Outside Editorial: Put the brakes on rushed bailout plan

Posted: Thursday, September 25, 2008

Faced with what could be the worst financial crisis since the Depression, Congress has before it the worst possible solution: a Bush administration plan to hand over billions in taxpayers' money to the Treasury secretary to bail out failed financial giants, with zero accountability to anyone - not Congress, not the public, not even the courts.

President Bush's solution would make Treasury Secretary Henry Paulson "King Henry," as Newsweek aptly proclaims. He would be given $700 billion - about $2,500 per each American citizen - to buy mortgage-linked investments, and his use of the money would be beyond the review of Congress. Any decisions of the secretary "pursuant to the act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

That is straight from the playbook of a Third World dictatorship. What happened to the system of checks and balances that has been the foundation of this democracy?

No individual should have this much power, but especially not Paulson. His loyalties are not to the public but to the industry he'd be lavishing taxpayers' money on: He's a former Goldman Sachs CEO; his brother worked for Lehman Brothers. By deciding whose bad loans to buy and how much over market to pay for them, Paulson could enrich his friends and, indirectly, himself. He presumably would leave office with Bush, but he could hand out a lot of your money between now and January.

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