Thursday, September 25, 2008

Making a bad deal marginally better

If we're truly going to move forward with a massive welfare program to assist Wall Street CEOs whose own reckless habits fueled the situation we're in now, then at least it's shaping up to feature some of the components that I'd like to see in place.

Of course, it still stinks big-time, and I doubt if anyone knows if it will actually do anything to address the economic turmoil we're facing, and Lord knows it doesn't exactly do anything to help out struggling homeowners or folks dealing with rising energy and food prices, but whatever, right? I mean, the president sounds panicked and John McCain had to suspend his campaign, so we have to take action, right?

If we're going to do something, it ought to take into consideration some of these factors, and I know it's odd that I gravitate toward a conservative solution to this problem, but this plan seems to have some good legs to it. Namely, that if we increase the ability for folks to save, that in turn will increase capital available for the banks to use. And it comes with a benefit to the investor.

Of course, I don't think this should be a long-term solution, but rather a short-term one designed to have somewhat of the same effect as the ill-conceived initial bailout plan.

Why couldn't a hybrid of both plans work?

Why not something like ...

- Inject $100 billion - with the appropriate oversight, accountability and equity stake for the taxpayer - rather than $750 (particularly since the Bush administration pulled $750 billion from out of thin air);

- For a period of one year, remove all taxes on IRA accounts and match every $10 invested in those accounts with $1;

- Require that Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year's other forms of compensation;

- Give bankruptcy judges the ability to adjust mortgages.


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