Here's Hoping Congress Really Thinks Through "Solutions" to Our Economic Crises

by Deb Cupples |   It's pretty obvious that the U.S. government must somehow intervene in the fate of our financial institutions and markets, in order to spare our economy further damage.  I understand this.   

It doesn't matter that we'll likely discover that our current crises were caused by executives who took absurd risks with company funds (or engaged in questionable accounting) in order to personally pocket buckets of cash -- all enabled, if not encouraged, by the Bush Administration's anti-accountability (aka, "Free Market") ideology.  The New York Times reports:

"As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week.

"Lawmakers in both parties described the meeting in Ms. Pelosi’s office on Thursday night with Mr. Paulson and Mr. Bernanke as collaborative, and that they were prepared to put politics aside to address the needs of the American people.

"While Democrats initially said after the meeting that they planned to use the administration’s proposal of a huge rescue effort to win support for an economic stimulus package, they pulled back slightly on Friday morning, saying that their top priority was to help put together the bailout package and stabilize the economy.

"But it was clear they continued to examine ways to make clear that the government was stepping up not just to help the major financial firms but also to protect the interests of American taxpayers and families by safeguarding their pensions and college savings, and by preventing any further drying up of consumer credit." (NY Times)

It's nice to see both parties in Congress collaborating, but here's my fear: that our politicians will make decisions in a panic and fail to follow through on other relevant issues. 

Again, we do need to bail out major financial firms -- even if the people running them were laregly at fault for the gigantic mess we're now in.

What we don't need to do is let them get off scot free.  I'm not vengeful or blood thirsty.  I just think that our politicians need to push for real accountability and, in the process, create massive deterrents to keep cash-hungry corporate execs from ever putting us taxpayers (and shareholders and workers) in this position again.

Scandals like Enron, WorldCom and Tyco at the beginning of the millennium should have inspired Congress to create adequate regulations to protect investors and our nation's economy.  Apparently, this was not the case.

This time around, I hope that our politicians and bureaucrats avoid the temptation of finding sacrificial lambs (i.e., of merely appearing to be "doing something").  I hope they'll instead find out precisely what actions and decisions were responsible for bringing our nation's markets to the brink of disaster -- and who was responsible for them. 

Remember, corporations don't act -- any more than cars drive themselves.  The people running the corporations cause corporate actions.

This time around, I hope our politicians and bureaucrats will create sensible regulations and oversight, so as to decrease the chances that execs will cause such turmoil in the future.

I'm glad that Congress is considering relief in terms of an economic stimulus package including unemployment benefits and spending on public infrastructure (to create jobs).

Here's the catch: allocating money is not enough, especially where public-infrastructure projects are concerned. 

Chances are that government contractors would be involved in such projects.  I've written more than 100 posts about government contractors that wasted our tax dollars, padded their bills, or outright defrauded us taxpayers.  (See Govt. Contractors: Military and Govt. Contractors: Non-Military).

That said, I'm a bit nervous that this might become yet another free-for-all for contractors, which our nation certainly cannot afford (especially now).

To get the most bang for the taxpayers' bucks, federal officials will absolutely have to manage the contracting process differently than they have before.

First, they'll have to negotiate contracts, from the outset, in a way that protects us taxpayers (instead of the typically contractor-friendly way that enables contractors to legally rob us).  In part, that means no more cost-plus contracts.

Second, officials will absolutely have to monitor contractors' performance: something that they've been failing to do for years, partly because the Bush Adminsitration cut the very staff needed to do that job.

I understand Congress's desperate need to act quickly to stabilize our markets.  That does not mean that our politicians and bureaucrats are free to celebrate and turn their attention elsewhere once that task is accomplished.

At least House Oversight Committee Chair Henry  Waxman is looking into some of this -- and he's all about accountability.  But he cannot do it alone.

Let's hope that after the current adrenalin rush, our other politicians and bureaucrats will slow down, examine the root causes of our many problems, and methodically work toward resolving current issues and preventing future problems.

Memeorandum has commentary.

Other Buck Naked Politics Posts:

*Anti-Regulation Chickens Come Home to Roost, Stocks Down 5%

* McCain Would Fire Cox, but Would that Make A Difference?

* AIG's $85 Billion Bailout: See What Anti-Regulation Ideology can Do?

* Lehman Brothers Bankruptcy: What it Might Not Mean

* Obama Pummels McCain on Economic Policy

* Waxman Looking into Lehman, AIG and Interior Department

* John McCain says Economic Fundamentals Still Strong?

* Bailouts & Stimuli: Will Congress Encourage Bad Behavior?

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Comments

[TheBad]

Hi Deb, while they are at it why don't we just go ahead and double the welfare programs also. If your pork sucking liberal cronies have already started figuring out they cannot attach any more pork to the barrel. And if you want to know who to blame you better look at most of Washington. Yes that the Dems also.

Keep writing blogs. And stay away from fixing Washington. If you cannot identify all of the problem, then you cannot fix it.

WE The People, doesn't mean just your group.

[Deb Cupples (Buck Naked Politics)]

Hi Bad,

You're right: Dems and Republicans have taken pork. I wasn't addressing pork.

I don't understand why you seem to take my comments PERSONALLY. I don't know who you are.

I also don't think that Republican voters got us into this mess: just the Bush Administration with its insistence on anti-accountability policies.

That's not an affront to you or anyone who voted for Bush, as he duped a bunch of supporters.

If you are related to President Bush or any higher ups in the Administration, I do not intend my comments as a personal insult to them: just pointing out facts about their job performance and "ideology."

About welfare: I suppose our govt. could simply kill all those people who will lose their jobs and homes.

But our nation likely wouldn't do that -- given that it's a Christian nation. This means that we have to do something to help those people.

In fact, our economy will depend on making sure that consumer dollars are in circulation (otherwise, more businesses will fail, too).

That's the real reason politicians are talking about unemployment benefits and public works projects.