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Why the Plunge Protection Team needs scrutiny
By John Crudele
New York Post
Sunday, May 27, 2007
http://www.nypost.com/seven/05272007/business/shine_a_light_on_the_plung...
Dear John: Although I admire your quest to get information on the Plunge Protection Team, I'm not sure why you are doing so. Seems to me, if you consider it OK -- in the public interest, as you say -- for the PPT to intervene in some emergencies, then you essentially consider it OK to intervene at all times.
Because who determines what a real emergency is? Where do you draw the line? You either believe in a free market or you don't. I.G.
Dear I.G.: I've wrestled with this question, and I don't think I've come up with a perfect answer -- but perhaps a satisfactory one.
If outside forces are threatening our financial stability, then I think it's OK for the government to intervene in the markets. Thus I believe it was right for Washington to stabilize the stock market -- as I think it did -- after 9/11.
Or if some sort of financial terrorism was being waged against the United States, then that too would be adequate reason for a temporary response.
The Plunge Protection Team is really called the President's Working Group on Financial Markets and -- while it acts in secret -- I think it was chartered to come to Wall Street's rescue.
But I believe there is the real possibility that a group like this will be abused. You make a good point: Who gets to decide when there's an emergency? Is there one, for instance, if a stock market decline threatens an incumbent president's chances of staying in the White House?
That is why I believe the actions of the Working Group need to have a light shone on them.
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