Monday, December 15, 2008


I'm pleased that The Washington Post is bringing this outrage to light, but this kind of news is still reported with absurd sentences like the one I've highlighted:

Congress wanted to guarantee that the $700 billion financial bailout would limit the eye-popping pay of Wall Street executives, so lawmakers included a mechanism for reviewing executive compensation and penalizing firms that break the rules.

But at the last minute, the Bush administration insisted on a one-sentence change to the provision, congressional aides said. The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the way the Treasury Department had said it planned to use the money.

Now, however, the small change looks more like a giant loophole, according to lawmakers and legal experts. In a reversal, the Bush administration has not used auctions for any of the $335 billion committed so far from the rescue package, nor does it plan to use them in the future. Lawmakers and legal experts say the change has effectively repealed the only enforcement mechanism in the law dealing with lavish pay for top executives.

The modification reflects how the rapidly shifting nature of the crisis and the government's response to it have led to unexpected results that are just now beginning to be understood....

Yeah, right -- this "result" may have been "unexpected" to the rest of us, but it was clearly "understood" by the Bushies when they added the provision to the law. Or do we believe that they insisted on it without full knowledge of how useful it would turn out to be, then just smacked their foreheads in astonishment at their good luck?

Recall that a few days after the bailout bill was signed into law, Paulson and Bernanke were aleeady hinting at a shift away from buying toxic assets (what a Time blogger called the "TARP-and-switch"); the plan was then abandoned five weeks later with no work ever begun on an auction system.

Mistakes were made; stuff happens; unexpected results are just now beginning to be understood. The passive voice routinely conceals culprits.

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