The Significance of John Cornyn's Financial Reform Amendment
Bill to protect US taxpayers from funding bailouts of "irresponsible" foreign governments just part of coming tsunmai of financial protectionism.
In early March on the Buzz & Banter (subscription required), in an effort to describe the global bailout saga, I offered:
A single swimmer struggles off shore and the lifeguard readily goes to the rescue.
A second swimmer struggles off shore and the life guard readily goes to the rescue, albeit a little tired.
A third swimmer struggles off shore and the life guard goes to the rescue, and strains bringing the swimmer back.
A fourth swimmer struggles off shore and the life guard goes to the rescue and really struggles to bring the swimmer back.
A fifth swimmer struggles off shore and the life guard hesitates to go to the rescue, but ultimately does, but damn near dies on the way to shore.
A sixth swimmer struggles off shore and the life guard wonders why the responsibility to rescue these people is all on his shoulders, but heroically goes out and brings the sixth swimmer in, but choking on water.
A seventh swimmer struggles off shore and the lifeguard stays on the stand, thinking "It's not my problem. They should have known better."
Well, it looks like we may not get to seven because the people on the beach are now trying to grab the lifeguard and are screaming at him to sit down because they think he'll drown if he goes into the water again.
I offer this after reading yesterday that US Republican Senator John Cornyn from Texas, offered an amendment to the current financial regulatory reform bill to protect US taxpayers from paying for bailouts of "irresponsible" foreign governments. Per Senator Cornyn:
"American taxpayers have seen more bailouts than they can stomach, and the last thing they should have to worry about are their hard-earned tax dollars being used to rescue a foreign government...This amendment will help prevent American taxpayer dollars from underwriting dysfunctional governments abroad."
Well yesterday the amendment passed 94-0.
Per Zerohedge, should the amendment become law, the Obama Administration will be required "to evaluate any proposed bailout of a foreign nation where that nation's public debt exceeds its annual GDP, and then to certify to Congress whether the bailout loan will be repaid. If the Administration cannot certify that the bailout loan will be repaid, it will be required to oppose the bailout and vote against it at the IMF."
In March people laughed at me when I offered that the referendum in Iceland (in which the populace overwhelmingly voted down the reimbursement of the UK and Dutch governments following those governments' bailout of Icelandic bank depositors) mattered.
But Iceland was just the first wave of what I believe will be a tsunami of financial protectionism, as voters around the world demand that bailout dollars be spent at home (if spent at all).
But with a lot of nations currently struggling to swim in deep water, I suspect that as more and more lifeguards are told to stay home, it will be only be a matter of time before we start to see the bodies wash up on shore.
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