I think Congress ought to ‘bail-out’ the home owners who were predated upon by shady lenders. There are a hell of a lot more of them than there are ‘victim bankers.’

I know that we’d still need to bail out Wall Street but, frankly I’m done with this garbage. This is the end. Wall Street has shown, time and again, that it is not capable of acting responsibly so, what is our obligation to them?

I love how Wall Street claims that the reason they need to pay people out-sized bonuses is because of the ‘risk they’re assuming’ and yet whenever it comes to them actually losing money, in proportion to the amount risked, they come squealing to the government for a bail them out.

Sorry if this is an ill-considered rant. I’m pretty pissed off about this – it’s a never ending cycle that’s been going on since the civil war, this ‘business cycle,’ which is really just a euphemism for reckless entrepreneurs feeding at the trough to the point of an economic catastro-f**k.

Personally, I’m done with it.

To Ian: I think there is a big difference between micromanagement of Congress and Congressional direction. I do not worry as much about Congressional rancor as you do, though I am not suggesting that every provision in a bailout be subject to debate and a vote. If you are going to give the SecTreas such powers, you need to be very specific about what he is going to do with those powers, and include a mechanism whereby if he uses fifty billion dollars to buy the services of prostitutes or something there is some sort of recourse for Congress.

My point is, from what I’ve read there are better models for such bailouts on the books, both in the US and in other countries. Krguman cites the S&L scandal and the Swedish financial crisis as examples of smartly organized bailouts. When he says this one makes no sense, I tend to trust him. He has been consistently right in his economic analysis, form his claim that the private utilities were gouging California to his claim that the housing market was experiencing a bubble.

And the text of the proposed bailout act seems very vague, hastily put together, and frankly dangerous to democracy.

First, if we give Congress a big oversite role in the bailout, aren’t we (a) making it more likely that partisan, ideological concerns will interfere with practical solutions, and (b) create a situation where nobody can be held accountable for any outcome since any member of the 535-member Congress can point the finger at his or her political adversaries and say, “it’s their fault things didn’t work out”?

Second, is it clear that the current bailout plan includes specific plans about how assets will be re-packaged and sold? I thought the plan would give Paulson authority to buy these assets (with taxpayer money), and then it would be up to him to figure out how to deal with these assets.

Third, my problem with including specific language about what assets will be bought is that it may miss the point of the bailout. The point of the bailout isn’t for the federal government to buy and sell assets in order to make a profit; the point of the bailout is to save the financial institutions that are (unfortunately) needed to keep our economy going. If we set up rules that would prevent the US from buying certain assets — and then, as a result of the US not being able to buy those assets, these financial institutions suffer, causing economic havoc — won’t we have done wrong by the American taxpayer?

I share your concerns about the concentration of executive power, but I also have concerns about Congress trying to micromanage this extremely complicated situation — I’m worried that individual congresspeople will be tempted to demagogue issues. We’ve seen government shut-downs when partisan battle overcomes common sense. As I see it, we can’t afford an ineffective bailout plan — the consequences would be too severe for the American worker, the “fundamentals” of the economy, according to John McCain.

* Not strip Congress of its oversight power, giving carte blanche to the Secretary of Treasury.

* Krugman, in his posting notes that “historically, financial system rescues have involved seizing the troubled institutions and guaranteeing their debts; only after that did the government try to repackage and sell their assets.” We should follow the model of previous, effective rescues.

* The bailout proposal should include specific language about the terms by which taxpayer money can be used to buy debt. We need to prevent whoever holds the enormous powers enumerated in this proposal from buying worthless assets. Trusting the good faith of the Secretary of Treasury is not enough.

There seem to me to be common sense responses to the crisis, nothing fancy, no election necessary since the Democrats control Congress. If the Democratic Congress passes this bill as is, without demanding reasonable changes, it will have in effect given up its oversight of the economy, voluntarily transferring this power to the executive branch. Do we want a President McCain to have such powers in his hands, should he win?

Bad ideas don’t magically become good ideas just because there isn’t a clear alternative on the table.

But in this case, I have to ask: When you say this plan may be bad for the taxpayer, are you comparing it to what would befall the taxpayer if we did nothing? Or are you comparing it to another plan you think would be better? (Obviously, I don’t expect you to have a fully-developed economic plan in your back pocket, but are there specific suggestions you would propose. I’m just concerned about being obstructionist at a time when fast action may be necessary to avoid catastrophe.)

Regarding what is needed to prevent crises like this from occuring in the future, I don’t believe this plan is intended to address that issue. It’s obvious, however, that it will be up to the next Congress and the next President to put the right laws and regulations in place to protect us from this sort of thing — and it will be up to us to put pressure on them to do so.

Which brings us to the big question: Which candidate do we trust to guide us out of this immediate crisis and then do what it takes to protect us from similar crises in the future? A man who says he’s fundamentally against regulations and doesn’t really understand the economy very well? Or a man with an even temperment, a powerful analytic mind and a commitment to Democratic values regarding the proper regulation of the markets?

Because in a democracy, it’s the American voters who will ultimately appoint someone and say “fix this.”

It seems like the Roman Republic Senate, the Congress wants to appoint someone a dictator and say “fix this!”