Holy Shit, Was I Wrong

The further we get from the big suck-down that was the end of Lehman Bros., the less essential a $700B bailout looks. I was all in favor of it when it was first proposed, too, mainly because the disappearance in short order of half of the investment banks in this country looked like a true crisis, and I believe that, in times of crisis, the government has an obligation to step in. But shame on me. Henry Paulson actually gave away the shameful secret motive behind the conveniently-already-fully-written bailout plan on the very first day, when he mentioned creating a new Resolution Trust Corporation. That was the giveaway that the deal was itself a giveaway. See, the RTC took over the loans of failed S&Ls and disposed of them in a responsible, timely manner.

A new RTC, per Paulson, would buy the bad debt of companies that haven't failed yet. Essentially, this would be like taxpayers taking on worthless investments so that the private companies could go on about their merry ways. This is a huge difference.

Without accountability, without an equity stake for the public, without guaranteed repayment, without increased federal oversight (I don't, still, give a fuck about taking away CEO compensation), there can be no bailout. I was wrong.