I share the concern of many people that we should pause before plunging into an unmonitored, ill-defined $700 billion venture with the federal government buying (at what price? by what mechanism?) bad debt. I’m not at all confident that the people–Congress–who gorged at the Freddie Mac and Fannie Mae troughs are any better equipped than Hank Paulson to come up with procedures that might provide some reasonable oversight. And I’m not as sanguine as some that a delay of a few days or a week won’t make that much of a difference. But I do think that you can have concerns about the plan without opposing it outright.

Clearly we’re into William Goldman (”No one knows anything”) territory. Aside from the reminder that the really hard stuff is never made easier by “experience” ( i.e. if it’s hard there is not comparable experience that can easily be applied), I do think we have learned some hard lessons from another context–the war on terror–that might keep us out of trouble.

First, the more people who buy in, the less carping later. Nancy Pelosi wants to take some responsibility for delaying implementation and add some bells and whistles (e.g. greater oversight) to the legislation? My attitude: let her (within reason). But no, she shouldn’t use this as an excuse to lard up the bill with more spending for her favorite constituencies. And whatever dithering Congress does should have a short deadline. (I suspect that she realizes that if she drags this out too long or bollixes up a reasonable deal she risks severely diminishing, if not losing, her majority.)

Second, transparency does matter. Everyone — especially the public — should know exactly who is doing what and how. Barring some compelling reason, we should lay it all out. It will wind up on the front page of the New York Times anyway, so better to put the deliberations, the implementation and all the ground rules out for public consumption.

Third, the solution is not “to go to the mall.” In other words, everyone has to suffer. I’ll throw my lot in with the populist suggestion (which John McCain seems to have adopted) that CEO’s whose companies get bailed out can’t continue to take down enormous compensation packages. Not every overextended homeowner should get a break on a mortgage to which he willingly obligated himself. And those Congressmen who took campaign donations from Freddie and Fannie should give the money back to the Treasury–every last dime.

Some of this isn’t very fiscally conservative and some purists may object to the whole notion of the federal government’s massive intervention into the economy. I plead guilty to being less than ideologically pristine. But many of the failures here were ones of political judgment and lack of accountability. At least that part we can improve upon.

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This entry was posted on Monday, September 22nd, 2008 at 11:40 AM and is filed under Contentions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.