Troubled Senate bailout plan: What’s a troubled asset?

by Kurt Schulzke on October 1, 2008

109 pages were not enough to drown dissent in the U.S. House, but maybe an entire ream will be. The latest Senate bank bailout bill fills 451 pages. Despite its length, it features stunning gaps in logic. What else should we expect from roughly 350 pages of legalese written between Sunday and Wednesday afternoon?

Example: The entire bill is aimed at empowering the Secretary of the Treasury to buy “troubled assets,” defined in the excerpt reproduced below. Included among these poor creatures are things they call “other financial instruments” which the drafters forgot to define. Maybe it was intentional? Observe:

Apparently, we’re all supposed to know what they’re talking about. Result? The Senate is poised to authorize the Secretary of the Treasury to buy on the behalf the American people — at his unfettered discretion — an undefined category of assets.

Isn’t this what got AIG into trouble in the first place? We can do better, can’t we?