Start slow with the proposed bailout ---- for example, with just $100 billion, subject to review. The Treasury buys up bad debt with that money, and after seeing how that works, they can come up with a valuation model and criteria. "Then, the next amount to be authorized would at least have some intelligence behind it."
"Follow Warren Buffet's lead."If a bank needs additional capital, let the Treasury buy permanent preferred stock, just like Buffet, which would provide an opportunity for taxpayers to make a lot of money out of the deal, just like Buffet, and probably for a lot less cost than $750 billion. (Somewhat like Alaskans getting a regular oil profit check?)
Just give the $2,300 stimulus per capita to the citizens as an economic stimulus
A comment from another reader added to the last suggestion that it be combined with freezing foreclosures and new housing permits, but I am not sure that would add to the stimulus idea per se.
In any case, as Jim Pappin says,
In nearly 8 years, this administration has done almost nothing right. It's a mystery to me why, in their dying days, someone would turn over the wealth of our nation to them with no review, no controls, no governance, and no accountability.
Then, there is the alternative of doing very little, even nothing at all. This financial panic will, like financial panics in the past, burn itself out. Sure, it will hurt, and hurt badly, and other people and countries will suffer from the excesses of the free market philosophy applied in the real world. Maybe then we will be done with this foolish theory and move on to a more realistic philosophy, just as equally unrealistic Communism burned itself out. That might in the long run be better than turning our future over to tainted hands, hands which are, frankly, seeing this mess as an opportunity to create an authoritarian executive and impose even worse de-regulation and greed on us, changing not only our life style but our Constitution forever.
Go to http://open.salon.com/content....
I am pretty enraged by this whole deal. It really sucks. Our elites need to be all uprooted and thrown out of office for allowing this debacle to be appended to the list of the last eight years' worth of insults to our people and republic.
The Democratic Party shoots itself in the foot with this bill, and just reinforces the idea that there are two parties for the moneyed, and zero for the rest.
I wish I could grab Chris Dodd (whom I generally like and admire) and tell him, "Senator! Take a breath! Talk to Galbraith and the folks that have been predicting these crises for years. Ask yourself how this bailout exactly is supposed to solve the underlying issue of a collapsing real estate bubble. And if it doesn't, are we just throwing good money to the financial elites that brought this mess upon us?"
It's very sad that, to this day, Pelosi and Hoyer can't seem to hear the people on these types of issues. Why they would trust anything Bush has to say at this point is beyond me, it suggests a sickness on their parts.
Do you know that corporations that don't hold the highest credit rating have trouble selling or cannot sell commercial paper? Commercial Paper is what corps use to fund their regular operations. Your receipts from customers rarely perfectly match the timing of your payment to vendors or employees. You need financing to bridge that gap. If you can't issue commercial paper, you have to rely on a revolver. And if rising costs (especially energy) mean your existing credit facilities can't cover you, then you are SOL because your bank doesn't want to give you money.
We'll see what Pelosi puts on the floor. But goodness gracious these people are under a lot of stress, cut them some slack.
The whole problem, however, is that her idea of doing the right thing consists of mostly listening to the financial, economic, and political elites that are mostly responsible for this mess, and taking their arguments as good faith.
That has been the story of this Congress, and of the Democratic way of "fighting" the past eight years. They are insulated from the common sense wisdom and skepticism of the general populace, instead choosing to always listen to the "Serious" commenters and blowhards and establishment thinkers. It's crazy-making. It's how we got into Iraq, it's how we ended up shredding the 4th Amendment, and it's how we'll end up forking over $700 billion (or whatever) into a potential sinkhole, without ever truly debating the consequences of this action or even preferable alternatives. It's happened every time for almost every major decision.
I'll say again, this is the freaking government of the United States. If absolutely no commercial paper, especially credit-worthy paper, is moving because of this mess, then let the Fed act as a broker. There are ways to ensure that the credit-worthy can get the requisite liquidity to survive this mess. But we have a constant failure of imagination in this damned Congress (notice the 17% approval rating, or whatever in the hell it is), and they are working with bad faith actors. This is a huge, momentous decision.
Our government is dysfunctional and in the hands of poor stewards -- and that's the most polite way I can muster of saying some things that really deserve much harder sentiments. The second Pelosi, et al, for once prove me wrong, I'll cut 'em some slack. $700 freaking billion dollars?!?
Your second suggestion sounds the best to me. Start slow, give us a small bridge to a new administration. Then work on something comprehensive to address the systemic risk that occurred.