Published: October 03, 2008 04:25 pm      

More on the bailout...

How did our U.S. Senators vote on the Emergency Economic Stabilization Act of 2008 last Monday? The Virginias senators: Byrd, Rockefeller, Warner and Webb voted “yea” for 415 page bill, H.R.1424 on October 1 at 9:22 pm.

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Some interesting tidbits found in Division A of the bill entitled “Emergency Economic Stabilization” gives the Secretary of the Treasury, Mr. Henry Paulson, the authority “to create the Troubled Asset Relief Program (TARP) to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution, on such terms and conditions as are determined by the Secretary, and in accordance with the Act and the policies and procedures developed and published by the Secretary.”

How appropriate, “TARP.” The perfect acronym for a cover up.

The bill also creates the Financial Stability Oversight Board. I believe that may be the problem. We started with “an oversight.” How many times have you heard some say, “I’m sorry, that was just an oversight?”

The bill also requires that a report be submitted to Congress when troubled assets under the authorities provided in the Act first reach an aggregate of $50,000,000,000 and subsequent $50,000,000,000 intervals. And to think the local bank watches every penny of my account and it certainly doesn’t have that many zeros. By the time they spend 50 billion dollars, a few thousand misplaced here and there probably won’t be noticed.

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I don’t think any of us want to see hard working Americans lose their homes. The blame for some of this mess lies with lenders wanting to provide loans that they know good and well that the customer may probably never be able to repay. McMansions are not in the price range most Americans can afford.

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Back to that cover up. Christopher Dodd, the five-term senator from Connecticut, and chairman of the Senate Banking Committee, netted more than $13 million in donations from the financial industry and other supporters. He received more than $6 million from the very sector that needs the bailout.

Dodd denied rumors that many financial institutions were in a financial crisis. He called the firms “fundamentally strong, in good shape” and went so far as to say that to “suggest they are in major trouble is not accurate.”

Now he is in on the fix. Ouch.

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Senator Dodd was involved in issues related to the federal takeover of Fannie Mae and Freddie Mac during the 2008 subprime mortgage crisis. According to one source, “Dodd was the number one recipient in Congress of campaign funds from Fannie Mae and Freddie Mac. Some of his other big contributors included American International Group, Bear Stearns, Merrill Lynch and Lehman Brothers. AIG traded for $98 in December 2000. Last Thursday AIG traded for around $4. All have found themselves floundering in deep water.

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Who runs Freddie Mac and Fannie Mae? Herbert M. Allison Jr., 65, took over Fannie Mae, replacing Richard Syron. Allison worked for Merrill Lynch. Weren’t they in trouble? Politics 101 just kicked in. David Moffit now heads Fannie Mae replacing Daniel Mudd. Mudd and Syron will probably lose over $12 million in salary, stock and bonuses, but will probably keep better that $9 million in pension and retirement benefits.

With this many problems, there needs to be a thorough investigation of their activities and if any wrongdoing is found, they should be punished accordingly. According the Washington Post, Syron has received $14,497,981 in Compensation in 2008. Mudd received $14.7 million in compensation in 2007. Golden parachutes — who needs them when you have pillows stuffed with this much money to cushion your landing.

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There you have it, a few words on items of interest to the Virginias. The skies were fantastic the last few days. I hope you have more blue skies this week and a warm biscuit with apple butter to start your day.

Wilson Butt, a Bluefield resident, is a retired Department of Highways official.