TW: One cannot overstate how broad the powers sought by Paulson are. FDR received tremendous criticism in 1933 for the broad powers he assumed in his effort to reverse the Great Depression. Perhaps we are in a similarly dire situation. I have no doubt the powers will be provided. I repeat when you provide dictatorial powers you better hope for a good dictator, benevolent and competent...the room for abuse with these powers will be immense. I am not referring to fraud I am referring to the powerful and well-connected benefiting to the detriment of the less powerful.
From Robert Reich:
"Put yourself in the shoes of a member of Congress, including our two presidential candidates. The Treasury Secretary and Fed Chair have told you this is necessary to save the economy. If you don’t agree, you risk a meltdown of the entire global financial system...An election is six weeks away.... Now – quick -- what do you do? You have no choice but to say yes."
From Norris:
"It is unsettling to see Wall Street firms that only a week ago feared for their survival hoping to get rich off this program. It needs to be carefully monitored to keep it from becoming a scandal of its own...The Bush administration was a little slow to decide this was a massive crisis, but they reverted to form when they did. They want Congress to give them a blank check to do whatever they want, whatever the cost, with no one able to watch them closely...
Hank Paulson is a lot more competent that some of the people who gave the Bush administration a reputation for incompetence...but it would be no insult to him to insist on better monitoring... This crisis is not so important that a bill really needs to be passed without time for the public to read it and study it...
This is not similar to the Resolution Trust Company. The assets it liquidated were acquired when failed savings and loans were taken over by the government. There was no question of purchase price. Here purchase price is crucial. What are the safeguards to prevent cronies and contributors from getting favorable deals, either in selling assets or in purchasing them?
Investors clearly think the shareholders of brokerage firms and banks are being bailed out — not just that failure is being avoided. That should not be allowed to happen. If there is no penalty at all for these disasters, we are more likely to see repeats somewhere down the road. That is far more important than whether a few executives get undeserved bonuses, but the bonuses are more attractive to politicians and may garner more congressional attention than issues of whether the government overpays for assets."
http://norris.blogs.nytimes.com/2008/09/21/will-a-crisis-create-a-scandal/
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