My last (which was also my first) diary was a poorly-titled, mildly outraged rant about the bailout. I meekly capitulated to the inevitability of it all, and just tried to suggest a couple of fixes. I still think we demand the resignations of every CEO, CFO and director of any company that wants to dip into Hank Paulson's money pot.
Now I'm thinking bigger.
This bailout really stinks. It reeks of the typical Bush screwjob, with secrecy, fake urgency and a huge transfer of cash with no oversight. I work in the industry--I knew what a collateralized debt obligation was before the damn things threatened to leave us all selling pencils. But I have no good idea why we have to do this, what exactly the threat is, who stands to lose the most and how much this should reasonably cost.
We need to learn precisely what the bogeyman is. If we fail to cave to Paulson, what will happen? We know the capital markets are stuck, credit is not just tight--it isn't moving. So money to borrow for capital investment, cars, houses and Christmas presents is hard to find at any price. But what does that do to us, and for how long? And does the bailout solve that problem? Sure, a tight credit market slows the economy, but diverting $700 billion to buy paper that no one else wants to buy will certainly hurt the economy and hamstring the federal deficit at the same time.
Isn't it just a wee bit suspicious that Republicans are proposing this scheme just as Democrats are about to take over two branches of government? What better way to make sure that there is no money left to invest in clean energy, affordable healthcare and deficit reduction?
And the money will be used to prop up the scumbag companies that screwed the pooch in the first place!
We have to feed this shit sandwich to the people who made it. Every company that wants to sell its securities to Hank Paulson has to fire its CEO, CFO and board of directors. It also must agree to a surtax on its income for a few years. This makes sure only those companies in serious trouble get the benefit of the deal.
The bailout can be as big as Paulson wants, with the caveat that it is paid for by the firms and people taking advantage of it. The income surtax on the companies that take advantage of the bailout probably won't be enough, so we can also tap the top 1% of individual earners. We'll probably have to slap a surtax on dividends and capital gains, too. Those taxes are a drain on the economy but so is crushing the middle class with unending deficits. The middle class didn't cause this mess and the middle class won't be getting the direct benefits of the bailout. So let's charge this to the ones who caused it.