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Monday, September 22, 2008
Trust Congress on bailout?
The Atlanta Journal-Constitution
Once the door is opened to taxpayer bailouts, as it is with the $700 billion (or more) bailout of the nation’s financial institutions, it’s an invitation to politicians to make a bad deal worse.
The President’s three-page proposal will be fleshed out during a presidential election cycle by by Democrats who control Congress. The elements could not be worse. House Speaker Nancy Pelosi, delighted to be talking about something other than “Drill Here, Drill Now,” has a beach-ball issue tossed her way. The President’s proposal, she said, “does not include the necessary safeguards. Democrats believe a responsible solution should include independent oversight [of the bailout program], protections for homeowners and constraints on excessive executive compensation.”
That means, of course, politicizing every aspect of the bailout, adding a bail-out for individuals who took high-risk mortgages they couldn’t afford, and doing for executive compensation what Congress has done for campaign finance — and that is to yammer noisily and pass legislation that purports to deal with an alleged problem while simply moving money, whether campaign finance or executive compensation, from one stack to another.
The case is not yet made for the bailout — and may not be. Yes, the stock marked has soared. But the bailout establishes a floor. The isolated company or individual may bite the dust for personal or corporate irresponsibility, but if people and companies are irresponsible on sufficient scale, government protect them from their recklessness.
Congress going to “fix” the nation’s financial troubles in the days before a close and highly-competitive presidential race that will determine which party runs the nation for four-to-eight years? The cure may be worse than the problem.
