I’ve started looking at the Bush Bail-out, and I’m not very happy. There are some very serious loopholes, and some very open-ended power-grabbing contained in these pages with no explanations.
For instance, the Treasury Secretary is authorized to purchase mortgage-related assets from financial institutions, at any price, with virtually no accountability. There’s not strict definition of how much he is allowed to spend for any particular asset, and why is only the Treasury Secretary given free reign to decide what an asset is worth, leaving the taxpayers to pick up the tab. I mean, what about, specifically saying the Sec. Treasury must pay a fair price for an asset? Is that so hard?
I guess that’s pretty much the biggest thing that bothers me, so far, about this bail-out, which is also bothering economists.
I hate to say this, but looking at the plan as leaked, I have to say no deal. Not unless Treasury explains, very clearly, why this is supposed to work, other than through having taxpayers pay premium prices for lousy assets.
As I posted earlier today, it seems all too likely that a “fair price” for mortgage-related assets will still leave much of the financial sector in trouble. And there’s nothing at all in the draft that says what happens next; although I do notice that there’s nothing in the plan requiring Treasury to pay a fair market price. So is the plan to pay premium prices to the most troubled institutions? Or is the hope that restoring liquidity will magically make the problem go away?
There is nothing in this plan to help the people that have been harmed the most by this financial crisis. There is nothing in this plan to stop the bleeding of companies by greedy CEO’s. Oh. My. God. You’d think the sky was falling, by dems suggesting that CEO compensation (which has been on a speeding, run-a-way train) gets capped!
Frank, who has been in phone discussions with Paulson, said the secretary appeared receptive to adding some foreclosure-relief language. The second Democratic proposal — to impose compensation limits on Wall Street executives — is meeting more resistance.
“Hank says it’s a poison pill,” Frank said. “I say I don’t think it’s very patriotic for someone to not give up his golden parachute when we’re trying to save the markets.”
Seriously, folks, when a company is in financial trouble, you CUT BACK on salaries — especially the HIGHEST salaries.
I’m sorry folks, but I do not want my tax dollars going to this major debt, not without the following:
- strict regulations being replaced on the financial sector;
- strict definitions of fair-price that the Secretary of Treasury must adhere to included in the plan;
- caps on CEO compensation;
- specific and meaningful help to the homeowners that have been devastated by corporate greed.
Without meaningful guidelines, this bailout is nothing more than a very huge white elephant.
[...] to vote against bonus structures.” True. But if we follow the sort of demands outlined at The Crone Speaks or by Richard Murphy in return for our support of the markets, we’d be demanding a seat on the [...]