i control the 'value' of your currency, then I control the value of your savings, the value of your labour, the and the value of your future... The FED controls exactly that. Think about it... the FED controls the wealth of ANYONE who uses US dollars.

Oil is sold in dollars... imagine if it were not.

[lucy]

We have oil resources that can be developed if those who hold the puppet strings would think about the people of this country instead of their own gains for a change....with so many deeply invested in foreign oil, etc.. they are the ones who stand to lose the so-called value of those investments should the price of oil drop dramatically. It has been quite a ride...over a century of oil, money to be made, wars fought over resources, etc...among other things....

Freedom means little if one's life is endangered by greed and graft and power-hungry who cannot stand the thought of others "sharing" wealth if it means one smidgen less for themselves, regardless. And I am not talking about welfare through the government, for that is very much a means of control as well...imo.

[makesensepleas]

America would be in deep doodoo.  The rest of the world seems to be rething its' relationship with the American dollar.                                                                 Greed and arrogance are placing unjust sanctions on the backs of Americans.

[Michael]

It's all so easy, makesensepleas... all anyone has to do is promise that you will not lose a cent. So, 300 trillion dollars is printed so that not a single American will lose a cent. If there was 1000 trillion dollars in circulation before the 300 trillion was printed then that means each and every dollar has just been devalued by one third.

But it gets better... that 300 trillion of newly created money will be leveraged 30 times before it ever hits EVERY main street in the world... so, the average US citizen loses a third of his real wealth while the rest of the world stupid enough - or forced to hold US dollars will lose 30 x that amount.

If i control the 'value' of your currency, then I control the value of your savings, the value of your labour, the and the value of your future... The FED controls exactly that. Think about it... the FED controls the wealth of ANYONE who uses US dollars.

Oil is sold in dollars... imagine if it were not.

I think you might be right about that.  What good is it to not lose any money if it is rendered closer to useless? 

Thanks for that info in general.

[Hollybaere]

Oil is sold in dollars... imagine if it were not.

Now, you are getting part of why the Bush Regime invaded Iraq and why it still wants to invade Iran also.

Before the invasion, Saddam Hussien wanted to start selling oil in Euros and Iran is still considering to do the very same.

You think the U.S. economy is bad now??