When I asked a Democratic house staffer recently where the $700 billion figure for the bailout came she mimed plucking it out of thin air. After today’s hearing, that question is still totally and completely unanswered. Many of the Senators, Chuck Schumer, Bob Corker and others floated the idea of disbursing a small percentage of the purchasing authority to be used in the next few months, and would then assess the program’s effectiveness in January.
Here was Paulson’s response to Corker’s suggestion to that effect:
PAULSON: Let me comment that under normal circumstances that would be a good way to go; these are extraordinary circumstances. We’ve been moving already to get ready to be in a situation where we can implement something after you all act. I believe, and the chairman believes, this is what we need here to deal with this market situation. They’ll be plenty of time to review what is done. You’ll have the opportuntiy to work with the new treasury secretary. We know how unusual it is to ask for this, but we asked for it because we think it’s to protect the taxpayer.
Translation: because we said so. Or: trust us. They’re going to have to do better than that. They have to give some account of where they got that number, at a minimum. Before a real conversation can even start.