The Bailout Rush: Time Is Money or Haste Makes Waste?
For some, rushed bailout has echoes of other hasty Bush administration policies.
Sept. 24, 2008 — -- Though the ongoing financial crisis was years in the making and its fallout will undoubtedly shape U.S. fiscal policy for years to come, the secretary of the treasury urged Congress Tuesday to act "quickly and cleanly" on approving a multibillion-dollar bailout measure.
Time is money, goes the old proverb, but members of Congress -- both Democrat and Republican -- as well as a chorus of economists have questioned the urgency with which Bush administration officials want to act.
They want a measure that would not only allow the federal government to buy up and resell $700 billion worth of troubled mortgages, but also put much of the authority to do so directly into the hands of the treasury secretary.
That secretary, Henry Paulson, urged lawmakers "to avoid slowing [the bill] down with other provisions that are unrelated or don't have broad support."
Each of the groups calling for caution on the bailout bill has its reasons for doing so -- be it the ideology of free-market Republicans, the politics of regulation-prone Democrats or the practical concerns of independent economists.
While Paulson and Federal Reserve chairman Ben Bernanke, who also pleaded Tuesday the case for quick action, are well regarded in the business community, some critics have compared the bailout to the haste with which the Bush administration made the case for war in Iraq.
"This was years in the making, can't Congress wait a week to actually think about it?" asked Barry L. Ritholtz, CEO of Fusion IQ, an institutional research firm and author of "Bailout Nation: How Easy Money Corrupted Wall Street and Shook the World Economy."
"Weren't these the same guys who two months ago told us everything was fine? The administration is proposing the biggest bailout in history. Shouldn't we not rush into this?" he asked.
Sen. Jon Tester, D-Mont., echoed that sentiment on Capitol Hill, asking: "Why do we have one week to determine $700 billion that has to be appropriated or this country's financial system goes down the pipes?"
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