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Who Will Manage the Bailout?



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Now that we own all that financial stuff, and are handing out money like Christmas presents, who is going to be in charge? Who will make the executive decisions about unwinding businesses, units of institutions and particular assets? Who gets to decide how long to hold, or when to sell the distressed assets? What will they do with the profits, if there are any? Will the next president appoint more bankers to run Treasury? Which bankers? Does anyone else know how to value these things?

I know a small handful of investment bankers who are both highly successful and principled libertarians. As a rule they keep their politics to themselves.  One of the 20 or so guys on Wall Street with both those skills and views — to ensure that taxpayers don’t get taken to the cleaners —  is the change we are waiting for now.  Can John McCain find someone like that? Would Barack Obama even talk to someone like that? (They rarely write checks to Democrats. And Obama recently told Bill O’Reilly that he doesn’t personally have any right-wing friends.)  Who will Obama put in charge of the hen house? No one he knows who has experience, has good experience.

It’s a great pity that McCain-Palin, nice idea though they are, aren’t really up to it either. While I accept that in life we are lucky to mostly end up with the lesser of evils, this year it is going to be the evil of the lessers.

Here is a great reader letter on the subject:

“Now that we have a bailout bill, representing the largest potential increase not just in government’s bulk but in hands-on involvement with the economy, I think the issue of who is in charge of *that one program* may be the most consequential question the election will answer.I don’t know if this is a question McCain can win with. On one hand I think he can make a lot of hay by saying that we need someone who’s never been a friend to the sort of insider log-rolling that partly explains why we’re stuck where we are. On the other hand, his profound and obvious lack of engagement with economic issues–on which Palin provides no succor either–diminishes his own credentials, and I think simple attacks on Obama’s liberalism, however justified, will only remind people of this. The problem is that the past eight years have been successfully defined as “the Bush era,” despite the fact that in regulatory and policy terms, they were almost entirely bipartisan. Since McCain/Palin haven’t articulated an independent vision, they are essentially stuck saying, “you think it’s bad now, just wait until you elect the other guy who has a totally different set of ideas.”I think the interesting question is whether Mitt would have done much better or much worse. Clearly he is a hundred times more knowledgable than the fighter pilot or the community organizer. I am 95% sure that he’d have a lot more practical ability to really manage this thing. But, it is hard to imagine someone who could more easily be painted as an actual agent of the apocalypse. “I opposed Mitt from day one, because I was certain that a rich, successful white guy would be the last person elected this cycle. And he is kind of stiff, which wouldn’t have played well against Obama or Hillary.  Alas, there are no do-overs on big stuff.  Whatever his flaw, Romney’s particular expertise, and approach would be comforting right now.  John McCain — get him on board as a big surrogate, and promise him whatever job he wants. You need him now.


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