Monday, September 22, 2008

Attempted Revolution

As one of the contributor's to Jim Cramer's said, "We just had a revolution". Not quite. Although by the end of the day last Friday it seemed inevitable that Congress would authorize Henry Paulson's proposed bailout of the entire Financial System, today Congress is pushing back, as some commentator's like Paul Krugman weigh in and point out that this bailout may not work unless it pays inflated values for the toxic securities. In which case the taxpayers get stuck with the bill and the financial companies make money on the deal.

Of course the bailout of AIG, the insurance giant, is already accomplished. But it looks like this last step may not be a certainty, and hopefully it won't be. What a way to make policy - basically at gunpoint. What can't be accomplished in decades by the legislative process can be engineered in 10 days if you have a sufficiently large crisis.

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