The logic of the crisis seems to call for an intervention, not at step 4, but at step 2: the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to -- a share in ownership, so that all the gains if the rescue plan works don't go to the people who made the mess in the first place. That's what happened in the savings and loan crisis: the feds took over ownership of the bad banks, not just their bad assets. It's also what happened with Fannie and Freddie. (And by the way, that rescue has done what it was supposed to. Mortgage interest rates have come down sharply since the federal takeover.)But Mr. Paulson insists that he wants a "clean" plan. "Clean," in this context, means a taxpayer-financed bailout with no strings attached -- no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review "by any court of law or any administrative agency," and this adds up to an unacceptable proposal.
The logic of the crisis seems to call for an intervention, not at step 4, but at step 2: the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to -- a share in ownership, so that all the gains if the rescue plan works don't go to the people who made the mess in the first place.
That's what happened in the savings and loan crisis: the feds took over ownership of the bad banks, not just their bad assets. It's also what happened with Fannie and Freddie. (And by the way, that rescue has done what it was supposed to. Mortgage interest rates have come down sharply since the federal takeover.)
But Mr. Paulson insists that he wants a "clean" plan. "Clean," in this context, means a taxpayer-financed bailout with no strings attached -- no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review "by any court of law or any administrative agency," and this adds up to an unacceptable proposal.
We Gambled. You Pay. Jesus' General
Of course, there are some who think the wealthy do not deserve to take our piece of the American Dream: ...first thing on Monday morning, [everyone] needs to call their Representatives and Senators and say: No. Blank. Checks. For. Crooks. Be as polite as you can be and don't use bad words. Personally, this injunction may limit the duration of my calls to under a thirtieth of a second, or shorter. Congressional phone numbers. Update: Scarecrow has more: The most important condition to put on any bailout proposal is to impose a tax surcharge on the incomes of the wealthiest Americans to pay the bailout's cost. And just go read Avedon.
...first thing on Monday morning, [everyone] needs to call their Representatives and Senators and say: No. Blank. Checks. For. Crooks.
Be as polite as you can be and don't use bad words. Personally, this injunction may limit the duration of my calls to under a thirtieth of a second, or shorter.
Congressional phone numbers.
Update: Scarecrow has more: The most important condition to put on any bailout proposal is to impose a tax surcharge on the incomes of the wealthiest Americans to pay the bailout's cost. And just go read Avedon.
Frank Delaney ~ Ireland
The way I put it is this... Why is is okay to recapitalize a company by appealing to foreign "Sovereign Wealth", but in the case of domestic "Sovereign Wealth" it would be "Nationalisation" and therefore evil? A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
A Fine Mess - Op-Ed - NYTimes.com
... is the administration's proposal the right way to do this? It would enable the Treasury, without Congressionally approved guidelines as to pricing or procedure, to purchase hundreds of billions of dollars of financial assets, and hire private firms to manage and sell them, presumably at their discretion There are no provisions for -- or even promises of -- disclosure, accountability or transparency. Surely Congress can at least ask some hard questions about such an open-ended commitment. And I've been shocked by the number of (mostly conservative) experts I've spoken with who aren't at all confident that the Bush administration has even the basics right -- or who think that the plan, though it looks simple on paper, will prove to be a nightmare in practice. But will political leaders dare oppose it?
... is the administration's proposal the right way to do this? It would enable the Treasury, without Congressionally approved guidelines as to pricing or procedure, to purchase hundreds of billions of dollars of financial assets, and hire private firms to manage and sell them, presumably at their discretion There are no provisions for -- or even promises of -- disclosure, accountability or transparency. Surely Congress can at least ask some hard questions about such an open-ended commitment.
And I've been shocked by the number of (mostly conservative) experts I've spoken with who aren't at all confident that the Bush administration has even the basics right -- or who think that the plan, though it looks simple on paper, will prove to be a nightmare in practice.
But will political leaders dare oppose it?
