Before We Jump In

September 20, 2008 7:39 p.m.

There are subjects I know a lot about and others I know very little about. And the high-wire financial mess we’re currently in falls clearly into the latter category. But I know enough to be troubled that we appear ready to give upwards of a trillion dollars in unfettered and unreviewable spending authority to the … let’s face it, the Bush administration, the folks who did such a bang up job in Iraq and New Orleans.

This morning a friend told me it’s like the Iraq War all over again — Shock & Awe, followed by an occupation of Wall Street, and all with no exit plan.

In all seriousness, Paulson seems like a very able guy. And without a roadmap in hand, he appears at least to have avoided catastrophe so far. But let’s take a moment to realize just how much money we’re talking about.

It is probably inevitable in such cases that the public gets stuck with a lot of the bill for the recklessness and perhaps even criminality of the people who got us into this mess. Even if it is their ‘fault’, we (as a country and its citizens) are simply too bound up with the consequences of their actions to let them play out in an unfettered manner.

But we need both some orderly system of decision making and some conditions imposed on the people, and the industries, that brought us into the ditch.

Here’s a note received today from one TPM Reader …

The current proposal for the bailout — $700 billion to be used however the administration chooses to use it — should not be allowed to pass in its current form. This is the same administration that has mismanaged Iraq, DOJ, Katrina. Why can they be trusted to preside over this in a way that is even-handed and for the benefit of the taxpayers? As Krugman and Atrios have pointed out, if insolvency rather than liquidity is the real problem, then this may not even fix the problem. Even if there is some modest stimulus package appended to the bill, the bill will still be a bad idea if it gives such unprecedented and unchecked power to the Bush administration.

It would be great if you guys could lead a push — like the anti-SS privatization one from a couple of years ago — to impose limits and rules on the bailout. The Dean Baker post on your site is a good proposal and maybe it makes sense to press congressman to agree to elements of it, particularly the caps on executive comp which has gone completely out of control here. It also makes sense to regulate the CDS market — $65 trillion in it, more than in banks, with no transparency.

Make those who are to be rescued agree to some conditions so that this will not happen again. Otherwise, this is basically giving Wall Streeters (who are to be fair friends with both parties) a lot of money for nothing in exchange.

We’ll be publishing more of your emails. So please let us know your thoughts.

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