Glenden BrownRobert Reich Conditions for the Bailout
From his blog:
1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.
2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year’s other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?
3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street’s outsized political power – especially when that power is being exercised to get favorable terms from taxpayers?
4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.
5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?
Wall Streeters may not like these conditions. Well, you should tell them that the public doesn’t like the idea of bailing out Wall Street. So if Wall Street doesn’t accept these conditions, it doesn’t get the blank check.
September 23rd, 2008 at 10:30 am
Welcome to Communism.
September 23rd, 2008 at 10:31 am
We must make more noise than ever before to prevent the pillaging of our gov’t coffers by this administration.
Paulson has few friends. The ones he does have are other Goldman Sachs criminals. Left to serve his greed and creed, Paulson will effectively give the money to his friends.
The three page bailout plan says very simply:
Do We Really Want To Abolish Congress? The Paulson Plan Will Do Just That!
September 23rd, 2008 at 10:35 am
Ken, That doesn’t sound to very contrite coming from a guy whose blind obedience to this administration includes unwavering support for deregulation.
September 23rd, 2008 at 10:37 am
I would add: Paulson, Bernanke and Cox all resign or no deal. They did next to nothing and failed to prevent this catastrophe– it was on their watch. As CEO of Goldman Sachs, Paulson led the way in creating these overvalued “illiquid assets” aka junk paper.
Also, Senator Bernie Sanders (I-VT) has a modest proposal: a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers, which would yield more than $300 billion in revenue.
Unfortunately, none of these ideas gets us past the essence of the proposed Bush Wall Street bailout. As Fed Chief Bernanke explains, taxpayers are expected to pay premium prices for worthless or near worthless securities. There is no upside.
Note to members of Congress: we don’t want a Bush Bailout. Rasmussen poll: only 25% of Americans support the plan.
September 23rd, 2008 at 10:37 am
Right O, Ken, but with this particular brand of communism we can say:
“Brought to You By the Republican Party: the Party of Morals and Deregulation”
September 23rd, 2008 at 10:46 am
Hi Richard,
I wonder if you (or Glen, or Leo) might write a post calling for these resignations.
I would but I am out all day.
We need to insist these guys be replaced with really trustworthy people of impeachable integrity and reputation.
They are all gone when Bush leaves office anyway since they have overseen (watched) this happen while saying and doing nothing.
September 23rd, 2008 at 11:22 am
Cliff– I assume you mean replace them with people of unimpeachable integrity.
I think the answer for the present is simple: Do nothing now. Next year, after the financial and stock markets have adjusted, the Obama administration can decide if any bailout is necessary to help the real economy.
If Congress gives Bush what he wants, it’s the Iraq AUMF all over again– with a comparable trillion-dollar-plus price tag! Naomi Klein is all over this, as you might expect. The bailout “is actually a stick up,” she writes.
David Kay Johnston, the former NYT reporter who won a Pulitzer for his reporting on tax policy, calls bullshit on the Bush bailout proposal:
September 23rd, 2008 at 11:53 am
I might be accepting of such a bail-out if we went beyond demanding and accepting the resignation of the corrupt players and, of course expanded the list to include the chief and his vice. By beyond resignation, I’d suggest criminal trials and incarceration if at all possible. Certainly, tapping their acquired booty.
‘Unimpeachable’ just didn’t read right.
September 23rd, 2008 at 2:43 pm
I added a great picture grabbed from Matt Yglesias. Let ‘em eat illiquid assets!