Ex-Bureaucrat Views the Paulson Bailout

Can't resist commenting on features of the Paulson/Bernanke plan (the text was in both the Post and Times today):

• they were too rushed to think of a snappy title for the legislation, preferably one that forms a snappy acronym. (Gretchen Morgenson uses "TARP"--troubled asset relief program.) That means things were really hectic.
  
• one problem they'll have is in normal times we have a million or two foreclosures a year (too lazy to check the rate, but the point is there's some level of foreclosures that's "normal".) So, do they just take over all securities regardless, knowing they're going to eat the normal stuff, or do they have some way to weed it out. (New bureaucratic programs usually have this sort of problem--it's like paying kids to study, do you stiff the kids who don't need the incentive?)
• the draft legislation makes it not reviewable in court (as has been noted by other bloggers)
• there's no exemption from the Administrative Procedure Act, though I guess the preceding bullet makes this unnecessary. But what it says is there's no legal requirement for transparency (not that Administrative Procedure Act provisions provide that much transparency).
  
• Paulson apparently plans to use Treasury Department to run the program, rather than establishing a special corporation/agency. Might be wise, because it avoids a bit of administrative overhead. But regardless, I hope his administrative people right now are working on outfitting offices, etc. One of the biggest obstacles to doing things quickly in government is the housekeeping functions (where do people work, on what, and how do they get paid).

Read the Morgenson piece for more understanding.