So they got the money (OK, not Ford) and LIFE AS WE KNEW IT was saved for another day (or several months at least.) Chrysler used some of that money to pay for a full page newspaper ad in many markets thanking the taxpayers for the bailout money. Talk about stimulus. All those millions of jobs were kept on, workers building cars and trucks at full speed, and facotry orders kept up at usual paces, all because of that generous tax payer funded infusion, right?

WRONG! Not only did that initial tax gift NOT fix the massive problems in the US auto industry, both companies who took the cash are now in BANKRUPTCY. As in FAIL. We’re into GM for upwards of $50 Billion now and lucky us, “we” own 60% of a worthless behomoth. Too big to fail? Apparently NOT.

So now, we’ll surely see even more massive layoffs, since 1 in 10 jobs in this country rely on a strong US auto industry, right? Isn’t that what they told us last fall? Not just auto workers, but parts plants, plastic mills, cloth manufacturers, and down the line?  If financial “armageddon” hasn’t hit us yet, it must be right around the corner, right???

Would we have been better served just giving that $50 Billion to the estimated 1.5 million affected workers to the tune of $32,000 and change and let the auto industry and related industrues just close up shop?

Too Big to fail? When failure is inevitable, as it surely was with GM and Chrysler, what possible good came from prolonging the inevitable and dishing out multiple billions of dollars? Is our economy the better for it? Are those workers?

News of GM going into bankruptcy have indeed begun a “sky is falling” mentality at that bastion of sanity called Wall Street- the market is UP 200+ points.

Who was president when this whole financial disaster really began? Who was making the rules so lax in Congress for the last decade or two? I guess it must all be Obama’s fault.

(cross posted at Bring It On)

After being told that our major financial institutions and banks were so nearly insolvent that only massive amounts of taxpayer funded infusions could save life as we knew it, we now have the major banks of the country boasting huge quarterly profits-in some cases, record profits.

Either Obama’s economic policies (built on the back of the Bush recovery plan) are as close to a miracle as it comes or something smells rather rotten. If you ask me, its time to put on a gas mask.

How is it that banks who were tens and hundreds of billions of dollars down the rathole such a short time ago can now be running profits? As far as I know, the federal government hasn’t actually taken over any (or at least many) of those toxic assets that start this ship a-sinking. And so far as I’ve been able to ascertain, home foreclosures haven’t come to a screeching halt, meaning those still-on-the-books toxic assets are still as deadly to the bottom line as ever before. With all that bad debt still remaining in the hands of the banks, and with the bail-out money spent gobbling up other troubles banks and funding “legal obligation” bonuses, just where are these record profits coming from?

Welcome to the ongoing world of inverse reality. If this is the beginning of a recovery then I’m the next American Idol.

Truth is truth, and hype is hype. These records profits are no harbinger of golden times around the corner. They are little more than the the same-old, same-old accounting tricks that made Enron a household name. Record profits? Sure, you’ve all jacked up your credit card interest rates and customer fees; you’ve all but stopped lending money to anyone without their own Fort Knox for collateral; but how does that erase the hundreds of billions of dollars of toxic debt you carry on the books? Face it friends…it doesn’t.

Recent changes in the mark to market accounting practices allow these banks to revert to the good old days of relaxed financial standards that made the Bush years such a boon for the shady and the immoral. Under the revised rules, banks can choose to value these bad debts any way they want to. They can pretend that the assets still retain the value they did when originated. To make it more clear, a mortgage held by the bank for $500,000 can still be considered as $500,000 in assets to the bank despite the fact that true market value today could be just half that amount. With such leeway, banks can pretend to be profitable all they want and still be buried under massive as-yet unrealized losses. And the federal government is playing right along.

They say that the key to a strong economy is consumer confidence. Perhaps they mean consumer stupidity. Becasue that “glimmer of hope” that was recently claimed to have been seen may well be little more than cheerleading. And sleight of hand.

Give the Obama administration for credit in trying to get things moving…they at least haven’t been paralyzed like Team Bush seemed to have been. And at least they are putting some restrictions on the money that goes out, instead of the blindfolded hand-out engineered by former Sec. Paulson. But allowing these banks to gloss over the reality of their financial solvency will likely prove to be a mistake, eventually eroding consumer confidence far longer and far more deeply when the piper comes calling again. Better to continue to face the music as we’ve been doing-bad news and all-than to falsely create a sense of improvement where none really exists. Reverting to the old way of faking it until it feels better isn’t exactly what I hoped for from the administration of CHANGE.

Listen, if these gilded reports allow people to keep working, then I guess that’s a good thing. But let’s not kid ourselves so readily. This isn’t the beginning of the recovery. It’s more like taking several steps back. Which means we’ll just have to relive it all again, and on top of the losses we already have and aren’t likely to get back soon enough.

Don’t be lulled. Keep your eye on the ball.

(cross posted at Bring It On!)

Led by legislative Demcrats, the budget includes what they are calling “$15 billion in permanent spending cuts, $12.8 billion in temporary tax increases and $11.4 billion in borrowing.”  But most of it is just legislative double-speak and it amounts to a travesty for Californians. The $15 billion in permanent spending cuts included several billion dollars worth of “automatic” spending increases that now won’t happen. But that’s not really a cut, since these “increases” don’t represent real dollars already spent. Not real program cuts at all, just keeping the automatic increases from happening this year.

The $12.8 billion in “temporary” tax hikes also are a farce, espepcially since taxes rarely get reversed. The deal between Democrats and Republicans calls for a ballot initiative to allow voters to institute a spending cap, but if voters do approve it, then the “temporary” taxes automatically last for 5 years. These taxes include increases in sales tax, car tax, and income tax.

Oh, let’s not forget too that they are still needing to borrow money to make up the budget shortfall. How does more borrowing fix anything? It doesn’t…it just passes the buck down the line for others to deal with.

I’ve grown used to the California Democratic party being a shill for the public employee unions who are more concerned with their own members and getting more and more money than the general public at large. But the California Republicans just ran on a “no new taxes” pledge to get elected in November, and with their capitulation are clearly stabbing their base in the back.

California legislators have a long history of overspending, buckling to state employee unions in boon times, and creating unnecessary government programs and policies to employ former legislators. A state garbage board meets regularly, pulls in 6-figure incomes for board members (who are political favor takers) and does little to make life better for Californians. This is but one example.

California’s prison system costs twice or three times what most other state systems spend, yet they are squallor filled breeding grounds of violence and sickness. The problem? The promised salary increases and exorbitant pensions given out to the union guards at the expense of real reform and proper care.

The list could go on and on and on, but the fact is that California is governed by idiots who care nothing for their constituents and everything for their political donors and benefactors.

It’s no surprise to see that the number of non-illegal citizens leaving California is greater than those coming in to the state. No more California dreamin’ for some time I think.

In the economic disaster that grips the nation and the world, most economists say that raising taxes is counter-productive to recovery efforts. In the power halls of California, raising taxes is the first priority to managing a mismanaged governmental budget.

That’s not leadership. Too bad so many Californians aren’t paying attention.

(cross posted at Bring It On)

-Lifelong politicians who “forget” to pay their taxes.

-Corporate CEO’s with their hands in the taxpayer vault gifting themselves with billions of dollars of bonuses and perks.

-Professional lobbyists paying off politicians in exchange for legal cover to commit fraud on the public.

These are but a few examples of how America is looted daily by those we expect to do the right thing. Millions of people are losing jobs and homes, while lawmakers find ways to shovel more money into the abyss in the name of stimulating the economy. Millions of children watch their future earning power disintegrate before their eyes, while America’s corporate stooges plan their next taxpayer-funded junket. It’s enough to make a person want to scream.

Money may be the root of all evil (or the love of money, as the saying goes), but I think our current worries go beyond biblical phraseology. What we are experiencing now is nothing less than a complete breakdown of social conscience and stewardship on the part of those who should not only know better, but are expected to do better. There no longer is shame associated with screwing old ladies out of their retirement funds. There is no moral judgment against those who enrich themselves with one hand in the public till while stabbing the public in the back with the other hand. Hell, for most of these unscrupulous bastards, there isn’t even a legal reckoning to fear. In the “effort” to right the ship of state, any consideration to public scrutiny of what went wrong and why it got that way is deemed not relevant to the “real” problem.

Forgive me if I beg to differ.

The economic crisis may well be the important issue at hand, but trying to solve it with the same people who created it doesn’t really seem to be the best idea to me. We may now have an administration bent on changing the way politics works in this country, but Team Obama has certainly stumbled on its way out of the chute. When “change” is the mantra of the day you not only have to say it, you have to mean it, live it, breathe it in every action along the way. To his credit, Obama has accepted responsibility for some bad selections of staff. But he’s also violated his own new lobbying rules by granting waivers to several who wouldn’t get jobs under the new rules. Bending the rules when they don’t suit you is the old way of doing politics. I think we expected a bit more.

The looting of America isn’t just the emptying of the treasury into the hands of private bankers, auto makers, and insurance corporations. The looting of America also reflects a vacuous morality that says, “Screw you-I’m only out for me.” We’re not only losing our hard-earned money, we’re losing the sense of common commitment that creates and sustains a nation.

If anything, the economic crash is just the last symptom in a body riddled with disease. We ignored the other symptoms for so long that eventually we began to think of them not as signs of poor national health at all, but instead as an evolution towards a better, stronger entity. Corruption that permeated all aspects of public life-from the boardrooms to the backrooms of Congress-was sold as virtuosity if it increased the profit margin. If you had to lie, steal, or bend the letter of the law farther than a world record holding limbo artist, so be it. After all, so long as the general public was wrapped up in petty debates of pretend morality (flag burning, gay marriage, nudity on TV and assisted suicide) the bigwigs could operate behind the scenes pretty much unfettered. At least until the house of cards finally collapsed.

The looting of America is almost complete. Our public finances are a disaster, and our personal finances aren’t in great shape either. Our national infrastructure has deteriorated while those entrusted to its care have fleeced the treasury. But worse is the fact that we accept these things as commonplace to such a degree that outrage is not only invisible, it’s often unthinkable. And when it does rear its head, there’s some “patriotic” idiot ready to slap it down in the name of “good Christian, American morals.” After all, if you admit that your country is failing and that your leadership is filled with greedbags, you have to take some responsibility yourself. And accountability is NOT the American way.

Barack Obama may be the right man at the right time to actually create some changes in this country. Sadly, for many, those changes will be too little or too late. Perhaps far greater than trying to repair a broken economic system is the task of repairing the broken sense of stewardship and morality that ultimately put us in this precarious position. In the end, no amount of political tinkering will withstand the onslaught of immoral actions by those at the helm. We need to not only clean house, but fire the cleaning crew as soon as they wipe up. But that’s not going to happen. Those who hold power have made sure that it won’t happen. And most Americans are too busy complaining about the “other” guy to recognize that it’s “their” guy who is part of the problem too. 

As I said, accountability is NOT the American way. Maybe collapse is. Maybe the only way to really root out the immoral leadership is to start from scratch. At this rate, we may get that chance sooner than later. The question is whether or not we’d even notice the opportunity.

(cross posted at Bring It On!)

For the record, I opposed the Bush Stimulus despite the money that it put into my pocket. Those $165 borrowed billions were bad economics based on faulty reasoning- that citizens would immediately put that money back into the economy. Instead, the majority either put that money in a savings account or handed it back to the banking sector via debt payoff. (Personally, I used that money to pay for summer day care for my daughter, so I guess I was trying to do my “part.”) I opposed borrowing more money that my daughter will be stuck paying off for what amounted to little more than a “feel good” gesture that in the end felt like a sucker punch.

Similarly, I opposed the Bush Bail-out on the grounds that feeding the insatiable maw of banker largesse was exactly the wrong approach to stave off the housing mortgage crisis and credit crunch. A look at the secrecy of the recipients, their proven wasteful use of the money, and a determined lack of willingness by the banks to part with that cash infusion has proven to be one of the biggest transfer of wealth boondoggles of all time. Had the Bush government really wanted to help the economy and the struggling housing market, that $350+ billion could have been doled out to 1.4 million homeowners to the tune of $250,000 each with the stipulation that the money HAD to be used to pay down a mortgage. The result would have been that the banks still ended up with the cash but that the housing mortgage crisis would have been significantly lessened and consumer confidence in their own resources would have been somewhat restored. Even as housing prices crashed, individual equity could have retained some value and consumers wouldn’t be tightening their purse strings like a sphincter in a snowstorm. But that, as they say, is water under the bridge. The Bush plan didn’t do that, and the Bail-out has utterly failed.

So my lack of support for the first two economic miracle cures has proven well founded. Not only did they do nothing to help the real economy, not only did they line the pockets of unscrupulous business tycoons, not only did they drain the treasury, but the tacked on hundreds of billions of dollars to the debt-strapped backs of yet to be born Americans.

Now comes the biggest plan of all, the Obama Stimulus plan, that promises to create jobs while rebuilding our national infrastructure. And again, I have to say I am reticent to offer my support. Don’t get me wrong…I support Obama in general and have been more pleased so far than not with what he’s been putting forth. And as a matter of fact, infrastructure investment in this country is well over due in many areas. The questions I have aren’t whether the money is going to be well spent or whether the spending will invigorate the overall economy- in fact Obama is promising to be as transparent as Saran Wrap so far as the spending goes-but rather returning our economy to “normal” is really all that wise in the first place.

Consider the fact that our consumer economy is predicated on people buying more and more things that they probably don’t need and that will purposefully be obsolete in a few short years. An economy based primarily on consumption necessarily feeds upon itself until there is little left to consume. Yet our form of capitalism needs people to spend more and save less or it does not work. If John and Jane Doe don’t buy the latest widget, people don’t have jobs making widgets. Fewer people working means fewer people buying and around and around it goes. At some point though, the benefits of this kind of economy are outweighed by the damage wrought. The results of a voracious consumer economy is a depletion of resources, an increase in pollution and waste, a reliance on cheaper goods from abroad to keep the spending going, which pushes businesses abroad to keep costs low, which reduces homeland jobs…the cycle continues until the wheels fall off the cart-like they are doing now. One has to ask themselves…is this the best we can do?

For many, the answer is clearly “Yes.” But in the current light, our entire economy seems to resemble one big Ponzi scheme. Good for those at the top, bad for those down the pyramid. And simply shoveling massive amounts of taxpayer money only promises to continue the current scheme in perpetuity. Basically, what our leaders are saying is that in order to fix the broken system, we have to continue doing the things that made it break down in the first place. And I wonder if rebuilding a house of cards and pretending that the foundation is now made of better, thicker, stronger cards is really any fix at all.

I’ve looked over the specifics of the Obama Stimulus and recognize that the infrastructure goals are admirable and in many cases absolutely necessary to propel our nation into a new era of cleaner technology, more reliable energy and transmission, and modernized transportation, medical, and educational facilities. I understand that once begun, many people will be put back to work rebuilding these elements of our infrastructure. But what isn’t being said and what isn’t being advocated is for a fundamental change in the way government, business, and regular people look and think about economic issues. We can spend all this money and rebuild all these things and get people working again…but unless we change our underlying habits and concepts of economy, we’ll ultimately end right back where we are now…deep in debt with little to show for it.

I know that the efforts of the Bush Administration were dead wrong, primarily because Bush and the GOP refused to provide oversight of policies and spending and just wanted to transfer the nations wealth into the hands of bastard financiers and business cronies. Kudos to them. They succeeded admirably in their efforts. They also left us in the worst financial shape in generations.

Now I see the Obama team trying to fix the problem in a different way. We’re still going to borrow and spend a ton of money, but instead of just handing it over, we’ll be getting something back in the process- better public infrastructure. So it’s a step up the ladder in that regard. But it doesn’t really change the dynamics of our consumer capitalism, or the way politicians look at tax dollars.

I don’t have the answers to our problems, but I do have questions. To be fair, Obama himself understands that this massive borrowing and unprecedented infrastructure plan won’t turn the corner on the economy right away. We still face months or years of downward economic news. But he’s trying to help-not by giving the money to a few fatcats with the caveat that they should help out if they want to-but by investing the money in our country. It’s a small difference to be sure, but maybe just big enough to do the trick. At least, we can all hope so.

(cross posted at Bring It On!)

A look at his financial accomplishments:

Airline Industry bail-out (2001) $19 Billion

Fannie Mae-Freddie Mac bail-out (2008) $200 Billion

Bear Stearns bail-out (2008) $30 Billion

AIG bail-out (2008) $85 Billion

Wall Street Comprehensive bail-out (2008) $700 Billion

Auto Industry bail-out (2008) $25 Billion (passed as part of the Wall Street comprehensive bail-out)

Fed Bank bail-out (2008) $99 Billion (additional $$ pledged AFTER the Treasury Dept. bail-out of Wall Street)

Military-Mercenary Industry Give-away (2001-2008) $713 billion

Tax Cuts for the Wealthy bail-out (2001-2008) $1.3 Trillion

GRAND TOTAL: $3.171 Trillion dollars

Interestingly enough, the federal deficit since Bush took office has risen almost $3.8 Trillion.

And the GOP is worried that the Democrats will engineer the largest transfer of wealth in this country’s history? Give me a break already.

(Cross posted at Bring It On)

HUH?!?

Okay- the banks hold the mortgages. Right now, the banks are on the hook for any of the mortgages that go into default. The numbers I’ve been hearing put the “toxic” mortgage numbers at around 10%. So that means that as of now, about 90% of the mortgages are being paid on time, in full. But in order to cover their exposure on that 10% of bad paper, the banks and financiers took ALL the mortgages, GOOD OR BAD, and bundled them together into trading instruments. So now, the bad loans are comingled with all the good loans into these exotic investments. Each little investment instrument has some good and some bad in it-balancing the portfolio to cover the risk. So far, so good-at least as far as comprehension goes.

Now the government is saying that we need to use up the taxpayer’s money to buy ALL these exotic investment vehicles so the banks can clear their books and get back to business. The government will purchase ALL these investments for pennies on the dollar- say 30 cents or 50 cents. Suddenly, the taxpayer now owns ALL the debt, can absorb the “toxic” loans, and eventually sell the “good” loans at closer to their dollar for dollar value- WHEN THE ECONOMY COMES BACK. This is a NO LOSE deal for the taxpayer in the long term, so the story is going.

But hold up there pardner…if these assets are being sold at fire sale prices, AND if these assets mostly hold good value, WHY AREN’T THE BIG MONEY PLAYERS WITH PLENTY OF CAPITAL RUSHING IN TO GRAB THESE PRODUCTS UP? If the buy-out is such a good deal for taxpayer money, it should be an even better deal for financiers and investors who always grab a cheap deal when they can. Where are these folks? I’ve heard time and again that in the long run, the taxpayers MIGHT EVEN MAKE MONEY on this bailout. If so, every Warren Buffet with a billion dollar portfolio should be chomping at the bit to get a piece of this tasty pie.

Bu they aren’t jumping, are they? And that leads me to believe that something isn’t being pitched to us as accurately as it should be.

For instance…many of the mortgages are for a value higher than the property is now worth. Just because a person is on time and not in default today is no guarantee that they will be able to stay in that position. If I hold a mortgage for $500,000 but my house is now worth only $250,000 all is well so long as I keep paying the monthly bill. My mortgage is one of the “good” ones in the piles on bundled mortgages. But suppose I lose my job- now my mortgage heads over to “toxic” territory and the real value is much lower than it was on paper. That “profit” margin being touted that the taxpayers might recoup is suddenly not worth as much as when the government bought it, and the return on it isn’t going to “profit” the taxpayers much, if any, after all. It could take decades for property values to return to their historic highs (if they ever do…if they ever SHOULD).

Suddenly, the rationale that the taxpayers will benefit down the road don’t seem so sound. It sounds more like something a financier thought up to make a big profit. Oh wait…this scheme’s master planner IS a financier- former Goldman Sachs CEO Hank Paulson. And the profit to be made in this deal isn’t for the taxpayers, but for all the big banks and financial institutions when they unload their bad bets on a public that is still being lied to. They profit by not losing as much as they should.

Some polling shows that when taxpayers are told that this bailout will probably end up being profitable to the taxpayers, people are supporting the deal by a 2-1 margin. (Sorry, I can’t find the link. But this is a number I’ve recently heard in a couple of places.) 

Just like a new car loses value the minute it goes off the lot, these mortgages-GOOD OR BAD- are losing value daily-money that won’t return just because the taxpayer picks up the tab. So this fiction that the taxpayer will ultimately profit from a bailout is likely just that- fiction.

Or am I just not seeing this rationale in the proper, creatively colored light that I am supposed to be seeing it?

(cross posted at Bring It On!)

Talk about the pot calling the kettle black. In the midst of “the most serious financial crisis” since the Great Depression, lawmakers apparently think the U.S. government is flush enough to keep on doing business as usual AND give up over $1 TRILLION dollars of taxpayer money to the greedy bastards in the financial industry.

WHO THE HELL KEEPS VOTING FOR THESE ASSHATS?!?!?

Examples of the pork projects (and these are put forth EQUALLY by BOTH PARTIES) include:

Rep. Pelosi (D-CA) obtained $1,500,000 for the Presidio Heritage Center.

Sen. Stevens (R-AK) obtained $2 million for Hibernation Genomics, a project at University of Alaska – Fairbanks that is investigating using hibernation as technique to preventing and treating trauma from injury and ischemia for battlefield conditions.  WAY TO GO MR. BRIDGE TO NOWHERE. EVEN UNDER INDICTMENT, YOU STILL KNOW HOW TO DELIVER THE PORK!

Rep. John Murtha (D-PA) obtained $24.5 million for the National Drug Intelligence Center which has been criticized as redundant of existing facilities and for mismanagement. In previous year, the Administration has attempted to shut down NDIC and merge it with existing facilities. GREAT! MORE FUNDING FOR PROJECTS THAT DON’T WORK OR ARE (gasp) BADLY MANAGED. KIND OF LIKE WALL STREET, NO?

Sen. Bond (R-MO) obtained $800,000 Pseudofoliculitis Barbae (PFB) Topical Treatment – this goes to ISW Group in St. Louis, MO, a privately held pharmaceutical company. FUNDING FOR SHAVING BUMPS?

Sen. Shelby (R-AL) and Rep. Aderholt obtained $1.6 million for SAIC’s High Fidelity Virtual Simulation and Analysis program which uses simulation software to reduce the amount of time it takes a soldier to receive operational support in the field. CAN WE PAY FOR THIS ONE WITH VIRTUAL MONEY THEN?

Sen. Levin (D-MI) obtained $1.6 million for Low Temperature Vehicle Performance Research at Wayne State University, double what the program received in FY08. RIGHT…BECAUSE WE ALL NEED TO KNOW HOW WELL CARS PERFORM IN -20 DEGREE TEMPERATURES.

And they wonder why the average American isn’t supporting the Wall Street Bailout.

What ever happened to that much touted reform that Democrats promised us? Oh, yeah. They are a bunch of liars too.

(cross posted at Bring It On!)

Here it is for your enjoyment.

Passage of the bailout measures would create huge new federal powers, even as they offer no sure success.

(from Yahoo News)

• Buying Power: Allows Treasury to buy up to $700 billion of privately held assets in the market. The original proposal called for buying power to be limited to “mortgage-related” assets, but a later draft expanded that to allow the government to purchase any “troubled assets.” There’s a staggering difference in authority between the two phrases, and it is a moving target as of press time. The banking industry generally favors the second version, but that potentially exposes taxpayers to much higher costs.

MY ANALYSIS: Of course the banking industry wants to include bad credit card debt- only helps them out. But should all of us taxpayers be on the hook for people who wanted the latest video game console to go with their big screen HDTV? I don’t think so….

• Managing Power: Under the Bush administration’s plan, Treasury would hire private managers to handle the hundreds of billions of dollars’ worth of assets it will soon own. But Treasury was silent on whether those managers would be able to actually negotiate directly with homeowners who hold the troubled mortgages. Democrats would go further and demand that bankruptcy judges be given the ability to renegotiate those failing mortgages on behalf of homeowners. This will be one of the more contentious sideshow fights of the negotiations.

MY ANALYSIS: Who are these “private” managers? Who has oversight of them? Since Paulson only very recently headed Goldman Sachs, are we just going to get the same folks who helped engineer this whole fiasco running our public money next? Is he going to tap his former pals in private industry? And since Paulson may well be on the way out, would his appointments be permanent or changeable by the new administration? Plus, the Bushites don’t want to help homoeowners at all. They stridently want to exclude the provision for bankruptcy judges to renegotiate mortgages and help people keep their homes. Soem devotion to the “ownership society, eh?

• Global Power: Under one version of Treasury’s proposal, the government would have the power to buy assets from any institution in the world that it deemed worthy of a bailout.

MY ANALYSIS: WHAT THE FUCK??? Now they want the US taxpayer to be on the hook for ANY failed private institution ANYWHERE IN THE WORLD??? This is a non-starter as far as I am concerned. Oh, a a stupid freaking idea too.

• Pay Power: Democrats on Capitol Hill say they want the final plan to include restrictions on payouts to the executives of the financial institutions that take the taxpayer lifeline. Paulson says he doesn’t like this idea, but it may be tough for elected officials to oppose this populist carve-out in an election year.

MY ANALYSIS: Great idea, and no surprise Paulson doesn’t like it. He’s less than two years out of those CEO chairs and can’t imagine his buddies not making their bazillion dollar bonuses for screwing up the whole country’s financial system.

• Equity Power: Democrats would like the government to get shares in the financial institutions that take federal help — effectively giving taxpayers ownership stakes in the nation’s largest banks and providing them with a huge windfall if those institutions prosper in future years.

MY ANALYSIS: Another rational idea. After all, if the taxpayer is going to bail these bastards out, we should get to reap any potential benefits down the road, NOT THEM. Of course, they say that the taxpayer could benefit but really they just mean that lawmakers will get money back in the treasury to waste on some other boondoggle eventually-earmarks that do not benefit the public as a whole. Typical political double-speak.

• Oversight Power: Treasury’s initial proposal included very little room for congressional oversight of the new effort, calling for reports to be sent to the Hill just twice per year. That isn’t flying with Democrats or many Republicans on the Hill; if a bill makes it through Congress, it will almost certainly have much stronger oversight provisions.

MY ANALYSIS: Another demand from this administration for “emergency” legislation rushed through and based on faulty analysis-it’s their key to all their policy “successes.” No oversight sure worked well in Iraq, in the military medical process, in the Katrina contracts, and on and on and on. If anything is to have a reasonable opportunity for taxpayer support it must include strict oversight.

In short, I’m not keen on a massive bailout, but what is the alternative? Massive economic depression? We may yet still get hit with that anyhow, since there is no guarantee that the government bailout will be big enough or strong enough in the long term. There are literally trillions of dollars of bad paper debt waiting to be unearthed when this complicated financial rubicon is deciphered. We may well find ourselves giving away trillions of dollars and be left in the same sorry mess. Still, if tough measures accompany the plan, and serious oversight is instilled, it may well cover the gaping wound long enough for other factors to work themselves out.

Either way, there will be much pain. Thanks, in large part, to the GOP and their culture of anti-regulation and greed.

As John McSame likes to say, Enough is Enough.

(cross posted at Bring It On!)