What does it take to get American editorial pages honest-to-God riled up about something? In addition to the expected criticism from the left, Hank Paulson's $700 billion bank bailout has been savaged by no less a conservative than Newt Gingrich, who wrote, "we’re using the taxpayers’ money to hire people to save their friends with even more taxpayer money." Among the more strenuous Congressional opponents is the Republican senator from Alabama who chairs the Senate banking committee and said he worries the bailout "is neither workable nor comprehensive despite its enormous price tag." The Monday plunge in the dollar and U.S. stocks was widely seen as rendering judgement on the cost and effectiveness of the plan, unveiled over the weekend. And yet, save for some quibbling about oversight, the Times' Tuesday editorial on the matter treats the bailout as a given:
Treasury Secretary Henry Paulson must craft and execute the bailout in a way that persuades Wall Street and the global financial system that they will be saved while protecting the American taxpayers’ $700 billion investment.
The Times' finance reporter, Andrew Ross Sorkin, writes frequently from the perspective of business executives and could hardly be called a populist. But his own Tuesday column on the bailout is scathing, going much further than the editorial:
The hypocrisy is thick... the most amazing power grab in the history of the American economy...
There is nothing in the bill that will prevent these problems from happening again...
The sickest part is that Wall Street is lining up at the trough for a piece of the action, lobbying to run some of the $700 billion fund — and take huge fees — for their own mess.
The Wall Street Journal held its fire Tuesday after a lengthy editorial Monday recapping the many alleged ways government intervention has screwed up the economy — and stopping short of applying this lesson the biggest intervention yet.
It took a British paper, the Financial Times, to speak baldly. Like the Times, the paper went after the lax oversight in Paulson's legislation, which literally said his decisions "are non-reviewable... by any court of law or administrative agency." But the paper's editorial also went after the meat of the plan itself, saying it "had deep inherent flaws" in how it will determine prices and concluding with a call for a more powerful "alternative option quite soon."
Paulson is pressuring Congress to accept extraordinary amounts of debt extraordinarily quickly. America's newspapers, or what's left of them, should at least be keeping up. (Or maybe everyone would feel more comfortable leaving the analysis in James Cramer's trusty hands?)