'Orderly Liquidation Authority'

http://www.futureofcapitalism.com/2010/05/orderly-resolution-authority

One of the points we have been making around here is the use of Orwellian language to sell legislation in Washington. Both parties do it; Republicans call their proposed tax increase on seniors earning more than $170,000 a year the "Patients' Choice Act," while Democrats call bank taxes "fees."

The latest example is the use of the phrase "orderly liquidation authority" to describe the provision in the financial "reform" bill that allows the FDIC to seize a vast range of financial companies that are merely in "danger of default" and then allows the FDIC to serve simultaneously as corporate management, creditor of the corporation, and referee of the liquidation process, while also allowing the FDIC to discriminate among creditors of the same class and give higher recoveries to whomever it likes.

If they called it "government seizure without due process authority" instead of "orderly liquidation authority," it would be clearer what is actually going on. There's nothing "orderly" about it.

William Kristol reports that Senator Sessions of Alabama will offer an amendment today on the Senate floor to strip the "orderly liquidation authority" out of the Dodd financial overhaul and replace it with some more modest modifications to the bankruptcy code.

by Ira Stoll  |  May 13, 2010 at 9:07 am Related Topics:  Banking, Capital Markets Regulation, FDIC, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list