The White House is also adopting the same divisive strategy it used in promoting Obamacare. It has picked scapegoats to vilify, "big Wall Street banks" (you will recall Obama has called them "fat-cat bankers"), and pitted them against the American people, saying they want to preserve the "status quo." Jen Psaki explicitly framed the debate in those terms on the increasingly partisan White House blog. Check it out.
Initially, even many Democrats were skeptical, such as Rep. Brad Sherman, who called the plan "TARP on steroids" and told Geithner, "You've got permanent, unlimited bailout authority." "Permanent," to be sure, which is why Horowitz dubbed the bill "PARP."
Among the Republicans' concerns about the plan is that it would create a Consumer Financial Protection Bureau with autonomous rule-making authority and the power to examine firms with $10 billion in assets. The bill would also create a new $50 billion fund to be used to "restructure" firms in emergency financial predicaments. According to Heritage Foundation expert David C. John, the bill would give the government "open-ended" power to "exercise discretion" based on "unspecified factors" to determine whether firms represent a "systemic risk." Think about that. A vast new bureaucracy subject to political pressures, not the bankruptcy courts, would be making these vital decisions without clearly defined standards. We musn't saddle the rule-makers with rules.
Imagine the temptation a statist-run administration would have under such broad authority to step in and break up firms on its whim or take control of them and inject them with funds subsidized by a punitive tax -- with the Orwellian label "Financial Crisis Responsibility Fee" -- on big banks. The banks will foot the bill simply because the Obamacrats believe that profitable concerns should be punished for their surplus values. Just more "spreading the wealth around."
John argues the bill would incentivize banks to make unsound loans because it would remove the checks and balances creditors normally provide by, for example, demanding higher interest rates on loans from highly leveraged institutions. If the banks were not allowed to fail, the creditors would be more willing to lend to them. Wasn't it "uncreditworthy" loans mandated by do-gooder Democratic policies that largely led to the financial meltdown in the first place?
Be on notice: Rapacious Obamacrats are hellbent on shoving this bill through. Even at the risk of being mowed down, we must vigorously oppose it.
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