by Burke McKay

Created on: October 03, 2008

October 2, 2008

The former "bail out" bill, now being referred to as the "rescue" bill was narrowly defeated in the House, Monday, September 29, 2008 in its 110-page form. The Senate rewrote it to 451 pages and passed it 75 to 24 on Wednesday, October 1, 2008. Now it is "scheduled" to return to the House on Friday, October 3, 2008 in its Senate form.

The House was right to reject this "bail out"/"rescue" bill. Let me introduce you to just one of the provisions of this bill to illustrate why.

(e) PREVENTING UNJUST ENRICHMENT.In making purchases under the authority of this Act, the Secretary shall take such steps as may be necessary to prevent unjust enrichment of financial institutions participating in a program established under this section, including by preventing the resale of a troubled asset to the Secretary at a higher price than what the seller paid to purchase the asset. This subsection does not apply to troubled assets acquired in a merger or acquisition, or a purchase of assets from a financial institution in conservatorship or receivership, or that has initiated bankruptcy proceedings under title 11, United States Code.

http://money.cnn.com/2008/09/28/news/pdf/firstd raft.pdf

This clause is also in the Senate bill.

http://thomas.loc.gov/cgi-bin/query/C?c110:./temp/~c 110iCbmxl

Translation: The Secretary of the Treasury will not pay more than the purchase price of any troubled asset, except when that asset has been gained through merger/acquisition, purchased from a company that is being foreclosed on or that has filed for bankruptcy under title 11, USC.

In other words, a predatory company that buys out a "troubled" company, or buys the "troubled" assets of a company that is being foreclosed on or has filed bankruptcy, can sell those "troubled" assets to the government for a profit {I hope that isn't too confusing, but it is what this subsection says}. However, a company can not sell its own "troubled" assets for more than their initial cost. In essence, the corporations that own the Federal Reserve {a privately owned corporation that produces our currency and sells it to the Treasury at interest} will be the corporations receiving the "bail out"/"rescue" money, with the American taxpayer responsible for repayment to the Federal Reserve with interest. Makes one wonder if this is a "bail out", "rescue", or government sponsored, and sanctioned power grab.

At Thomas.gov, the Senate bill is entitled "`An Act to amend section 712 of the Employee Retirement Income

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