Remember when Bernanke and Paulson went to Capitol Hill with their bailout plan?
PAULSON ON NEED FOR PROGRAM
"We have proposed a program to remove troubled assets from
the system -- a program we analyzed internally for months, and
had hoped would never be necessary.
"Under our proposal, we would use market mechanisms
available to small banks, credit unions, and thrifts, across
the country -- not just big banks. These mechanisms will help
set values of complex, illiquid mortgage and mortgage-related
securities to unclog our credit and capital markets, and make
it easier for private investors to purchase these securities
and for financial institutions to raise more capital."
They went before Congress and asked for a blank check in order to buy up those troubled assets to give the system time to recover, a plan they said they "analyzed internally for months".
That was then -- this is now:
Treasury Secretary Henry Paulson on Wednesday said he was backing away from buying troubled mortgage assets using a $700 billion bailout fund, instead favoring a second round of capital injections into financial institutions that would match private funds.
Wow! Color me shocked -- a Bush appointee gives Congress a dog-and-pony show, then once he has the money decides, "meh! I never really liked that plan -- we're gonna' do something else."
Remember how they wanted oversight, even though the draft of the plan specifically excluded oversight?
PAULSON ON OVERSIGHT
"I am not looking for extraordinary power and when we came
to Congressional leaders on Thursday night they said don't come
to us with a fait accompli. Give us your ideas and let us work
together.
"So we sent up several pages and then everyone said well
you don't want oversight. We need and want oversight,
transparency, protection and we got to do in a way in which we
can be effective and get this program working and make it
work."
And yet, once they got the money decided the public doesn't need to know which banks are getting funds, or for what.
I don't know if what they're doing will help or not, but that's not the point. Now is not the time for the administration to just go off on its own -- we need to all be on the same page, and this isn't the way to do that.
Where are the congressional Democrats on this? They need to be hammering on Bernanke and Paulson about this.
Update 1: I changed the title from $700B Blank Check to $700B Bait-and-switch since that is more accurate.