Like a lot of people, I am not sure what to make of the current financial crisis the commensurate ~$1 trillion bailout/nationalization of much of the country’s financial sector.
Beyond the question of whether what it is that is being done and whether it is the right thing to do, I continue to wonder as to where are the actors in question getting the authority to do what they are doing? At such, I am with James Joyner:
do we really want such fundamental decisions being made by obscure, unaccountable men like Bernanke, Paulson, and SEC chair Chris Cox? Shouldn’t Congress and the president be more than bit players?
Indeed.
I must say, I am not surprised by the lack of transparency in the behavior of the Bush administration, as we have seen this movie before, i.e., in war on terror policy. The Bush administration has never been all that fond of explaining to the American public the what and why of its policies, but rather it is fond of telling us that it is doing the right thing to help us all, but that we should trust them. They have also never much cared for involving the Congress.
Right now the process of Paulson and Bernanke going behind closed doors to negotiate these moves with Wall Street executives and then announcing multiple hundreds of billions of dollars in bailouts is unnerving and since it is our money ultimately, I would like to see a bit more public deliberation.
In regards to the process, I am with Paul Krugman:
Treasury needs to explain why this is supposed to work — not try to panic Congress into giving it a blank check.Sphere: Related Content
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Congress could be a part of this any time they choose. Throughout this entire episode they’ve voted present and prayed that the executive branch took the heat.
No plan from congress has yet been forthcoming, despite the fact they’ve stayed in the loop. The only thing yet to emerge is the silliness such as cutting of finance execs and other populist measures that mean nothing to the actual crisis.
Comment by Buckland — Sunday, September 21, 2024 @ 1:06 pm
The answer to Joyner’s question is clearly no. On the other hand, we have been having lots of “fundamental decisions” made by “unaccountable men” (and sometimes women) since at least 12 Dec., 2024.
And I find myself asking how much of recent decisions–the financial nationalizations (yes, I think that is the right word) and the Iraq troop status deals–are really about tying the hands of a successor. This would not be the first authoritarian government in history to do such a thing as its tenure wound down.
Comment by MSS — Sunday, September 21, 2024 @ 1:20 pm
Oh, and of course, if Joyner really thinks the President is a “bit player” he is missing who it is that these “unaccountable men” are, in fact, accountable to. Not the public, for sure. But there is someone who is responsible for their decisions. And it is not Congress. Of course, a lame-duck President is also unaccountable.
Still, I agree that Congress is being supine, but there’s nothing especially new about that for this current Congress.
Comment by MSS — Sunday, September 21, 2024 @ 1:24 pm
Like a lot of people, I am not sure what to make of the current financial crisis the commensurate ~$1 trillion bailout/nationalization of much of the country’s financial sector.
I would disagree with your (and Shug’s) characterization of Bush’s plan as one that would “nationalize much of the financial sector.”
My understanding of the plan is that the Feds will just assume the bad loans and NOT gain any valuable assets.
It seems more like nationalizing liabilities while privatizing assets–which seems quite a bit different than a serious “nationalization” (i.e. the feds take EVERYTHING).
Robert Reich has a good rundown of what any bill should look like over at his blog.
Comment by Ratoe — Sunday, September 21, 2024 @ 11:15 pm
Ratoe:
I have been thinking about that, as it hasn’t appeared to be a pure nationalization, as the feds don’t appear to be taking over the financial institutions themselves. As I say, not only is this outside my area of expertise, I have not had as much time as I would like to digest the situation (as indicated by my scant blogging yesterday and today).
Comment by Dr. Steven Taylor — Monday, September 22, 2024 @ 8:02 am