Tuesday, September 30, 2008

Yesterday reconsidered

The excitement / despair reflected in the 777 point drop in the Dow yesterday has put the failure of the bailout bill in an odd and unforgiving light. Much has been made of the "failure" of Congress to act, and heavy criticism has been leveled at Boehner and Pelosi, and on all those who voted "no" on the bill.

From where I sit, if we are going to pass a bad bill, it can wait till next week. Maybe - just maybe - we can get a good bill passed instead, but in any case I can hardly be disappointed that we "failed" to rush a bad bill to the President's desk.

And make no mistake - this bill gave way too much leeway to Secretary Paulson and committed far too much money to a purpose that may not be as important to our economy as preserving social security, improving educational opportunities, and providing middle class tax relief - not to mention universal health insurance, investment in green industries, enhanced re-training and extended unemployment benefits, and a stay of execution for those facing foreclosure. How many of these will be able to proceed once we have spent $700 billion to save Goldman Sachs?

The reason the bill failed is that it is a bad bill, and because a lot of Americans (including this American) wrote to their elected representatives and expressed their disapproval. I don't know what failed yesterday, but it wasn't democracy.

As for the stock market, it hasn't grown at all in 8 years - in real terms it is down much more than the drop that took place yesterday. This in itself is not a crisis. At some point, the stock market will rebound -- as long as we don't do anything foolish -- and borrowing $700 billion from the Chinese to let Hank Paulson buy toxic securities from mismanaged bankers is pretty goddam foolish.

After 8 years of shoot-from-the-hip, government-by-gut-instinct, aren't we ready for something better? Let's not rush into something we cannot afford.

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posted at 9:08:00 AM by Neil

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