What a weekend it was for the watchdog, and the rest of the country, as we literally watched history unfold from our respective perches. So much history, that it made it kind of hard to keep score, but we’re going to call it 2-for-3 for the watchdog this weekend.
On CBS’s Face the Nation, Rep. Barney Frank held forth admirably on what ought to be included in the massive bailout propose by Treasury Secretary Henry Paulson, but when host Bob Schieffer asked the question we hoped he would, it was actually Republican Senator Richard Shelby who answered.
SCHIEFFER: Senator Shelby, once we get past this, or while this is in progress, are we going to
have to have an overhaul of the rules and regulations governing all this?
Sen. SHELBY: Absolutely, Bob. I’m going to go back to this briefly. What caused this?
What’s the root cause of all this, where we are today? Greed and lack of regulatory oversight.
Let’s be honest, the Federal Reserve and the other institutions overlooking our financial system,
they didn’t know what was going on in these institutions. If they did, we wouldn’t be where we
were today. And I remember about a year ago the Fed chairman, with all due respect to
Chairman Bernanke, he said basically we had this contained. I fear that this is not contained and
we will repeat it again if we don’t have massive, tough regulatory reform in the next Congress.
SCHIEFFER: All right. Well, gentlemen, I want to thank you very much for…
Rep. FRANK: Can I just say amen to that?
SCHIEFFER: Yes, and we have 20 seconds here.
Rep. FRANK: All right. Let me just say–being Jewish I don’t ordinarily do this on a Sunday
morning, but I just want to say an amen to Senator Shelby.
Of course it would have been even better if someone had pointed out who made sure that credit swaps would be unregulated, ensuring the the government wouldn’t know and couldn’t know what was going on in the firms we’re now bailing out.
On NBC’s Meet the Press, New York Mayor Michael Bloomberg also talked regulations, and included infrastructure on a list of items in what he thought should parallel track in the all-but-inevitable bailout.
But the man of the Hour was Treasury Secretary Henry Paulson, who put in appearances on every Sunday morning show we watched, talking about the importance of his proposed $700 billion bailout plan. Surprisingly, Chris Wallace of Fox News Sunday asked a question similar to the one we suggested.
WALLACE: I want to get back to the question of protecting the taxpayer. Since we’re bailing out these banks and investment firms, do you limit executive salaries?
And do taxpayers — because after you take the bad debt off, these firms are going to become big again and make millions of dollars. Will taxpayers get a piece of the action, get a piece of equity, in firms as they start to make money?
Paulson’s answer, though, was basically along the lines of "give me $700 billion with no accountability and no conditions attached, and we’ll talk later about the rest."
WALLACE: But the answer is no, you’re not going to be eliminating executive salaries.
PAULSON: But the — I want to say it this way, because if we design it so it’s punitive and so institutions aren’t going to participate, this won’t work the way we need it to work.
Let’s talk about executive salaries. There have been excesses there. I agree with the American people. Pay should be for performance, not for failure. We’ve got work to do in that regard. We need to do that work.
But we need this system to work, and so we — the reforms need to come afterwards. And my whole objective with the plan we have is to give us the maximum ability to make it work.
The rest, of course, being foreclosure relief, and accountability for the firms that will be lining up for a cut of that $700 billion.