Truth Vs. Spin

It's sad to say, but the country is being misled by the President and leaders in Congress. Instead of plain spoken truth, Democrat and Republican leaders in support of the Wall Street Bailout bill (now $850 billion as a result of the Senate-passed version which added on multiple provisions that have nothing to do with the crisis) have issued only spin and half-truths. Let's break it down:

Spin: The Wall Street Bailout bill will prevent executives on Wall Street from taking home multi-million dollar paychecks.
Fact: While the bill contains rhetoric to this effect, it does not have any provisions to enforce this measure.

Spin: The Wall Street Bailout bill will help homeowners prevent foreclosures.
Fact: Again the bill expresses the sense that the Treasury Secretary should use some of the monies to help homeowners, but there are no enforcement provisions to ensure that this will happen.

Spin: The Wall Street Bailout bill has oversight provisions that will ensure the $700 billion (now $850 billion) will be well spent.
Fact: The two oversight provisions contained in the bill--a Congressional oversight board and an entity whose members are appointed jointly by the President and Congress (with the majority of appointments going to the Republicans)--contain no enforcement provisions that will allow these entities to stop the actions of the Treasury Secretary should his spending prove off the mark.

Spin: The Wall Street Bailout bill will get our credit markets going again and save our economy from destruction.
Fact: Treasury Secretary Paulson has admitted that he does not know whether this bill will have the intended effect of bringing full function back to the credit markets. There are many economist who have suggested that it won't. Consider the following quote from economist Dean Baker, Co-Director of the Center for Economic and Policy Research in Washington, DC.

"How do we go about getting the banks in order? Almost every economist I know rejects the Paulson approach and argues instead for directly injecting capital into the banks. The taxpayers give them the money and then we own some, or all, of the bank. (That's what Warren Buffet did with Goldman Sachs.)

This isn't about begging for a sliver of equity as a concession for a $700 billion bailout, this is about constructing a bank rescue the way that business people would do it. We have an interest in a well-operating financial system. There is zero public interest in giving away taxpayer dollars to the Wall Street banks and their executives."

Consider too the words of economist Joseph E. Stiglitz-who won a Nobel Prize in Economics in 2001:

“No private firm was willing to buy these toxic mortgages at what the seller thought was a reasonable price,” he wrote. “They finally found a sucker who would take them off their hands -- called the American taxpayer.”