I am the first to admit that economics is not my forte. But handing a $700 billion blank check to the Bush Administration to dispose of as they wish, no strings attached and no oversight required, strikes me as the stupidest move anyone could make. I agree with folks like Josh Marshall and Matt Stoller who point out that the discourse feels eerily, tragically, like what happened in the run up to the Iraq War. We’re in a crisis, we have to act now, there’s no time for serious debate or serious information gathering, the Bush Administration is saying TRUST US! and Congress is about to hand another $700 billion over to a bunch of crooks who should never have been trusted with taxpayer funds to begin with.
This is insane. Laughably insane.
Where are the grownups?
Yesterday Paul Krugman sounded the alarm:
The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.
And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.
I hope I’m wrong about this. But let me say it again: Treasury needs to explain why this is supposed to work — not try to panic Congress into giving it a blank check. Otherwise, no deal.
No deal, indeed. Because it looks like the Treasury is trying to panic Congress into signing off on a blank check. That’s exactly what is happening, and yes, it does feel exactly like the run-up to the Iraq War. And no, the people responsible for the Iraq War and the Hurricane Katrina debacle should not be given a blank check.
We’ve been down this road before. Congress, please do not make the same mistake three times.
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[UPDATE]:
Sound familiar, anyone?
WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson acknowledged on Sunday an emergency rescue plan aimed at stabilizing a financial system in freefall will cost taxpayers money, but argued that costs will not be as high the $700 billion limit of the package.
"The taxpayer is at risk," he said on "Fox News Sunday" television program, but added, "It would be extraordinary circumstances, highly unlikely, that the cost will be anything like the amount you spend for the assets."
Yes, and the $60 billion the OMB estimated the Iraq War would cost in 2003 was "the upper end of a hypothetical," and anyway,
an attack by Saddam Hussein or a terrorist ally "would cripple our economy"
according to President Bush and the morning bobbleheads. Plus, the president’s advisors assured us it "would be a short war”:
"The idea that it's going to be a long, long, long battle of some kind I think is belied by the fact of what happened in 1990," [Rumsfeld] said on an Infinity Radio call-in program.
He said the U.S. military is stronger than it was during the Persian Gulf War, while Iraq's armed forces are weaker.
"Five days or five weeks or five months, but it certainly isn't going to last any longer than that," he said.
How does five years sound, asshole?
Yes, this rush to bail out Wall Street feels a lot like the last time the Bush Administration hit the panic button to resolve a crisis and an acquiescent press and scared Congress eagerly fell into line, refusing to ask the hard questions and even play the dreaded “blame game” so we could learn how we got here and how we need to get out.
That turned out so well for us.
Look, everything these people touch turns to shit. They are children. They need to be taken by the hand and led very slowly and carefully across the street by someone responsible. They simply cannot be trusted.
No blank checks for criminals.
