Readers must assume that the Post has a bug in the White House since it has a front page article relating portions of conversations between President Bush and Treasury Secretary Paulson that has no sources. If the Post didn't learn about the conversation from a specific source, then it must have had direct access to the conversation, right? Alternatively, the Post actually did have someone who was a party to the conversation relate the conversation to its reporters. But that can't be possible. Serious newspapers wouldn't just present someone assertions about a conversation as truth. Everyone, especially politicians, can be expected to have their own particular angle to a set of events. That is why reporters always distinguish between items they know directly and information they get from a source. If the Post actually got its information from a source we might be inclined to question whether Henry Paulson really told President Bush that "there is no Plan B" when it came to the bailout package. Since this is so obviously not true, it is difficult to believe that the Treasury Secretary actually made this assertion to President Bush. Presumably the Treasury Secretary knew that it was possible to restructure his plan (it had few details, so they clearly had not spent much time crafting it) to focus on directly injecting capital into banks, as was recently advocated by George Soros in the Financial Times. This is also the path advocated by almost every economist in the country who has spoken on the issue. It also would have been possible to make more extensive compromises with Democrats with the existing plan, for example a more specific commitment to get equity in exchange for losses on assets, along the lines laid out by Senator Dodd in his proposal the prior week. The White House also could have given ground on the bankruptcy provision for home mortgages, reversing a special interest clause for the banking industry. This refusal to compromise is inconsistent with the behavior of people with "no Plan B." The article also highlights the plunge in the stock market on Monday. Serious reporters know that daily movements in the stock market are driven by mass psychology (what event cased the 1987 crash?) and have almost nothing to do with the underlying strength of the economy. No one would advocate using daily stock market movements as a basis for public policy. As was the case with its coverage of the Iraq War, the Post abandoned normal journalistic standards in its coverage of the bailout.
--Dean Baker