Get Ready to Bail Out (I Mean “Rescue”) Foreign Investors

Long-time Seattle Bubble commenter Eleua points out a particularly disturbing portion of the version of the bailout that the Senate is set to vote on tonight:

SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL BANKS.
The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.

In other words, it’s not enough that we throw hundreds of billions of dollars we don’t have at buying our own banks’ bad debt—if this version of the bailout passes, we’ll be pouring our children’s children’s children’s tax dollars into bad debt held all around the world.

Read more in depth analysis and details about this delightful new addition at Clearcut Bainbridge or at Market Ticker.

Then, call or fax our Senators to let them know how you feel about bailing out bad foreign debt.

Maria Cantwell:
Phone: (202) 224-3441
Fax: (202) 228-0514
Email Form

Patty Murray:
Phone: (202) 224-2621
Fax: (202) 224-0238
Email Form

Update: And it passes the Senate 74 to 25. Cantwell voted NO, while Murray voted YES, despite a grandstanding statement from her just one week ago (spotted by astute reader perfectfire) about working on reforms and not writing blank checks.