Just One Week

Apparently, the current plan by Secretary Paulson and the "leadership" in Congress is to have the Senate pass this bill, which has been loaded up with enough stuff to buy off support from both the liberal Democrats and the conservative Republicans who voted against the bailout bill before. The thinking is that the changes made to the plan (and the tax relief which was already in the works, but is now being bundled with the bailout), combined with the at least slight shift in calls to the switchboard after the market fall on Monday, will bring around enough votes to get it passed, particularly if the Senate goes first to add additional pressure to the deal.

I remain unconvinced of the need for any massive bailout at all. The SEC is easing the mark-to-market rule (which, as the linked article points out, itself is likely to cause a host of troubles down the road). That should allow the entities who are in trouble because their balance sheets appear technically insolvent as a result of the lack of a market for a goodly chunk of their assets.

The rest of the problem still seems to me to be primarily a result of firms with plenty of actual capital to lend refusing to lend it, because they fear that the firms they lend it to may have too much of this bad debt from the housing crisis and the earlier federal take-over of Fannie Mae and Freddie Mac, and thus are poor credit risks. Well, that's the sort of panic reaction that stems from focusing on only one possible solution, in this case a big bailout from helpful Uncle Sam. I'm betting that if and when Uncle Sam says "you're on your own, kid," all those smart financial minds think a little harder, and find a way to keep making money during this crisis.

Meanwhile, our political leaders who were warned clearly about the coming crisis but failed to take action about it are loading up a bill in typical "bipartisan" style, designed to buy just enough votes for passage. And, as so often, they're doing it under the cover of CRISIS, to justify passing the bill before most folks can read it, much less really comprehend it. Remember all right-thinking people now object to the PATRIOT Act and criticize Congress for passing it under the emotional haze of 9/11. Why let them do that again?

But maybe it is necessary. A lot of smart people seem to be saying so (and a lot of smart people are saying the opposite). But whatever its merits, it is clearly a HUGE decision, one which should not be made lightly. And given the responsibility many of these same political leaders bear, we have little reason to trust them not to hide a multitude of sins in this bill.

So I ask for something simple. The public should demand that any bill lie over for ONE WEEK before final passage by the House of Representatives. We should have Congressional hearings during that week, with economists and bankers and captains of industry all going on the record about that bill, what its impact would be, and why its passage is essential. At the end of 3 or 4 days of hearings, every Congressmen should return to his or her district and spend 2 or 3 days meeting with constituents and local bankers and business owners. THEN they can fly back to Washington and vote.

Is ONE WEEK too much to ask before handing over control of a massive chunk of the economy to a single, un-elected man?