Right now, Congressional Democrats are buying into a bailout plan that lacks details. There's a huge rush to take action, or else the world as we know it will end, or so we're told (sound familiar?). Why the rush, and why hasn't Chris Dodd, Chairman of the Senate Banking Committee, provided details? Here's some analysis by Paul Krugman:
[T]he bipartisan "agreement on principles" released on Thursday looks a lot better than the original Paulson plan. In fact, it puts Mr. Paulson himself under much-needed adult supervision, calling for an oversight board "with cease and desist authority." It also limits Mr. Paulson's allowance: he only (only!) gets to use $250 billion right away.
Meanwhile, the agreement calls for limits on executive pay at firms that get federal money. Most important, it "requires that any transaction include equity sharing."
Why is that so important? ... What taxpayers should get is what people who provide capital are entitled to: a share in ownership. And that's what the equity sharing is about.
The trouble is no one knows what that equity share is.
What prices will taxpayers pay to take over some of that toxic waste? How much equity will they get in return? Those numbers will make all the difference.
Neither Chris Dodd nor Barney Frank nor anyone else on the banking committee seems to want to give out any details ...
Other plans have been suggested as well, including this one by James Galbraith, who suggests the bailout isn't even necessary, and this one by Bernie Sanders.
Clearly there are a lot of ideas being left on the table in a rush to .... where, exactly? The last time Congress was bullied and panicked into making a rash decision like this, we ended up in Iraq.
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