Details show devilish plan

The News Virginian
Published: September 23, 2008

Theologians describe God as non corporeal, meaning that he neither can be seen nor touched, making physical resemblances between the almighty and Hank Paulson difficult to discern. Undaunted, the Treasury secretary seeks what only God possesses and Congress can grant: omnipotence. Intervention, as its details unravel, appears more devilish than divine.

Testifying Tuesday with Federal Reserve Chairman Ben Bernanke before the Senate Banking Committee, Paulson waxed apocalyptic, warning that failure to grant swift approval of the Treasury Department’s requested $700 billion bailout of the housing and financial markets will herald an economic end of the world as we know it. Lawmakers chafe as a matter of reflex at the notion of swift action and so responded in Pavlovian fashion, with howls of objection.

Hounds from the left – our own Sen. Jim Webb, along with the ubiquitous Rep. Barney Frank, D-Mass., among them — swooped in with proposals to cap salaries for chief executives. Senate Banking Committee Chairman Christopher Dodd, D-Conn., the sweetheart loan recipient who embraces hypocrisy with the fervor of a child who has just been returned to his mother, proposed measures to save homeowners from foreclosure. Next, how about saving the Alaskan caribou? Maybe tomorrow.

Expert in slinging inanity over the back of crisis, Democrats fumed over the politics of it all. What, now, they have to work with Bush? Still, not every whine lacked merit. “We have been told repeatedly by this administration that the economy is fundamentally sound,” Rep. Mike McNulty, D-N.Y., told the Wall Street Journal, “and then all of a sudden they say the economy is going to collapse.” Well ... yes.

Conservatives fretted, too. As Paulson spoke bleakly, Bush’s frontmen, led by Vice President Dick Cheney, sought to rally Republican support. That waned on the interventionist vine, which a day ago appeared ripe. Paulson’s plan would assign him power over billions of dollars in assets, charging him with determining their value – Wall Street, notably, has struggled to do this well – and saddling him with the fate of the economy, all with minimal oversight.

The Republican Study Committee, whose membership includes about half of the Republicans in the House, is pursuing a free-market alternative, an idea that also was touted by former Gov. Jim Gilmore during a meeting Monday with The News Virginian’s editorial board. “Paulson is going to go in and make decisions about these loans and pay what he wants for them with no second-guessing,” Gilmore said. “That’s not a good idea.”

Further, it is one that might fail. Paulson has been the driving force in a succession of federal bailouts starting with Bear Stearns and extending to Fannie Mae and Freddie Mac and American International Group, each grab at taxpayer money executed with few or no questions asked. Vito Corleone operated more subtly. The product of Paulson’s rush for American wallets has been a worsening crisis.

To those seeking a free-market solution, we bid them Godspeed. A buyer for Alaska’s “Bridge to Nowhere” might sooner be discovered than one for billions of dollars in bad mortgages. As we learn more about Paulson’s plan, we find more in it to fear than in the economic Armageddon he projects. Enacting it might save the economy but cost us America. That price, we insist, is too steep.