Turns out that Gordon was full of it...

What we need now are more secret rooms...

The political and economic worlds are fascinating of late.  I must admit, though, that I am watching this all unfold rather dispassionately, knowing that my investments are mostly in S&P and International Stock funds and that they are not going anywhere for 35 years.  

 

I enjoyed being able to take a week off focusing on the election to focus on the economy, which is far and away more interesting.  I was quietly supportive of the approach being pursued, until I read the plan.  Hank Paulson is a bright guy, but he is still a robber baron of the banking industry and I must admit the plan reads like using Republican ideas (bailout blind behind closed doors) to fix a Republican economic strategy failure (de-regulation and evisceration of what regulatory agencies are left standing).  Paul Krugman in today's NY Times gets it quite right.  They are proposing to attack the wrong component of the problem and they are doing it in an un-transparent (is that a word?  How about opaque) manner that runs contrary to what investors need right now.  The market thrives on security.  It is why we got into this mess in the first place.  Bankers were trying to artificially minimize risk.  It turns out that this mitigation was really only superficial and not tactile.  The big problem is that no one knew how the whole house of cards system worked.  Certain people knew how certain facets worked, but no one had command of the entire problem.  We don’t necessarily need more regulation but we do need laws that prohibit the market from tying itself in such an idiotic and inept snare again.  The last thing we should do is empower the Treasury Secretary to go off and spend upwards of $700 billion without any agency or Congress being able to ask any questions en route.  Bad news!  

 

We'll see if Congress can fix the bill or if they will just gum it up even worse.  I have heard some good proposals (executive compensation concessions) and some really idiotic ones (tax increases to offset this expenditure).  I am totally opposed to passing the proposed legislation as drafted by the Bush administration.  They talk about urgency, like they talked about the urgency of passing the PATRIOT Act and the Authorization for the use of force in Iraq.  I say slow down, and if desperate Congressmen and women are a week late getting home to campaign; tough beans!