First of all, the framing of the bill as a "bailout" is one explanation for it's defeat yesterday. As was the arrogance inherent in the original three page bill, that was not even given the title of "draft proposal."
This diary is premised on the need for passing a bill to insert liquidity into the credit markets, with all of the caveats, potential adverse affects and moral hazards that have been written on extensively.
Here are my suggestions, recieved with agreement in comments on several diaries, with a suggestion for comments on them, and offering of others.
1- Paulson should never have given himself the authority to dispense funds. He defined the goal and means, and must allow Congress to select the individual, or small group, to execute it. The oversight committees in the final bill were to evaluate purchases after the fact, which is not acceptable.
2- Bush must set up a DOJ-FBI special task force to investigate, and if warranted prosecute those who broke the law, This would dissipate some of the anger against those whose irresponsibility brought this crisis about. Even if they are not convicted, they will know the fear of investigation of their action.
3-There should be retroactive limits on top executive compensation, not only in future contracts as was in the actual bill. The media did not characterize this correctly as being only for new employment contracts. While it will seem absurd to the average worker, given the astronomical salaries of those at the top of the financial Industry, moderation will still look like excess.
A simple rule, that no public company can take a risk where failure can result in a credit crisis like what we are experiencing would limit the revenues that in good times make such personal compensation possible
4-The most controversial condition on this site is this one. This "bailout" should not be used as a device to prevent foreclosures on those who are not able to pay for their outstanding mortgages. In the bill that was rejected, the term "bailout" was refuted by the provision that in the event that the securities purchased by the Treasury, when resold, fell short of what was paid, the financial companies would owe the difference to the treasure.
Only if the same terms are required for a non-performing mortgages of individuals will it not become a bailout for this group. A temporary suspension or a lowering of interest rates must be required to ultimately be paid, just as there is a requirement for the financial companies to makeup any "gift" from the taxpayers.
Such action will complete the cycle of free market economics, something that is inherently risky. The success of profiting from owning a home must be balanced by the risk of failure, which in this case is the loss of the home, but also includes the forgiveness of the balance of the debt.
That's my list, comment on them and share your own.