Becker Blog

The world according to Brian Becker

In Support of Schumer’s Plan.

Posted by Brian Becker on September 24, 2008

While watching the Senate Banking Committee hearing on the Treasury’s proposed Wall Street bailout plan today, I was intrigued by Senator Chuck Schumer’s plan for the bailout. He argued that since the Treasury is not going to be handing out the $700 billion all at once, but rather in increments over the next year, why don’t we just approve a smaller amount for now and review how effective it has been to stop the bleeding in a few months? Say we give you 150 or 200 billion now, and when congress reconvenes, if needed, we can approve the rest of the money.

In my opinion this makes the best out of a terrible situation. With this administration’s track record on this kind of thing, we should all be very skeptical of giving them a blank check on anything, especially since most of them will be gone come January 20th. I agree that something has to be done, but rushing into passing this, which they even admit isn’t guaranteed to work, does not bode well with so much money at stake. Senator Schumer has the right idea. Give them the authority to begin working on this, but don’t grant them everything they want right away.

When asked what he thought of that idea, Paulson simply said he thought it would be “a grave mistake.” He didn’t really explain why it would be a mistake, just that it would be. Maybe hes right, but common sense tells me hes wrong. Then again, common sense and Wall Street don’t always go together, or we wouldn’t be in this predicament in the first place.

Update: It seems Jim Cramer (“Mad Money” host) agrees with it as well. Seeing as he is an expert on this stuff, maybe I’m on the right side of this.

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