Later today I’ll be off to CNN to tape an appearance for the Glenn Beck program on Headline News. I’m scheduled to appear with Corner contributor Amy Holmes and radio talk show host Michael Reagan.
The topic is — surprise! — the bailout/rescue, and who has the best policy –candidates and parties — for the aftermath of the bailout.
Over the past days, I’ve become a reluctant supporter, or at least acknowledging that what the Paulson plan aims to do has to be done. You can’t say, “this will take care of itself” or, “let the markets work,” unless you’re comfortable with the stock market really crashing (several thousand points), and continuing to decline for a long stretch, with serious repercussions for the entire economy. An assessment from 2000 estimated that a drop in the DJIA from 11,000 to 8500 would mean a drop in household wealth of at least $4 trillion. The housing market would probably not recover for several years.
I’m noticing that the members of Congress who are on committees that deal with financial issues are (generally) on board with the plan, and the opposition seems to be coming from rank-and-file members, who, it seems safe to say, have less familiarity of the details of how the markets work. There seems to be a sense among some folk that if they don’t own stock themselves, a stock market crash wouldn’t affect them.
I can see a lot of reasons to not like this proposal. But I can see a lot more reasons why inaction is worse.