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Inquiring minds are listening to Geithner explain to Congress how his plan works. Here is a transcript of a conversation between Rep Gresham Barrett and Treasury Secretary Geithner.
Rep Gresham Barrett: "The last question I have guys, which is the $64 million question or I guess I should say $64 trillion question is: What's the backup plan? If everything fails what do we do? Where do we go from here?"
Treasury Secretary Geithner: "Congressman this plan will work. This plan because of the authority provided not just by Congress but the treasury and the Fed gives us broad ability to do what you need to do to get through a financial crisis like this. It just requires will; It's not about ability. We just need to keep at it. We just need to work with Congress to make sure we do this on a scale that will make it work."
Someone needs to get this Jon Stewart on the Daily show. I think he will have a field day with "It [The Plan] just requires will; It's not about ability." Unfortunately, Geithner's attitude is more scary than it is funny.
Geithner Seeks Expanded Power
It would be hard for Geithner to screw up more badly or to say dumber things. Yet, his counterattack is to seek still more power. Please consider Geithner Seeks Expanded Power to Seize Firms.
The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.Unlimited Plan For Unlimited Arrogance
The government at present has the authority to seize only banks.
Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.
Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG's most troubled unit.
The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.
Notice that the "plan" does not require approval of Congress or the President only a "consultation". What good is that? And why should Congress grant this authority to such an arrogant fool?
Geithner even asks for powers that are unconstitutional such as the ability to break any contract. Getting 2/3 approval from the Fed is no big deal as the Fed and the treasury are in cahoots to rob taxpayers.
And speaking of robbing taxpayers, note that the request would allow the Treasury to guarantee losses, buy assets, or take ownership stakes in whatever it damn well pleased.
Fed Uncertainty Principle
Geithner's actions were called in advance by me, before he was even appointed. Please consider the Fed Uncertainty Principle, written April 3, 2008. Simply substitute "Fed and Treasury" where I previously said "Fed".
Uncertainty Principle Corollary Number TwoInquiring minds referring to the article will note that corollaries three and four pertaining to illegal actions and repeating past mistakes, also apply.
The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.
In Geithner's Galling (and Dangerous) Plan For Bad Bank Assets I said "Tim Geithner is the most dangerous man in America, and Obama is too blind to see it."
If you did not believe it then, hopefully it is obvious now.
Congress Needs To Censure Geithner
Congress should not just deny Geithner's request, Congress ought to Censure Geithner and ask Obama to accept Geithner's resignation.
Mike "Mish" Shedlock
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