Surprise! - Boehner Opposes The Treasury Having The Power To Take Over Firms Like AIG

I guess it is because they much prefer the current system where the federal government just hands money to a private company in return for a private equity stake. Plus, it has the added bonus of allowing Republicans to scream in outrage whenever that private company pays bonuses. God forbid that the federal government can simply take over the way they do with banks.

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WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner's request for government authority to wind down failing non-bank financial firms is an unprecedented power grab, House Minority Leader John Boehner said on Tuesday.

"This is an unprecedented grab of power, and before that occurs, there ought to be a real debate about whether we should give that authority to the Treasury Secretary," Boehner, an Ohio Republican, told reporters. There were many unanswered questions, he said, but stopped short of saying flatly that he would oppose the plan.

(Editing by Theodore d'Afflisio)

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Isn't this kind of amassing power by the Executive Branch one of the major things we objected about the Bush administration?

Is that the federal government does not have the power. My take is that if a company is going to act like a bank or hedge fund, they should be subject to the same regulations and restrictions. Otherwise, you do have these AIG type meltdowns.

Also, your argument could also be applied to eliminating the FDIC. Why should they have the power to take over banks? The real question is why should AIG be exempt from such restrictions?

The difference is a matter of accountability, transparency and the existence of very clearly delineated laws and procedures, hammered out over decades of experience, to protect the rights of everyone involved.

Night and day.

If that's the case, I have no problem with that.

That is not what is happening with the Treasury, however.

What is your alternative plan?

Without the requested power when AIGs go under we are all held hostage. We can either let them crash, causing their counter parties to go bankrupt, massive panic that would make what we've seen so far mild, and a deep depression. Or, we can do what are doing now. Give them money with no power. Are you ok with that?

How is this any different from what the FDIC does already with banks? Are you opposed to that too?

The people of Democratic Underground would be screaming bloody murder about how they were, yet again, seizing power that they had no right to have. We did this when the Treasury was given the authority to distribute the bail-out money; you can easily pull up the gigabits of bandwidth that argument took up here. Now that it is Obama granting new, extended powers to the federal bureaucracy, suddenly this is necessary for the US economy and how dare anyone ask questions?

question. I've been critical of Obama from time to time myself.

Second, in general DUers get hysterical about a lot of things so I don't see how that is relevant. As far as the specific getting upset about Paulson being given blanket powers that is not the same thing. Paulson was given very broad powers with no oversight. What Obama is asking for will have well defined rules and procedures just as the FDIC has now.

If you don't agree then fine but you still need to explain what your alternative route would be for something like AIG (or Citi group next probably). What do you propose that would 1) stop what is happening now from happening again (AIG holding our economy hostage) and 2) avoid the problems you see with expanded executive powers.

Sure the authority used to only extend to financial institutions, but when we allowed banks to sell insurance & investments, and insurers to act like investment houses the line became too blurred to differentiate between them.

AIG was a larger investment broker than Lehmans in recent years.

Laws which have existed and been tested a dozen different ways over decades. Laws that, in detail, outline the rights, protections and responsibilities of everyone involved, including the banks, the bank executives, the bank employees and the depositers. Laws which carefully limit what the government can do, and which prohibit any action by the government beyond these limitations.

I would have no problem with similar laws being put into place for insurance companies. But that is not what is being planned.

Instead, the Treasury Department will be given vague, ill-defined power to act unilaterally. Yes, that scares the shit out of me.

Just because there aren't iron clad details yet does not mean that the new powers won't be substantially similar to what the FDIC already has.

Reminds me of the talking heads that said the banking plan didn't have any details. Yet now they have implemented every item on the outline Geithner gave and they act like they think it is all something new.

eclipsing ideology.

the hell he's talking about