Paulson's Personal Patriot Act: World Pees On Bailout Plan

Fortunately, Hank Paulson is caving on some key bailout issues, and the plan is getting better. In the meantime, the NYT’s Andrew Ross Sorkin, the Democrats, and just about every economist on the planet go to town on the original. Here’s Sorkin:

Joshua Rosner, a managing director at Graham Fisher & Company, says TARP [Troubled Asset Relief Plan] should stand for “Total Abdication of Responsibility to the Public.” He says it is “a clear abdication of all Congressional oversight and fiscal authorities to a secretary of Treasury that has bungled this crisis from the beginning.”

He argues that the bill grants “greater powers to the secretary of the Treasury than even the president enjoys.”

The bigger issue is that the bill effectively creates protections not just for the Treasury, but for the executives on Wall Street who created this near Armageddon. Mr. Rosner says that the draft bill “prevents judicial review that could allow the protection of decisions that create false marks, hide prior marks, or could be used to prevent civil or criminal prosecution in situations where a management knowingly provided false marks that aided the growth of this crisis of confidence.”

False marks — using mark-to-market accounting to hide the true value of security, rather than disclose it honestly — has a lot to do with why Jeffrey Skilling, the former Enron chief executive, is in jail.  More at NYT >

The main beef of the Congressional sound-bite jawboning on TV this morning is that the plan bails out fat cats instead of homeowners (true) and that a day or two of evaluation is sensible. We couldn’t agree more.  If a couple of banks drop dead in the meantime, fine.  They’re not going to start lending again immediately, anyway, even if we write a $700 billion check this afternoon.

See Also:
Meredith Whitney: Bailout Won’t Do Jack
Paulson Caving, Plan Getting Better

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.