President Bush’s initial proposal for the Wall Street bailout was to provide Treasury Secretary Paulson with $700 billion and the power to bail out firms without any oversight from congress or other federal entities. The proposal, only three pages long, was simple and stark as it conveyed the seriousness of the matter.
Congress is now determining what additional oversight and powers, if any, are needed. This proposal is striking for a president that has had little interference with the market over his term. As a true capitalist, President Bush has been operating under the assumption that the market will work itself out. The proposal put forth on Saturday is quite different and says to the world that the market is faltering.
The announcement today of Goldman Sachs and Morgan Stanley to become bank holding companies effectively ended the near 20 year reign of the Wall Street investment firm that have posted skyrocketing profits. We may not know the true effects of events over the past week, but what is clear is that the economy is now number one in the campaign and the next President will have to guide the country an even higher federal deficit and changing market.
More analysis will come as congress moves forward with a final bail out bill.
-Timothy Little, Editor-in-Chief
