But before you read this diary, please read and recommend this response from Sen. Sanders of Vermont about the bailout. It is of vital importance that Sen. Sanders words be kept in public view today.
So, here is Prof. Krugman | DIGG:
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.
...
The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.
And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.
Please read the above article in full ...
I think that this is important.
If I am going to sign off on spending $700 billion or a trillion or two trillion so that Goldman Sachs can stay solvent, I want to know what is in it for the American citizen.
What do we get in return for this investment?
Sen. Sanders wants financial behemoths broken apart. He wants the system re-regulated. I suggested these two things in my diary entry yesterday.
But I also want accountability.
And I want those responsible to be punished.
And I don't think it's wrong to demand that any bailout bill includes the following:
A compensation cap for all employees, executives and directors of $100,000 a year, including stock and cash bonuses.
This should be required for any company that chooses to join the bailout plan.
'Cause I ain't financing multi-million dollar paydays for these crooks.
UPDATE: Professor Krugman just posted a follow-up | DIGG.