So I have been waiting to post on the $700B bail out package until I had some time to read more and get my thoughts together. Today it became clear that there can be no more waiting. Here are some great resources for understanding this mess. The first is Terry Gross’ Fresh Air on NPR today. The second is from my friends over at Scatterplot which you can read here.
I just don’t think this is all mystical (as the Scatterplot post points out). The banks were not being closely regulated; a whole industry of crap loans emerged that should have been regulated; investors bought those in bundles; they bundled and rebundled them so that no one knows what, if any value the things actually have; now no one wants to buy them so the US government might. OK — we could have been regulating better and everything, but my big problem is that the Paulson proposed legislation provides that his expenditures of this $700B is NOT REVIEWABLE BY ANY COURT OF LAW OR ADMINISTRATIVE AGENCY.
SAY WHAT?!?!?!?!?!? Remember checks and balances? This is ANOTHER HUGE power grab by the executive branch. That makes one dude, who is in the executive branch, to spend an amount of money that just boggles the mind.
Last week I was sure that we needed to do something, but with (1) no oversight, (2) no guarantee that the taxpayers actually own somethign that we can later sell and get money from, (3) regulation that bans this derivitive trading on valueless things and (4) some evidence that we actually have to do this NOW, I am not so sure it is a great idea. Is it?