Thanks heavens that Congress, Democratic Senator Chris Dowd and Republican SenatorRichard Shelby, have taken a whoa, wait a minute view on this bailout measure. Under the guise of an emergency, the Bush Administration is doing a Financial Iraq – let us in with no controls or otherwise the system will meltdown and there will be a recession. Sounds like Treasury has the DOD-Bush-Rumsfeld Disease.
As originally written, the Bailout Bill has no oversight other than a semi-annual report to Congress, full immunity for Secretary Paulson and other bailout administrators, no accountability requirements for which banks and financial institutions get what type of bailout and aid, no compensation for taxpayers taking on as much as $700billion of Wall Street “toxic loans”, no commitment to either to regulation or reprimand for those institutions that overstepped there risk limits, and no effort to give bankruptcy judges the ability to work towards reduction in interest rates on foreclosing loans.
This is a sellout to Treasury, the Fed and SEC to do the right thing when they helped get the US in this mess – admittedly with different players at the head. But even Paulson, Bernanke, and Cox have been bending over backwards not to curb the prerogatives of banks and overleveraged equity/hedge funds. This is particularly vexing as these institutions failed to come clean on the extent of their own toxic holding; continued to fail to support “privately” funded bailouts or asking extortionate deals of the Lehmans, Merrils, AIGs and other at-risk financial institutions; and continued extraordinary compensation to their top executives who were complicit more and less in the excesses particularly use of extraordinary leverage and condoning barely risk-assessable derivative instruments.
Three cheers also for Yahoo and their Financial advisers that ask the very relevant question: What do taxpayers get for their $700 billion dollar bill.
Here is what other media are saying:
Barrons – again, has a Wall Street outlook, but calls the bailout “shockingly awful”
Business Week – echoes Fed Chief Bernanke, without bailout there will be a recession.
Economist – calls it “Carping” but does acknowledge the major issues
Forbes – its article shows there is resistance to the Bail Now, Ask Later Fed approach
LATimes – highlights how deep the bipartisan intransigence is
NYTimes – alerting that there is major pushback from many sources
Time – strong reporting of whats up
However, this episode is not over yet. Congress may yet do a Manhattan Deal – for a few baubles, beads, and downright token trinkets cave into the Treasury and Wall Street. If you thought Bush was bad – a Blank Cheque Bailout is worse.