I don’t agree that all GS was doing was playing the bookie, or that they only realized what they’d done was a mistake in hindsight. They took out insurance on CDOs they didn’t even own (imagine taking out insurance on someone else’s car then profiting on it when they get in an accident) and re-packaged those CDOs into financial instruments which were then systemically disbursed. Then, to top it off, they made $13 billion in insurance when those CDOs went belly up while other financial institutions and investors crashed and burned around them.

Taken in the context of Goldman Sachs’ history, I don’t believe it’s possible to argue they were simply bookies. They knew what they were doing–they were in it for short-term profits, to get out before the melon hit the sidewalk, as RollingStone put it. That’s sleazy and, if not currently illegal, should be made so immediately. At the very least, GS and all those responsible should be stripped of their profits, because right now they’ve made off with billions of tax payer dollars, meanwhile the gulf between the rich and poor continues to grow. In the larger context, Mr. Zakaria, GS and other culpable firms are swindlers and robbers, not innocent victims of financial complexity.

Especially when you see scenes like these. That the responsible parties for our economic disaster continue to kick people out of their homes and continue to show no compassion despite owing their existence to your and my tax dollars is heinous. I’m usually a fan of tolerance, but living with this kind of selective socialism seems un-American.

One of my main grievances with the Wall Street bailout is how the banks aren’t being held accountable for their mistakes (and the hallway conversations and murmurings tell me others are bothered by this, too.) To put this in perspective, what if every American said to the government “Pay off my credit card debt, car loan, and mortgage or I’ll kill myself tomorrow.” Would the American government absorb our words and fork over billions to save us all? Not a chance. But that’s essentially what Wall Street did. They held a gun to America’s head and told Congress to fork over the dough. By exploiting the world’s fear of a market collapse, the irresponsible banks strong-armed their way into a deal which has, so far, lived up to little of what it promised. Where’s the liquidity? Where’s the oversight?

These banks were suffering because they took on debt they couldn’t afford. What’s the difference between those banks and the millions of Americans suffering because of similar irresponsible decisions? From a purely situational perspective, not a thing. It’s the level of accountability, however, that most Americans have that draws a distinct line between them and the financial robber barons. It’s true that millions of people in this country live off the welfare system, but those millions are overshadowed by a larger majority who accept their irresponsibility as their own and take personal accountability for their actions. Rather than make others suffer for their mistakes, they choose to cut back on spending and trim down their life styles. Even while wishing the opposite, they understand government won’t be there to bail them out because that isn’t the government’s job.

Yet somehow, in a country for the people, an accountability asymmetry has emerged. We could all stand up tomorrow and, as Wall Street did, threaten to derail the domestic and global economy if our demands aren’t met. But we wouldn’t. We don’t operate as if our government is a soup kitchen, and our corporations shouldn’t either. We do not share their profits and they should not share ours. Our government pitifully acquiesced. They made a mistake. This bailout is a slap to the face of hard-working Americans who struggle each day to climb out of the holes they made for themselves. And you know how they learned to climb? Out of necessity.

Given the bailout, our financial industry will remain unaccountable for its actions. They pulled one over on us. They got us to sacrifice our ideals and our money in the face of a threat that has yet to actualize. What happened in September was the pièce de résistance of eight years of fear mongering and an utter failure of our political system. What an immense disappointment.

Americans have a right to be outraged and dammit we should be.

The Wall Street bailout brouhaha has clogged the pages of newspapers and news sites for the last week. Treasury Secretary Paulson and Federal Reserve Chairman Bernanke–backed by the Bush Administration–have tried their hardest to hastily push a fix through legislation. The full text of the draft proposal can be found here.

Nested within this at first seemingly innocuous proposal lies a little gem that uncovers exactly why Paulson & Co. have been holding the brink-of-catastrophe gun to congress’s head, hoping for a hasty approval. Section 8 reads in its entirety:

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.

Or, to put it simply, Paulson can do whatever he wants with our $700 billion without telling anyone. Paulson’s feeble attempt at explaining the lack of oversight details in the memo were nothing more than a visceral reaction to being caught in an attempt to go elbow-deep in this country’s fiscal cookie jar.

I thought it would be presumptuous for us in that outline to come up with an oversight mechanism. That’s the role of congress. That’s something we’re going to work on together. So if any of you felt that I didn’t believe that we needed oversight, I believe we need oversight. We need oversight. We need protection. We need transparency.

He must believe the American people are a dumb bunch. Section 8 of his proposal didn’t delegate the authority to establish an oversight plan to congress, it strictly forbade any oversight at all! This wasn’t a mistake; he’s not an idiot. You don’t become the CEO of Goldman Sachs and the United States Treasury Secretary by lacking intelligence.

He is a liar. And once again, in a time of national crisis, the trust that Americans unscrupulously place in our leaders is being exploited.

Update 2:08pm: Perhaps it’s my legislative naivete, but after reading the entire proposal, I find the vague language striking. For instance, Section 12 Clause (1) leaves the door wide-open for the bailout of any member of the financial industry affected by the mortgage crisis. And Section 6 qualifies the spending limit for this bailout to the point where many interpretations are possible, implying $7 billion may not be the cap (a point bolstered by the fact that the requested increase to our current national debt limit in Section 10 is about $700 billion more than the amount requested for the bailout).

Most alarming of all, the bill seems set up to allow unfettered authority on the part of the Treasury Secretary; not only to apply the rules laid out but to interpret and expand them. I recognize that some of these clauses are necessarily vague because the specifics regarding what is necessary to fix the situation are unknown. However, this is an extraordinary amount of power to invest in a single person especially considering that the unilateralism of financial industry bosses played a big part in why we’re in this situation to begin with.