About face!
Never mind—
23-Sep-08. Ronald Reagan must be spinning in his grave! The party that invoked his name repeatedly during the recent GOP convention has now repudiated utterly Reagan's maxims:
- "I don't believe in a government that protects us from ourselves"
- "The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help'"
- "Government is not the solution to our problem; government is the problem"
(L-R) Henry Paulson, Ben Bernanke, Christopher Cox testify before a Senate committee
Suddenly, all those staunch ideologues who believed in an unfettered, unregulated free market are clamoring for the government to cut a blank check for $700 billion to bail out the financial sector now that the house of cards built on questionable mortgages is teetering on the verge of collapse. Treasury Secretary Henry Paulson (by way of Goldman Sachs), Fed Chairman Ben Bernanke and S.E.C. Commissioner Christopher Cox are all testifying before Congress that the sky will fall unless Congress hands over the money, and right now!
Everybody's a socialist!
It amounts to extortion.
I say, Hold your horses! There are too many questions about what Paulson wants to actually do with the money and the complete and unquestionable authority he wants. There hasn't been enough thought about the consequences, intended and unintended. Not enough people have asked the question, Is this the right solution for the right problem?
We can all agree that we're in a crisis, but this is no time to be buying a pig in a poke. With a price tag of $2321 for every man, woman, and child in the US, we had better be damned sure that this solution will really fix the problem and not just delay the reckoning. Paulson doesn't exactly have a good track record — he has been wrong every step along the way, assuring us time and time again that the steps he was taking would contain the problem and stop the bleeding.
A strong clue that we haven't got it right is the loud insistence that we shouldn't ask questions or strengthen oversight; that we shouldn't demand something in return. Fortunately, there seems to be healthy bi-partisan scepticism:
- Christopher Dodd (D-CT) called the proposal "stunning and unprecedented in its scope and lack of detail" and went on to say, "after reading this proposal, I can only conclude that it is not only our economy that is at risk, Mr. Secretary, but our Constitution, as well."
- Jim Bunning (R-KY) said the plan would "take Wall Street's pain and spread it to the taxpayers" and called it "financial socialism, and it's un-American."
Nobody will win if the financial system collapses, not the taxpayers, not Wall Street, not the world. But capitalism is premised on the relationship between risk and reward. And that doesn't mean the taxpayers should have to pay the price for the excessive risk the geniuses on Wall Street took. At a minimum, the CEOs that ran their companies into ruin and need to be bailed out should have their golden parachutes confiscated and their paychecks docked. We've seen too many of them walk away with millions while their former employees stand in the unemployment line and their current employees struggle to get by with wages that no longer relate to profits and productivity.
