There appears to be pretty widespread agreement that some major rescue plan is in order. But I’m having a hard time finding economists or others with related expertise — either on the right or left — who don’t believe two things: a) that this plan gives way, way too much discretionary power to the Treasury Department with little requirement even to make reports to Congres and b) as Paul Krugman puts it, “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.” Whether that means equity stakes for taxpayers or simply some assurance that the USG won’t be paying premium prices for worthless crap, that key component just doesn’t seem to be anywhere in the proposal.
And unless I’m not being clear, this request isn’t simply for effect. This is not a rhetorical question. I’m really looking for examples. I can see lots of politicians saying we need to do something now or we’ll all die and lining up to vote for whatever Paulson says. But I’m curious how many economists there are (or people with relevant professional expertise) who don’t agree that these two shortcomings must be rectified.
