Bailout Proposal Blowback

In recent days I have argued that this plan makes no economic
sense and that whatever Paulson / Bernanke cook up to try to
unchoke the financial markets, it better not chase everyone
back into the inflation hedge trades. Well, BINGO! Today, the
US dollar fell dramatically against the Euro, and the price of oil
soared $25 bl. to close to $130. On top of this, Congress, shoved
into a corner by receiving a three page bailout document a week
before adjournment for the election, has wisely decided to vet
this document thoroughly, and of course, to start adding lights,
decorations and tinsel to the world's most expensive Christmas
tree.

From my perspective, a lameduck administration and Congress
have no business trying to do a massive, far ranging program
of this sort. That should be the work of a new administration
and a new Congress, both set for Jan. 2009. And it should not
be a case of act in haste and repent at leisure. If the markets
cannot wait a few months for a sensible overhaul of US priorities,
the system is simply too fragile to "fix" and a large outlay of
funds in the short run will simply be wasted.

The credibility of GWB and his guys is being shredded again
with this latest blowback. It is time for the candidates for
president to find their voices and to tell voters what
initiatives would best serve US interests instead of hiding
behind a badly discredited administration.

My concern after today is that more folly lies ahead in
the short run, but I would also ask you to accept my apology
for the editorial. I promise to get back to business.