Key­ing off an opin­ion piece by Paul Krug­man, Eric Rauch­way, an Amer­i­can his­to­ri­an (and also an old grad school col­league of mine), offers an intrigu­ing analy­sis of the Bush/Paulson bailout and how it com­pares to the Hoover and FDR bailouts from the Depres­sion era. The dif­fer­ence between 1932/33 and 2008? In 2008 (get text of leaked plan here), Con­gress will have no over­sight and the exec­u­tive branch will be “behold­en to nobody and sub­ject to no review.” (Sound vague­ly famil­iar?) There will also be no stat­ed restric­tions on how much a giv­en cor­po­ra­tion can be assist­ed, and no require­ment that cor­po­ra­tions give the gov­ern­ment any­thing back in turn. (There’s not even a require­ment that the gov­ern­ment buy the bad debt for fair mar­ket val­ue.) Back in the 30s, how­ev­er,  “All loans had to be secured, couldn’t be made on for­eign secu­ri­ties or accep­tances, no more than 5% of the mon­ey could go to any one com­pa­ny, couldn’t exceed three years’ term, couldn’t pay fees or com­mis­sion to appli­cants for loans, and so forth. Rail­roads accept­ing such loans had to do so under terms accept­able to the reg­u­la­to­ry Inter­state Com­merce Com­mis­sion.”

The idea of hand­ing the Bush admin­is­tra­tion anoth­er blank check is hard­ly a hap­py one. We’ve been down that road before and things did­n’t exact­ly go smooth­ly.  But then again I’m not sure that the 1930s offers won­der­ful mod­els for cat­a­stro­phe man­age­ment (not that Rauch­way is say­ing that). Let’s hope that our lead­ers take a lit­tle time to think things through.

And, by the way, New Rule: No one on Wall Street should be allowed to make more than six fig­ures until they’ve cleaned up their mess and reim­bursed the tax­pay­ers. Yes, wish­ful think­ing I know, since appar­ent­ly Lehman, even hav­ing gone bank­rupt, has found a way to a share a $2.5 bil­lion bonus pool.