The great bailout of ’08: must-reads of the week

Every hour of every day brings reams of fresh news reports and commentaries on the Wall Street crisis and the competing bailout proposals wending their way through Congress, but that doesn’t mean you can learn anything from most of them. David Cay Johnston, the great NYT reporter and author (Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super-Rich and Cheat Everybody Else; Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense and Stick You With the Bill) who has done more to illuminate the flim-flammery at the heart of the US tax code and Wall Street’s post-Reagan machinations, offered this warning to journalists yesterday:

In covering the proposed $700 billion bailout of Wall Street don’t repeat the failed lapdog practices that so damaged our reputations in the rush to war in Iraq and the adoption of the Patriot Act. Don’t assume that Congress must act instantly, as so many news stories state as if it was an immutable fact. Don’t assume there is a case just because officials say there is.

The coverage of the Paulson plan focuses on the edges, on the details. The focus should be on the premise. And be skeptical of what gullible Congressional leaders, most of them up before the voters in a few weeks, say after being given a closed-door meeting on supposed horrors.

The Administration has scared the markets and some key legislative leaders, but it has not laid out a coherent, specific and compelling need for this enormous proposal, which is the equivalent of a one-time 55 percent income tax surcharge. (Instead the money will be borrowed, so ask from whom and how this much can be raised so quickly if the credit markets are nearly seized up with fear.)

Ask this question — are the credit markets really about to seize up?

If they are then lots of business owners should be eager to tell how their bank is calling their 90-day revolving loans, rejecting new loans and demanding more cash on deposit. I called businessmen I know yesterday and not one of them reported such problems. Indeed, Citibank offered yesterday to lend me tens of thousands of dollars on my signature at 2.99 percent, well below the nearly 5 percent inflation rate. That offer came after I said no last week to a 4.99 percent loan.

Here are links to some of the most prescient and on-point analyses of the past several days, starting with Treasury Secretary Henry Paulson’s no-strings-attached bailout plan.

THE PAULSON PLAN

Text of the Paulson proposal

Glenn Greenwald, “The complete (though ever-changing) elite consensus about the financial collapse” (9/20)

Glenn Greenwald, “Growing right-wing opposition to the Paulson plan” (9/22)

Glenn Greenwald, “Interview with Notre Dame finance professor Richard Sheehan” (9/23)

William Greider, “Paulson bailout plan a historic swindle” (9/19)

Michael Hudson, “The Paulson-Bernanke bank bailout: Will the cure be worse than the disease?” (9/22)

Sean-Paul Kelley, “Text of the bailout is authoritarianism at its worst” (9/20)

Paul Krugman, “No Deal” (9/20)

Paul Krugman, “Balance Sheet Baloney” (9/23)

Robert Reich, “The bailout to end all bailouts” (9/23)

THE DODD PLAN

Text of the Dodd plan (PDF)

Bloomberg News, “Dodd proposes giving US equity stake for bad debt” (9/22)

TalkLeft, “Follow the Lobbyists: They Strongly Oppose the Dodd Bill” (9/23)

THE PRESIDENTIAL CANDIDATES’ RESPONSES

NYT Caucus blog, “Obama Says Bailout Should Include 4 Conditions” (9/23)

WashPost Trail blog, “McCain Lays Out Bailout Principles” (9/23)

FOLLOW THE MONEY

Bill Allison/Sunlight Foundation, “Financial Bailout: Who’s minding the store?” (9/23)

Bill Allison/Sunlight Foundation, “Financial Bailout: Who does Dodd see at his fundraisers?” (9/23)

Bill Allison/Sunlight Foundation, “Financial Bailout: Who does Shelby see at his fundraisers?” (9/23)

Bill Allison/Sunlight Foundation, “Financial Bailout: Who does Bachus see at his fundraisers?” (9/24)