Emperor Paulson?

By Devin Foley

Examples abound in history when real and perceived crises were used to justify tremendous power grabs. Even in the land of the free and the home of the brave we’ve seen our fair share. Recall the Alien & Sedition Acts signed by President John Adams, FDR’s threat to pack the Supreme Court in the Great Depression, the Japanese internment during WWII, LBJ’s request and Congress’s adoption of the Gulf of Tonkin Resolution, and many others.

Amazingly, we have survived them all with most of our freedoms intact, which is a testament to the Founders’ wisdom and foresight laid out in the Constitution and the character of the American people.  Indeed, either Congress or the Supreme Court eventually repudiated each grab for power in the examples just listed. 

Today, we are told the Republic faces another crisis. Like Caesar poised to cross the Rubicon, Treasury Secretary Henry Paulson awaits the passage of the $700 billion bailout plan to save the Republic. He points to down markets, portends financial Armageddon, and urges Congress to act quickly to cede him power.  

And what are some of the powers Secretary Paulson gives himself in the Bailout Plan?  

·         Power to purchase, on his terms and conditions, mortgage-related assets from potentially any corporation or central bank in the world. (Section 2.a) 

·         Power to “enter into contracts … without regard to any other provision of law regarding public contracts.”  Section 2(b)(2).  

·         Power to nationalize the entire financial system including banks, insurers, and other financial institutions.  Section 2(b)(3). 

·         Power to regulate and set guidance at will for unknown sectors of the economy.  Section 2(b)(5). 

·         Power to increase the national debt to $11.3 trillion (Section 10).                                   

All of this is possible with the loosely written language found in the bailout plan. After all, the plan gives the Secretary of the Treasury the power to define the loose terms of the legislation and the actions of the Secretary are not open to review by any courts or any agency. Section 8 of the plan reads, “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.” 

What hubris occupies Secretary Paulson that he would write a law removing himself from the judicial review that our Constitution guarantees? 

Are you comfortable with Secretary Paulson acting on his proposed powers with no oversight by any court or administrative agency? It may seem far-fetched to imagine the following scenarios, but taking many of the proposed sections of the plan to their logical conclusions results in such possibilities and more potentially becoming true. 

·         If you own mortgage-related assets in good standing worth $1 billion, are you comfortable with Secretary Paulson forcibly buying those assets from you for $500 million. Are you comfortable with that act when you have no access to the courts on the matter? 

·         If you have a checking account at a local bank, are you comfortable with Secretary Paulson nationalizing that account and regulating how you can use your money in the account? Are you comfortable with that act when you have no access to the courts on the matter? 

·         Are you comfortable as a taxpayer and an American in bailing out foreign companies and central banks when they funnel their bad debt into foreign-owned, U.S. based corporations? Are you comfortable with that act when the courts have no say on the matter? 

Americans, this Bailout Plan, as currently written, is a grave threat to our freedoms, our personal property, and our Republic. Republicans and Democrats, conservatives and liberals, and any and all who believe in the importance of upholding the Constitution and our way of life ought to stop and consider just how much power our elected representatives are considering giving the unelected Secretary of the Treasury and former Goldman Sachs CEO, Henry Paulson. 

As it stands, the markets are only down 16 percent for the year. That drop has justified an 80 percent ownership of AIG by the United States government and the nationalization of $5 trillion in mortgages, roughly half of the mortgages in America. Additionally, $300 billion was spent on the housing bailout bill, $160 billion on stimulus checks, and $100 billion in loans to institutions such as Bear Stearns and temporary clearing loans to institutions such as Lehman Brothers.  

Set aside the idea of another bailout that further socializes losses and privatizes profits, remove the partisan blinders, and recognize that we are marching down the road to serfdom at a frightening pace.  

Come what may, we must not destroy our children’s future by burying the nation in debt and destroying the Constitution in exchange for false promises of financial security provided by one man. We must protect and continue our American Experiment in self-government.  If you have not yet read the $700 billion bailout plan, click here.  

Devin Foley is Director of Development for Center of the American Experiment.