Today, Congress approved the $700 billion Wall Street Bailout Bill. Under the Bill, hundreds of billions of dollars will be used to buy toxic assets currently in safes in London, Shanghai, and Riyadh, Saudi Arabia. Bailed out Wall Street firms will use their bail out money to pay million dollars a month salaries, and to even increase them to two million dollars a month. (For details, see paper at BradSherman.house.gov.)

Our economy will not do well in the months to come, and dropping $700 billion on Wall Street is not going to make things much better. But now Wall Street will use the same fear mongering tactics which were used to pass the Bill, in order to justify the bill.

In order to pass the Bill, Wall Street declared that unless they received $700 billion in unmarked bills, the Dow would drop by 4,000 points and blood would flow in the streets. The passage of the Bill will have little positive economic effect, and the fall and winter will be bad times for our economy. But in the coming weeks, Wall Street will justify the Bill by saying that we averted those very same calamities they had predicted during their successful effort to create panic, and pass the Bill.

The worst abuses of the Bill can be minimized if Congress, and especially the press, begins an unprecedented level of ferocious oversight:

We have to make sure that Paulson spends the money and the orderly rate of less than $50 billion month (as he has promised), not at a frantic pace that spends it all by January 20th, 2009.

We have to make sure that Paulson treats all financial entities fairly, whether they be firms he likes, or firms he doesn’t like. (It will take incredible investigative journalism to see whether the executives of any bailed-out firms are making secret contributions to Section 527 organizations, which are responsible for a big chunk of today’s political advertising).

When a firm receives a billion dollars in bail-out cash, we must report on which of its executives are receiving that cash in the form of salaries in excess of $1 million a year. (The bill allows unlimited salaries to be paid by bailed-out firms, and does not contain a provision preventing the bail-out cash from being used to pay those salaries.)

Each time a U.S.-headquartered entity sells billions of toxic assets to the Treasury, we must ask whether that U.S. entity is just acting as an intermediary. We must ask whether those toxic assets were in foreign safes on September 20th, 2008. We must be aware of the China two-step (described in a paper at BradSherman.house.gov), in which a foreign investor who made bad business decisions can sell toxic assets to a U.S. entity on Monday, and Paulson can buy those toxic assets with taxpayer dollars on Tuesday.

No one will ever be able to prove that the Bailout Bill helped or hurt our economy during the coming fall and winter. Only two things are certain: the bill will provide hundreds of billions of dollars to investors who made bad decisions and Wall Street executives; and our children and grandchildren will now face a national debt that is hundreds of billions of dollars higher.