When thinking about the current economic situation, the one thing on everyone’s mind is the proposed $700 billion bailout proposed by Treasury Secretary Henry Paulson and the George W. Bush administration. Multiple questions surround such an action-who exactly will benefit from the bailout? Is it too large or not large enough to mitigate the insolvency in the market that we have been audience to? The editorial board of The Miami Student believes that while we need a bailout, we must make sure the public is as much a beneficiary of whatever plan is proposed as are the executives and employees of the investment banks who would receive government aid.
As the economy continues to disintegrate, Congress debates its decision, causing confidence in the market to teeter on total collapse. This hesitation to approve the emergency plan and grant Paulson freer action may further harm the market. However, if Paulson is able to take the lead on the attempted economic recovery, there must be special care taken to ensure homeowners that relief will reach them soon. This step is important to not only reaffirm market confidence within the ranks of investment bankers and save financial institutions, but to make sure that if a precedent is set for major government action, it takes into account all Americans.
The pattern of bailing out and increasing government assistance has emerged since the first days of Bear-Sterns’ failure, and has seen more intervention as more institutions became insoluble. However, this board’s largest concern is the power that Paulson will gain in order to solve the crisis. We would like an oversight committee. The projected $700 billion plan is so extensive, and its timing is so unique, that oversight must be a well thought out aspect of the legislation. This would ensure that unilateral executive action is diminished and a power-sharing, inclusive approach is taken from within the government to ensure continuity after the change of administration happens in January.
We must not forget the impact our economy has on the global economic situation, especially with the role of Goldman Sachs and AIG. The lack of confidence in our economic order is not bound by the borders of countries, and the United States-as a major mover of the global economy-has a responsibility to do what it can in order to ensure national and international stability.