This is always the refuge used to justify governmental action where no action is warranted. I don’t believe these bailouts are helpful in the least. I think they are counterproductive and will simply drag things out, the same way the new deal dragged out the depression until the entire world went to war and reset the world economy. Hopefully it won’t take that much to undo the damage being done today.

What I really dont understand is why he didnt (doesnt) go to the bankers and tell them that he owns them now, and if they dont start lending, they will go bankrupt, because he’ll pull his stake.

Now, where is that list of pork projects that needs to be scrutinized?

There were people at the time suggesting that the FDIC pump liquidity into the system, and that monetary policy could be used without a fiscal component.

Those people were so sufficiently ignored at the time, that nobody remembers they even existed.

Paulson is an embarassment at best. At worst, he screwed up our country in more ways than one.

I am amazed that more conservatives aren’t really really angry about the “one and only plan to save us all from certain doom”

Because if you want investors to REALLY panic, the best way to do that is to say “okay, these circumstances are extraordinary and we are going to change the rules.” And have this followed a few weeks later by “Remember that old rule change? Forget them, we’re changing the rules again.”

Let me ask you a rational question. Let’s say that you are debating between putting a small windfall of money into either the stock market or into your mattress. You know that your mattress will have the exact same amount of money you put into it today in two months and you know exactly what the rules are.

You don’t know what the rules will be for the stock market in 2 months. You don’t know that those rules, whatever they are, will be the same rules as in 4 months. And you don’t know that THOSE rules, whatever they are, will be the same rules as in 12.

Where are you more likely to put your money?

Is Paulsen’s plan decreasing irrationality or increasing it?

Would passing no plan at all (that is to say, keeping the same rules we’ve had in place for a good long while) have decreased irrationality or increased it?

There’s no way to “prove” the answers I’ve reached… but I’m pretty sure that the fact that I can’t “prove” them doesn’t invalidate the thought process in reaching them.

Certainly not to the point where “you can’t prove otherwise” is a particularly strong argument in why Paulsen’s plan was better (no matter how much “good faith” lies behind it).

You can’t prove that they would be better.

And as for the question of “well, do you think that the investors don’t know what the bailout will look like in 2 weeks or 2 months because Paulsen has changed his mind so many times that he is doing more to create (psychological) uncertainty than to assuage it?”, well… the answer is we don’t know and you can’t prove anything.

During the New Deal, parts were challenged in court. There was a lot of public debate. FDR modified parts of his plans to accommodate objections.

The Paulson Plan could have been sold as we need to have flexibility and a big checkbook. It wasn’t.

Instead, it was sold as “other plans aren’t feasible” (this conclusion is rendered false by those implementing TARP) and “this MUST be done now” (how many mortgage-based securities has the government purchased).

So yes, this is in my view self-governance at its most vulnerable. The Founding Fathers understood that an informed and grounded public and a challenging and curious media were required for self governance.

The media coverage was incredibly shallow, as was the public debate.

So yes, for those who occassionally think about the big picture, the quality of the debate did make me think (for a moment) that self-governance was in jeopardy over the long haul.

So yes, it did cause me to doubt self governance as a concept more than anything else I have seen.

But to act like suddenly now, this bill is so horrible that it’s reason to question our system of government, I think is laughable.