Back to Dean Baker (you knew it was coming):
Remember way back to last week when it was going to be the end of the world if Congress didn’t pass the bailout package? Remember the Washington Post’s account in which Treasury Secretary Henry Paulson told President Bush, “there is no Plan B.”
Well, it looks like the Fed has discovered a Plan B. It turns out that the Fed can buy commercial paper directly from non-financial corporations needing credit to maintain operations. This will keep the credit markets working even if the zombie banks aren’t up to the task. In other words, the threat of a complete meltdown in the absence of a bailout was nonsense and the media once again got taken for a ride by the Bush administration.
Of course, relying on the central bank to dish out credit to corporations is not ideal, but neither is it ideal to overpay for $700 billion of junk assets on the books of troubled banks.Too bad that the media didn’t spend more time focusing on the options available, instead of selling President Bush’s bailout package.
While we’re on the topic of the bailout, how about a little media follow-up on the issue of limiting executive compensation. After the bill passed, there have been several articles reporting the views of various experts that the limits on executive compensation were essentially meaningless.
This provides the potential for some great news stories. Did the members of Congress not know that their restrictions on executive compensation were meaningless or did they deliberately try to deceive the public? Real reporters would be asking this question.