Under the radar

In the midst of the final meltdown and Congress' passage of the rescue bill, and while America was largely focused on the final weeks of the presidential election, Bush's Treasury Department quietly gave banks a $140 billion windfall:

The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

Reading the Washington Post's article, I was reminded of Naomi Klein's The Shock Doctrine. My friend and sociology professor Jane shared the book with me over the summer; it describes the phenomenon of the powerful using disasters--natural or otherwise--to increase their own power and wealth.

Sure enough, the administration's gift to banks is currently the most recent post on Klein's blog!