The uncertainty in the economy right now is fascinating. It has consumed my attention lately. Making sense of it early on, I wrote this to my family members right after I heard about the Paulson bailout plan:
"Overall I cant believe giving bush an 800 billion dollar blank check in his last few months is a good idea."
Since then, a few posts have caught my sentiment:
"This is telling: if Paulson can't be honest about what he himself sent to Congress — if he not only made an incredible power grab, but is now engaged in black-is-white claims that he didn't — there is no reason to trust him on anything related to his bailout plan."
"What we need to determine the extent of this "crisis":
- Transparency. Release the presentation Paulson gave to congressional leaders that supposedly has them all spooked. Give us the data and information, and let outside economists pore over the numbers and reach independent conclusions. The Bushies lie and have zero credibility. We can't trust anything they say.
Timing. Why the sudden rush, when the administration has been working on this plan for months? Seems more than a little suspicious.
Solution. We don't know what the problem is, so we really don't know if this solution addresses that problem. What we do know is that it's targeted not just at failing institutions, but any old financial firm on Wall Street that wants a piece of our money. Even those that "are very successful banks and investment houses that have done very well". Heck, did I say "on Wall Street"? I almost forgot. Any foreign bank can apply!
Details. Why $700 billion? Why not start off with, say, $75 billion. Is the emergency so dire that Treasury will spend all $700 billion next week? Doubtful. So put in what would amount to a bridge loan until people have had a chance to full understand the magnitude and severity of the problem. If it's truly as bad as people say it is, further moneys can be appropriated.
Motives. Given that the administration wants to give money to solvent financial institutions, is this just another component of the long-running conservative effort to bankrupt the government to destroy government's ability to improve people's lives?
Incentives: The administration is really concerned that solvent banks may not take the bailout, so it has to be as condition-free as possible. Why is the administration desperate to force taxpayer funds into these private Wall Street institutions? If they don't want our money, everyone wins, best of all, the taxpayers.
Politics. The American people hate this thing, and those approval numbers are only getting worse. Given all the points listed above, whoever votes for this thing, even an "improved" version, will face a world of hurt this November, and if not this year, in primaries and general elections through 2010."
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