Congressional oversight of bailout
Topics: Regulation
30 Sep 2008
From: Ervan Darnell
The bailout plan which failed yesterday, and is due to be reconsidered on Thursday, would have given Secretary Paulson incredible latitude to give $700G in handouts to whomever he wanted for whatever criteria he chose. Such an open-ended system begs for corruption of the highest magnitude. How many vacation homes will his wife get from Morgan-Stanley before Merril-Lynch doesn't get any money? Just go with the legal bribery of who gets campaign donations.
Congress balks and says they want "oversight". Phooey, they want their nose in the trough too! How are they going to get campaign contributions unless they have the authority to blackmail a given company by denying a particular bailout? It's rotten from top to bottom.
Regardless of how bad the bailout is as an economic proposal (and should be rejected on those grounds), it shouldn't be accepted without some serious protections for abuse, something like an exact guideline for determining which companies are covered, and give any other company traded on the same exchange standing to sue if the guidelines are not followed. Yes, that will induce companies to game the system, but no worse so than the current open-ended proposal.
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Tossed in randomly here: One of the arguments is that there is a "credit seize up" and no one can borrow. What's Congress's solution? Borrow $700G to finance the bailout. I thought there wasn't any money to borrow?
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Ervan Darnell
ervan@kelvinist.com http://www.kelvinist.com
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