Bailout Nation — Hell No, Mr. Paulson

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As Jason notes below (and in my comment) the scope of this bailout just gets bigger. Now we apparently are going to be on the hook for foreign banks (whose expose to this toxic stuff is worse than many of our own banks) and for the credit card debt your cousin Stewart racked up on vacation in Cabo.

Today, lots of very smart financial heads have been responding to the bailout proposal:
Robert Kuttner; Robert Reich; and Bob Borosage, and Dean Baker (this is a very detailed set of principles to guide the restructuring).

Tales of the Economic Fallout

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Earlier in the week, Duffy asked to be pointed to some writing that might be in favor of or justify the current bailouts. I haven’t read anything other than fairly glib variations on the “too big to fail” theme, but here is some reading (and listening) of how we got here and some thinking that I had not heard previously:

The NYT Freakonomics blog has a very cogent history of recent events.

Wednesday, Fresh Air had a long interview with Michael Greenberger who explains in clear and riveting detail the shadow economy that is being protected by the current actions of the Fed. Do yourself a favor and listen to all 40, 45 minutes of this. (You can get this as a podcast from iTunes, too, for the next week or 10 days) I highly recommend this — Greenberger is not all that pessimistic about the economy, but he is critical of the management and policies that got us here. You may or may not agree with his diagnosis, but his description of the current state of the board is completely vital.

Bailout Nation — The Power Grab

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Unstable Isotope pointed us to this draft of the bailout legislation earlier today. Look closely (highlighting mine):

(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Leadership

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Obama is talking about addressing the issues (with his financial team in attendance) and urging some bipartisanship, while McCain is whining and contributing to his epic flail. [youtube]http://www.youtube.com/watch?v=pmfeesYmx1Y&eurl=http://www.jedreport.com/[/youtube] This is…

The

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I'm just posting this entry from Barry Ritholtz at The Big Picture in its entirety, because it is that good. From Mr. Ritholtz: "I am having a hard time keeping…