The New York Times on Line has two articles up this morning that fit tongue and grove quite nicely. The first is an article about the Feds Sunday night deal with Goldman and Morgan The other article outlines how Democrat (and some Republican) lawmakers are asking for conditions to the bailout. But in oposition to any oversight we got this money quote from every investment banker's friend Mr. Paulson:
"If we design it so it’s punitive and so institutions aren’t going to participate, this won’t work the way we need it to work," Mr. Paulson said on "Fox News Sunday." "Let’s talk about executive salaries. There have been excesses there. I agree with the American people. Pay should be for performance, not for failure."
But he quickly added: "But we need this system to work, and so we — the reforms need to come afterwards."
That little gem was buried on the second page near the bottom of the article. On the first page in the first few paragraphs the article introduces us to the fact that Democrats are "complicating the negotiations" with competing interests. To be fair the article is balanced with arguments from both sides. But this little gem was presented as almost a throw away
Financial companies were already lobbying to broaden the plan. And the Bush administration did indeed widen the scope by allowing the government to buy out assets other than mortgage-related securities as well as making foreign companies eligible for government assistance.
I am no financial wizard, but just like the average American I have been thrown into a cram course on economics 101. And just like my gut instincts with the Iraq War, there is something going on that ain't right. Why is it the Federal Government feels the need to rush through some sort of bailout, with unfettered authority given to Mr. Paulson? Why is it they think the American People will stand idly by and allow a raid on their Treasury? Is it because this convoluted banking system we have is now threatening us with total collapse if we don't? Even our saving accounts, you know those money markets, they could fall below a dollar if we don't get in line and say Okie Dokie, please give our tax dollars to the money czars?
The architects to this scheme are making the Sunday talk show rounds to sell it to the people. Mr. Paulson said about the bail out it's "better then the alternative" and then he left it all open ended
Mr. Paulson said he hoped that the government would recoup much of the cost of buying distressed mortgage-related assets. But he did not rule out that the initial cost of the bailout could rise beyond $700 billion, the limit set in the terse proposal sent by the Treasury to Congress on Saturday.
"That doesn’t mean we’ll go all the way there, or it doesn’t mean it will stop there and we won’t ask for more," Mr. Paulson said on the CBS program "Face the Nation." "What we need is something that is big enough to get the job done. We’ll ask for what we think is a right amount to give us plenty of flexibility."
All I know is it took us several years to get to this point. It started with deregulation, followed by a "legal" Wall Street Ponzi scheme. We can take some time to come up with a solution that doesn't involve a run on our Treasury by the same institutions that got us into this mess. So I am sorry Mr. Paulson I hope the American People don't allow you to have this bailout work the way YOU need it to work for those institutions, with reforms that come after the run on our treasury. I hope the American people (and the media) allow those in Congress the chance to do their job, Oversight.