The New Republic

All the more reason not to rush this plan through, and instead take the time needed to open the books, examine the assumptions and the data underlying it, and assess the alternatives.

This is like Sept 12th. No time to be handing sweeping powers over to an unelected executive official arguing for sweeping powers based on unknown unknowns, unseen evidence, unproven or tested assumptions.

- teplukhin2you

September 24, 2008 at 6:16pm

wow, that's cheap, you rip off a Michael Lewis piece without even giving him credit? or did he rip you off? or are you a hedge fund trader??????

WTF does this have to do with whether or not the plan makes sense for more americans than not and whether or not it should be done this week or not?

If you are saying that Paulson is not to be trusted because he has money, you might want to look at a few of your own acquaintances and a few of your own past actions and re-evaluate whether throwing stones is warranted on the merits. I have no idea what you have done in your life but Paulson does not strike me as one who is looking to benefit himself and cronies more than he is interested in honestly doing what is right for the american people.

You've got a high perch there to speak from Marty, people seem to respect you. You also obviously have good connections who have or at least should have good insight. Why wast time and space with crap like this? Just askin.

- 2736298

September 24, 2008 at 6:30pm

Martin Wolf is one of the wisest economics writers around. Here's his summation in the FT:

"...There may well be a place for intervention in the market for toxic securities. But this is a costly and ineffective way of meeting today’s deepest challenge. What is needed, still more, is a clear and effective way of deleveraging and recapitalising the financial sector, ideally without using taxpayer funds. If such funds are to be used, they must also be injected in as carefully targeted and controlled a way as possible. Comprehensive action is essential, as Mr Paulson has decided. But let the US take the time to make that comprehensive action right."

- teplukhin2you

September 24, 2008 at 7:00pm

I've read that article by Wolf. It was good. And adding to many articles by top-economists it surely helps to destroy the myth that there is an economists' consensus around this criminal bailout.

And, as far as I'm concerned, even if there was unanimity among economists, I would still ask: since when does American democracy withhold all moral and prudential judgment and accepts the naked authority of priests? Yes, priests, since many economists are nothing but fanaticized priests of a mumbo jumbo economic order...

And Americans should know by now that their advise can be dead wrong. We have the example of "tax cuts for the rich". What happened? Surely not general welfare. WHat we had was overseas investment, Wall Street gambling and more mad Main Street consumption.

Now they want to apply the same formula. But these once it will be even more scandalous: since you won't just be giving Wall Streeters tax cuts. You'll be giving them tax payer money after they've ruined theirs...

It's hard to believe that this criminal madness has even been presented.

- luispc

September 25, 2008 at 9:08am

CORRECTION: Now they want to apply the same formula. But THIS once it will be even more scandalous: since you won't just be giving Wall Streeters tax cuts. You'll be giving them tax payer money after they've ruined theirs... It's hard to believe that this criminal madness has even been PROPOSED.

ONE OTHER THING: I really find it odd that some TNR editors that in the past were so good in demistifying "supply side" (for instance Chait wrote brilliant columns on this) are silent before what's happening. Am I wrong in saying that behind this bailout ultimately lies the "supply side" formula? Am I wrong in saying that their belief is that everything wil flow from filled pockets in Wall Street while abandoning public investment in the real world of real working people?

- luispc

September 25, 2008 at 9:25am

$75 million a year, huh? Gee whiz, I wonder why he took the job. And I wonder why he was offered the job. No, wait, I don't, and I don't.

The man is clearly a C-suite idiot. I say "idiot" and I mean it. We're used to executive power fantasies from King George, but how could Paulson have signed off on the initial plan? He may be one of the Masters of the Universe, but surely any dog on the street could realize that $700 billion was not going to be distributed dictatorship-style in the final days of Bush's miserable tenure.

Even now, when it's clear that obversight will be part of any package, Paulson's original presentation -- which would've made Paulson the most powerful and least accountable man in the world, his boss not excluded -- was so indefensible that it is still generating outrage. It appears that the White House has caved on every point, even the one point that was not scurrilous and criminal -- that CEO pay ought to be left for another, more thoughtful, debate. (I'd prefer limiting CEO pay in the good old-fashioned liberal way -- tax the hell out of the super-rich, all of them, and screw letting it sunset with the bailout!)

If Paulson was any kind of leader, he would've known that his original, incompetent, ludicrous proposal would poison the entire debate. We expect this stupidity from Bush. Unfortunately, Paulson has demonstrated the same degree of leadership as his boss. Fortunately, his plans are terrible, so they deserve defeat. If taxpayers don't extract painful equity from banks as a condition of the bailout, we'll just end up enriching a bunch of perfectly solvent firms and never recouping a penny. And, frankly, I'm not convinced that the economy is ready for any mass bailout at all. The banks may not have experienced enough pain to submit to the kind of terms which could possibly result in the needed correction.

Could this be the magical moment when the Bush Administration's incompetence and overreaching ACTUALLY defeats their horrible ideas? I mean, except for their failure to privatize Social Security. That was the other point on which the American people mysteriously refused to cave.

- bdgreen

September 25, 2008 at 10:53am

Markets have a dynamic psychological life of their own as informed by greed and fear. Paulson knew that he had to declare war and present a big enough gun as evidence of sincerity. The market was melting down in the most critical components. Components which if allowed to free fall would have begun a very impressive cascade into all other areas of economic activity. My hat is off to Paulson and Bernanke. I've not always been a Bernanke fan. He has been too willing IMO to satisfy a petulant stock market with rate cuts. In this case I give him the credit he is rightly due.

Time was and still is of the essence. This won't head off the coming recession but at least it saves a more reasonable valuation scenario by which to negotiate the future.

- boxofrox

September 25, 2008 at 11:49am