Can One Man Stabilize Markets?

Tuesday wasn't a great day for last week's financial heroes Henry Paulson and Ben Bernanke. They were grilled all day by skeptical members of Congress about their $700 billion dollar bailout of the financial markets. It seems their stubborn desire to get a bill passed free of conditions like caps on CEO salaries, congressional oversight, and such hit a wall. Senate Banking Committee Chair Chris Dodd concluded, ominously, that major changes to the plan must be implemented to get it moved.

Paulson and Bernanke should have seen this coming. Their miscalculation was believing the average American saw some benefit to helping people who are perceived as conductors on the express train to American financial ruin. They can tell Congress it's all about the taxpayer, but taxpayers themselves aren't feeling it. Things are so bad Bush himself is thinking about giving a speech to the nation prior to floor debate in the House. Like the plan itself, there's no guarantee a few words from the Decider-in Chief will make things any clearer.

American taxpayers want sensible answers to basic questions. Why shouldn't the salaries of CEOs whose companies are being bailed out be limited? How much help will there be for distressed homeowners facing foreclosure? Where exactly is this $700 billion dollars going to come from? And, most importantly, what happens if the bailout doesn't work? Right now even the most savvy economists don't see a Plan B.

The stock market is apparently buoyed early Wednesday by the news that billionaire investor Warren Buffet will put $5 billion dollars into Goldman Sachs. This is supposed to renew investor confidence that the independent investment bank model still has a chance. Maybe, in the short term, it will. However, a knight in shining armor may not be enough to solve this thing in the long term. The Treasury Secretary and Fed Chair wanted what they call a quick and clean bailout bill passed this week.

Maybe not.