Libertarians for Ron Paul

“Constitutional experts have concluded that that the $700 billion bailout bill is an unconstitutional delegation of power, in violation of constitutional separation-of-powers safeguards.  I earlier reached the same conclusion in pronouncing the bill “dangerous, inflationary, unnecessary, and unconstitutional.”  One of the experts calling its constitutionality into question is Civil Rights Commissioner and Heritage Foundation scholar Todd Gaziano, a separation-of-powers expert who, as a Justice Department lawyer in the Clinton and Bush administrations, “developed the argument adopted by the Supreme Court in Weiss v. United States, 510 U.S. 163 (1993) to uphold the constitutionality of judges detailed to hear cases in the military court system.”  Gaziano and Andrew Grossman argue that the bill is likely unconstitutional because it lacks meaningful standards and bars judicial review.”

Full Post by Hans Bader @ http://www.openmarket.org/2008/09/25/bailout-bill-is-unconstitutional-delegation/

Reason Magazine is the flagship periodical of libertarians. They have published many good pieces on the folly of the Bush Bail-Out Proposal. Here are links to a few:

Hank Paulson’s Countdown to Armageddon by Tim Cavanaugh http://www.reason.com/news/show/129005.html

Bailout Bums by David Weigel http://www.reason.com/news/show/129017.html

The Case Against the Bailout by Steve Chapman http://www.reason.com/news/show/129020.html

No More Bailouts! by Anthony Randazzo http://www.reason.com/news/show/128972.html

“Anger is on the rise all across the country concerning the proposed government bailout of the mortgage industry. The $700 billion dollar price tag, at a time when Americans are already suffering from ionospheric fuel and food prices and are awaiting winter heating bills with trepidation, has stirred resentment among those whose taxes will have to foot the bill for such extravagance.”

“In recent weeks, the taxpayer has already been forced to accept responsibility for Fannie Mae, Freddie Mac, and AIG (not to mention regional banking colossus Indymac), on assurances that, as Depression-era federal hucksters used to say, “prosperity is just around the corner.” Yet with each new federal intervention in the crisis, another shoe of the ailing financial centipede drops.”

“According to reports, angry Americans are not taking this latest outrage lying down. Lew Rockwell of the Ludwig von Mises Institute reported on his website lewrockwell.com that “terrified oligarchs” on Capitol Hill are “being inundated by calls, emails, and visits from their very angry constituents.” ”

full colum by Charles Scalinger @ http://www.thenewamerican.com/economy/economics-mainmenu-44/376

“In the name of restoring economic confidence, the Bush administration is demanding unlimited authority to implement a massive financial bailout. The Secretary of the Treasury would become an economic dictator, empowered to re-engineer the economy as he sees fit. These powers fit Kim Jong-il’s North Korea, not the American republic.”

“The economy is in trouble, but the wrong policy could make things much worse. With the public deeply divided over the proposed bailout, and the future structure of our economy at stake, Congress must stop and take a deep breath before rushing such a far-reaching plan into law.”

Full column by former Congressman Bob Barr http://www.huffingtonpost.com/bob-barr/the-bailout-from-hell-mus_b_129190.html

“For the second time in six years, the Bush administration has asked Congress for nearly unlimited authority without an independent professional review of the evidence that led the administration to request such authority.”

“In making the case for the Iraq war resolution, according to Senator John D. Rockefeller, “the administration repeatedly presented intelligence as fact when it was unsubstantiated, contradicted or even nonexistent. As a result, the American people were led to believe that the threat from Iraq was much greater than actually existed.” ”

“As it turned out, of course, no “weapons of mass destruction” were ever discovered.”

“The skeletal proposal for the Troubled Asset Relief Program states that “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. The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this act without regard to any other provision of law regarding public contracts” – again without an independent professional review of the evidence that led the administration to request such extraordinary authority.”

“In both cases, the administration requested urgent congressional approval of these measures when members of Congress were anxious to go home to run for reelection. And a final irony: the total direct cost of the Iraq war to date has been about $700 billion, the same amount that the administration has requested to buy bad mortgages.”

Commentary by William Niskanen, President of The Cato Institute http://www.cato-at-liberty.org/2008/09/25/another-700-billion/

“Mr. Chairman, I believe that our economy faces a bleak future, particularly if the latest $700 billion bailout plan ends up passing.  We risk committing the same errors that prolonged the misery of the Great Depression, namely keeping prices from falling.  Instead of allowing overvalued financial assets to take a hit and trade on the market at a more realistic value, the government seeks to purchase overvalued or worthless assets and hold them in the unrealistic hope that at some point in the next few decades, someone might be willing to purchase them.”

“One of the perverse effects of this bailout proposal is that the worst-performing firms, and those who interjected themselves most deeply into mortgage-backed securities, credit default swaps, and special investment vehicles will be those who benefit the most from this bailout.”

Full Statement @ http://www.campaignforliberty.com/blog/?p=606

“As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
 
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses.  Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
 
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If  taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
 
3) Its long-term effects.  If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private capital markets have brought the nation unparalleled prosperity.  Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted. 

Full petition and list of Economists @ http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm

“Members of Congress are being exhorted to stampede, like lemmings in reverse, away from a postulated cliff. But some of the economic geographers who say they know that the cliff is there, and that the economy will plunge over it if Congress stops to think before empowering the secretary of the Treasury to control the flow of capital through the veins of American capitalism, are some of those experts who said in March that prophylactic federal intervention in the matter of Bear Stearns was necessary to contain the crisis.”

“Everything that has been done for the last six months has been done to cope with what previous actions were supposed to prevent.” full column by George Will @ http://www.realclearpolitics.com/articles/2008/09/paulson_be_fourth_branch_of_go.html

“Forget AIG for a moment. Forget Freddie and Fannie, Merrill Lynch, Bear Stearns, and Lehman Brothers. Imagine a company much bigger. Imagine a company that at the end of this year will have spent $400 billion more than it has taken in. Worse, imagine that the company’s accounting is so bad, the $400 billion doesn’t even begin to cover the whole of this company’s liabilities.”

“In fact, the company deliberately chooses to use what’s known as “cash accounting” rather than the more accurate accrual accounting. Cash accounting looks at how much cash the company has on hand, regardless of future liabilities. It’s like saying if you have $75 dollars in your checking account right now, you’re $75 in the black, never mind that you’ve deferred your car payment, quit your job, and have a rent check due at the end of the month.”

“The company also practices dirty accounting tricks like “forward funding,” “advance funding,” and “delayed obligations,” deceptive tricks that hide its precipitous finances from auditors and its investors.”

Radley Balko explains the role of statism in the economic crisis http://www.reason.com/news/show/128988.html

“In truth, the impending legislation merely formalizes powers already usurped by Paulson and Ben Bernanke over the past few months.With the growing financial turbulence, both the Federal Reserve and the Treasury Department have been exercising unconstitutional, quasi-dictatorial powers, including the bailouts of AIG and Bear Stearns and the nationalization of Fannie Mae and Freddie Mac — all this in addition to the Fed’s arrogation of authority to issue credit lines to investment banks and a whole range of new “tools” to pump money into the economy (read: inflate and devalue the U.S. dollar).”

“As the Monitor article noted, Paulson is only the most public of three individuals colluding to expand the powers of Treasury and the Fed independent of congressional (much less public) oversight. The other two are Ben Bernanke, the Chairman of the Federal Reserve; and Timothy Geithner, chief of the New York Federal Reserve Bank.”

“To be sure, the new powers the bailout will confer on these three men are both historic and unprecedented. Although the news media have been focusing on the outrageous and unaffordable $700 billion price tag, the real story is the violence that such an act will perpetrate against our whole system of government.”

Full column by Charles Scaliger @ http://www.thenewamerican.com/economy/economics-mainmenu-44/374