A PIG WITHOUT LIPSTICK.... (Bush admin's bailout proposal)

[ProSense]

A PIG WITHOUT LIPSTICK.... I've been trying to find a credible voice on fiscal matters that believes the Bush administration's bailout is a good idea, and should be approved by Congress without alteration. I can't find one.

The plan seems to suffer more as the scrutiny grows more intense, but I'd go with the accountability/oversight problem as the most glaring.

The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.

Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority.

"He's asking for a huge amount of power," said Nouriel Roubini, an economist at New York University. "He's saying, 'Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy."

Atrios, after noting the $700 billion price tag, highlights this portion of the proposal: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

If we were dealing with a competent, capable administration, which had proven itself reliable in dealing with fiscal and budgetary policy, it would still be an extraordinary gamble to turn over hundreds of billions of dollars with no strings at all. But we're dealing with the Bush administration, which hasn't exactly earned the benefit of the doubt.

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Obama has called the proposal "a concept with a staggering price tag, not a plan", and has laid out the principles that he thinks should govern a bailout here. McCain was noncommittal on the administration's proposal, but criticized Obama.

Deciding what to do about the present financial crisis is beyond anything remotely resembling my expertise. However, like Steve Benen, I've been reading around, and I can't find a single decent economist who likes the plan. That scares me, since I expect that the political dynamics will go something like this: Paulson has proposed a plan; not to accept it would deeply damage confidence in the markets and make things much worse, regardless of whether it's a good plan or not; therefore, it will be passed. I hope the Democrats try to get some decent regulation and structural reform for all that money.

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Exposing McBush as a liar (and fraud).

Having gone over McCain and Obama's legislation on banking and mortgage reform, I thought I'd continue my search for John McCain, Scourge Of Wall Street by looking at his website to see what new regulations he proposes for financial institutions. As far as I can tell, though, not only is there nothing in his issues section that spells that out, there's nothing that so much as mentions any aspect of the present crisis other than the need to help homeowners in foreclosure. As far as his position papers are concerned, the financial crisis, like foreign policy, simply doesn't exist.

So I decided to check out the various speeches McCain has given on the economy during this campaign, to see how his career as a financial reformer might have manifested itself in them. On March 25, he gave a speech on the housing crisis. Given his recent claims to be a champion of tighter regulation on Wall Street, you might expect that he would have called for new regulations back in March. Au contraire: while he did call for more transparency in lending, here's what he said about regulating financial institutions:

"In financial institutions, there is no substitute for adequate capital to serve as a buffer against losses. Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital."

That's right: we need fewer regulations on financial institutions. How prescient!

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Why do I bother? Because lies annoy me. And the idea that John McCain is some kind of Wall Street reformer is a lie.

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