Monday, September 22, 2008

Don't be fooled:

In the news:
The administration agreed to allow tougher oversight over the cleanup and provide fresh assistance to homeowners facing foreclosure, two Democratic priorities. In addition, negotiators neared agreement on allowing the government to take equity stakes in companies that participate in the rescue, a measure Treasury had wanted to avoid.

But differences remain on two big items: possible limits on executive compensation at firms taking advantage of the bailout; and changes to bankruptcy law that would let judges adjust the terms of mortgages.
Limits on executive compensation is a distraction. In no way does it offset the hundreds of billions that will be wasted paying for junk paper. This is an example of dangling a popular "feel good" item in front of people in order to obscure the real issue: increasing the debt to bail out Wall Street.

The White House (and Paulson) are balking at the executive compensation provision in order to make it appear more meaningful than it actually is. If the Democrats fall for this gambit, then they are idiots.


I agree. I'm getting tired of Democrats -- and even worse John McCain -- talking about executive compensation as though it's a material part of the problem.

Just tax it at a high rate and make sure there are estate taxes to recover the more outlandish robber baron wealth.

I also am pretty tired of the "greed" excuse, too. Greed isn't the issue. Robbers may be greedy, but it's the robbery that's the problem, not the greed.

OTOH, so many of these abstruse instruments and derivatives seem to have little connection to any intrinsic property of the underlying thing they are derived from. Getting the money back from those transactions would seem to be a good start.

And as I believe you have suggested, have a (temporary?) Bank of the United States to put, among other things, money from those transactions to squeeze some money out of this debacle so it's not generic taxpayers who are footing all the bill for this.

By Blogger riffle, at 9/22/2008 7:10 PM  

I agree with riffle, especially about greed. Capitalism operates on the assumption that everyone is greedy and will act out of self-interest. We regulate the system to prevent it from imploding. If it implodes, that's the fault of the regulations.

By Blogger benzado, at 9/23/2008 1:59 AM  

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