The Brookings Institution warns that a congressional rubber stamp giving Treasury Secretary Henry Paulson extraordinary powers could encourage "more excessive risk-taking by financial firms in the future and demands from other industries for similar treatment in the future that will be hard to resist and cheap in comparison."
Legislative ambiguity fuels executive power, says Brookings. Strong and ongoing oversight of how the secretary exercises his new authority should be written into the legislation. "Details of the program — which assets can be bought, how they will be valued — should be stipulated in the bill or accompanying report."
A couple things most Americans can agree on is that Wall Street executives will pay a price for the government bailout with limits on executive compensation that includes rescinding bonuses and curtailing severance packages. And if taxpayers are footing the bill for a bailout, there must be greater oversight to prevent a recurrence of such a catastrophe.
And while the government's response to this financial meltdown will pit conservative let-the-market-be philosophy against a more active and regulatory-laden response, it is crucial deliberations don't degenerate into politics as usual on Capitol Hill. This is everyone's fragile economy and too important to be risked with gamesmanship.