02:44 pm
Bailout Blues
It looks like there will be a bailout.
[L]awmakers in both parties said that few substantive differences and no major obstacles remained. They said the bill would authorize the full $700 billion requested by President Bush, but that Congress was intent on disbursing the money in installments.
One plan under consideration would release $250 billion immediately, with another $100 billion available at the discretion of the president.
They also said that there would be limits on pay packages for executives whose firms seek assistance from the government and a mechanism for the government to be given an equity stake in some firms so that taxpayers have a chance to profit if the companies prosper in the months and years ahead.
I still think this is a bad idea. The deal they reached is far better than the Paulson plan, but why authorize all $700 billion? Yes, it’s good that they put it in installments, but given that even Paulson said he saw a disbursement of no more than $50 billion a month, why not authorize $150 billion through the end of the year, with maybe another $50 billion contingency fund?
Sigh.
In the end, no one — not Bush, not McCain, not Obama, not Congress, not Paulson or Bernanke — had the political courage to stand up and say “Slow down, we don’t need to panic. We only need to have contingencies in place by Monday. Let’s wait for the new guy to come in before we give away the store.”
So much for leadership.
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