In the tax someone else mentality that we in the US find ourselves. Why should we care about the craziness that we find ourselves in today.
As we all know the Treasury Secretary Henry Paulson announced the government will lend Fannie and Freddie money, will purchase their mortgage-backed securities, and will buy up to $200 billion in preferred stock to keep the companies afloat. With the Treasury committing up to $200 billion of taxpayers’ money for direct investment in Fannie Mae and billions more for loans to the companies and purchases of their mortgage-backed bonds. Freddie Mac is now asking for an injection of $13.8 billion in government aid after posting a massive quarterly loss.
We were told that TARP was essential if the American economy was to survive. The US Treasury said that it had hired accounting firms PricewaterhouseCoopers and Ernst & Young to help with its emergency buyouts of toxic assets from troubled financial institutions. The contracts were awarded as part of the government's new 700-billion-dollar TARP to bail out financial firms saddled with soured assets related to falling US home prices. The Treasury Secretary announced that he has shelved the original plan to buy troubled mortgage assets via the recently approved $700 Billion TARP. The Treasury said it had selected PricewaterhouseCoopers and Ernst & Young from a pool of bidding candidates and their contracts end on September 30, 2011.
Paulson is absolutely the most powerful person in the country, maybe the world. "In consultation with the Federal Reserve, I determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks," Paulson said. Paulson is considering a new use for the TARP money: trying to resuscitate the market for securities backed by auto, credit card and student loans. Recently Paulson's erratic behavior led to a 180-degree turn with money approved by Congress under the $700 billion bailout bill.
Paulson has the ability to do so because once again Congress has failed to use its congressional oversight to protect the American people. In many ways just like they did on the run up to the Iraq war. In the aftermath of the 2008 congressional race only 21 incumbent members lost their seats in congress.
The situation has once again failed us. Maybe the situation can be summed up by the chinese proverb, "Fool me once shame on you. Fool me twice shame on me."