The Price of Panic


By Joe Campbell
September 23rd, 2008


 

Seeing this headline in the New York Post made me furious. The Democrats – and a number of Republicans – are insisting on some basic accountability measures and a pledge that they will be able to pass some sort of relief for those affected by the crisis who aren’t millionaires. Each of these requests is reasonable. The first request is absolutely essential. The Post‘s attempts to “stampede the herd” into accepting whatever it is Paulson wants are dangerous.

Everyone from Newt Gingrich to Paul Krugman to William Kristol to Matt Yglesias to NRO’s Yuval Levin has urged caution and some sort of oversight mechanism as the least.

The proposed bill would give Secretary Paulson authority to “take such actions as the Secretary deems necessary to carry out the authorities in this Act,” giving him extremely broad powers to unilaterally control the market in addition to the $700 billion. In addition to these dictatorial powers, Paulson would be granted legal immunity for all of his actions:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Although I doubt Paulson would use this crisis to personally profit – nothing in the law would prevent him. And if he did, no action could be taken against him. This is incredibly reckless.

This law would remain in effect for two years – which would allow Obama’s Secretary of the Treasury as well as Paulson to, in exercising authority under this law, do virtually anything and be immune from any consequences.

This is how the Patriot Act was pushed through Congress in the dead of night, with no one reading the weighty tome. This is how democracies are given away in a moment of crisis, in that Roman tradition of granting a temporary dictatorship over Rome until a crisis passes. Power is never given away easily – and so, in the end, the democracy with temporary dictators became a permanent dictatorship. In this age of terrorism and globalization, the crisis is never fully past us; and a new one is always on the horizon.

I don’t think anyone has any definite idea about what will work in this situation. And this is a time for pragmatism, not ideology. But even – and especially – in a crisis, there must be accountability and limits. This fear-mongering by the Post and other Republican puppets represents the worst impulse we can have at this time. We must act quickly but deliberately – because in our understandable haste, we might accidentally give away more than we intend.

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2 Responses to “The Price of Panic”

  1. Kim Says:

    I think you have to apply some evolutionary principles here :- If you don’t select out the bad elements and select in the good elements the species ( eg. the USA ) will die out . As such the people who caused the problems must not be rewarded but those who are doing things right must be saved . The solution is very simple – extend a FDIC style guarantee to each investor – as such each investor is guaranteed to $1M – irrespective of how much they have invested – ie. whether they have $1M or $1B invested . As such you preserve the small investors – who are largely not a major part of the problem , and select out the rich who have invested unwisely – who are largely a major part of the problem . Those of the rich who have invested wisely will largely survive with their investments intact . As such the economy , through natural selection , will become stronger and the level of the bailout will be minimized .

  2. Wall Street’s Fraudulent $700 Billion Bailout | Bill's Links And More Says:

    […] thing this country needs is to give any part of the Bush administration more unreviewable power. Bush coerced Congress into passing illegal legislation after the attacks of 9/11, and Bush is now trying to coerce Congress into giving Treasury Secretary […]

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