William Isaac, chairman of the Federal Deposit Insurance Corp. in the 1980s, says banks need confidence, not a bailout. "I don't see how the expenditure of $700 billion will give people any confidence in the economy. It's not going to happen," he says. Instead, he'd prefer tax incentives and investment credits or even tax cuts directly to consumers, which could boost spending, at least in the short term.
In fact, Isaac thinks the bill, if passed, could hurt the economy by undermining confidence. Says Isaac, "I think the dollar could decline and commodity prices could go up," as oil already has.