Saturday, September 17, 2011

Coming soon, another government agency: the AIFA

The President wants Americans to read his Jobs bill and decide if it's a good plan, but how many of them will actually understand the near-200 pages of legal jargon?

Seriously. During his weekly radio address, Obama asked citizens to go to the White House website and read the bill for themselves.

That said, I do suggest reading Subtitle F, Sec. 242 to sec. 260. That's the part that deals with the creation of a new Federal Authority, the AIFA (American Infrastructure Financing Authority). What is the AIFA? Essentially, it's a government-owned bank that would provide loans for infrastructure creation and improvement. The plan calls for the AIFA to be given ten billion dollars, as capital for loans and for administrative costs. Officers of the AIFA will be appointed by the President, subject to approval of the board of directors (appointed by the President for four year terms, upon consent of the Senate).

In short, the AIFA will be another kind of GSE, like Fannie and Freddie. Its board of directors will be yet another place for elected officials to pay off their supporters, with cushy high paying jobs. This pattern was grossly evident in Fannie and Freddie and the dishonesty, greed, and incompetence of appointments to those boards contributed mightily to the mortgage industry meltdown.

Reading the entire section, it's clear--to me--that there's intent to "balance" the AIFA, to insure it can't be controlled absolutely by one party, but that's not the problem. It's not made up of elected officials, its actions won't be common knowledge, and it has access to way too much capital. Oversight will still be politically driven and there is just no reason to suppose this entity will be effective or free from corruption and waste. And it's funding and powers will--once it begins to operate--only increase, in my opinion.

This portion of the Jobs bill is enough reason to toss the whole thing in the garbage.

Cheers, all.

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