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May 24, 2012
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Jewish World Review
Dec. 9, 2008
/ 12 Kislev 5769
Incompetents who are fancied as experts are ruining this country
By
Ed Koch
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http://www.JewishWorldReview.com |
I have no doubt that Congress will bail out the automobile
industry. The same fears of economic collapse that caused Congress to
pass the $700 billion bailout bill now known as TARP (Troubled Asset
Relief Program), after the House of Representatives first rejected it by
a vote of 228 to 205, will now produce rescue legislation for Detroit.
As we now know, six weeks after the President signed the
TARP bill into law, Secretary of the Treasury Hank Paulson told the
nation that he had essentially sold the Congress and the nation a bill
of goods when he said that the U.S. Treasury would be spending the
bailout money to buy the toxic assets of lending institutions in order
to get them to lend money once again. Instead, the Treasury would take
equity positions in the largest of the U.S. lending institutions which
under the Treasury's definition included the largest insurance company
in the world, AIG, which ultimately received $306 billion dollars from
the bailout fund.
Congress only authorized Paulson to spend half of the $700
billion bailout fund and to come back to Congress for permission to
spend the balance. However, with all of the publicly announced Treasury
actions, including the recent bailout deals made with Citibank, it seems
to me the Treasury Secretary may have invaded the second pot of bailout
funds. Secretary Paulson is apparently not subject to FOIL requests, so
attempts by the media to ascertain the amounts and conditions of loans
made have been rejected. According to a recent press statement, the
Secretary still has $15 billion uncommitted, and he said he wanted to
leave the balance of $350 billion for the incoming Obama administration
to disperse.
I have lost total faith in the Secretary of the Treasury,
his boss, President Bush, and the Congress, on their capacity to handle
the economic crisis we are in. Interestingly, Congress that is the
House of Representatives and the public opposed and then supported
bailout legislation, because we were warned by Paulson and the country's
foremost economic experts that if the Congress did not pass it, the
country would be headed for a crisis not seen since the Great
Depression. And here we are having passed the bailout still staring the
Great Depression in the face.
It was madness to pass the bailout: proving the point that
decisions made out of panic rarely, if ever, result in responsible
outcomes. It has also been established, at least to my satisfaction,
that the so-called experts don't know what they are doing and they are
the same experts who were in charge when we got into this mess.
Interestingly, according to the New York Times of November 26th, "In the
last year, the government has assumed about $7.8 trillion in direct and
indirect financial obligations. That is equal to about half the size of
the nation's entire economy and far eclipses the $700 billion that
Congress authorized for the Treasury's financial rescue plan."
We are apparently going to repeat the same error we
committed when we authorized the first bailout of financial
institutions. This time, we will be bailing out the three automobile
companies -- GM, Ford and Chrysler. The people to whom we are requested
to give the additional billions -- they first asked for $25 billion and
are now asking for $34 billion are the same people who ran these
companies into the ground. I have absolutely no confidence in their
ability to turn things around. All should remember Chrysler is a
private company, whose owners thought they bought the company cheap from
Daimler, and now want the taxpayers to bail them out. Instead of
bailing the automobile companies out, let them go into bankruptcy and
either work their way out in Chapter 11 or be sold off in bankruptcy.
There is no shortage of solutions proposed for our financial
troubles. One is to let the judges in bankruptcy redesign the terms of
the mortgages before them -- which currently they are not permitted to do
allowing for lesser interest and longer total terms, and in the
meanwhile, enact whatever laws are constitutional that would bar
foreclosures from proceeding for at least a year so as to give the
government the time needed to work out whatever other remedies are
needed.
With respect to the car industry, someone has suggested we
give any taxpayer who buys a totally American-made car -- allegedly the
Big 3 make cars that are deemed to be more American than those
manufactured by Toyota in the U.S. which imports more parts a $5,000
or more tax credit on their tax return in the upcoming year, 2009. If
this proposal sounds whacky -- I wish I had thought of it it is less
improvident than the proposals of the so-called experts.
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
JWR contributor Edward I. Koch, the former mayor of New York, can be heard on Bloomberg Radio (WBBR 1130 AM) every Sunday from 9-10 am . Comment by clicking here.
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