I am listening to SD Midday, and we are getting only a blizzard of crap from the callers chosen and the moderator. Guest experts seem to make a little sense. But so far, no numbers that actually raise the discussion above rank assertions. One professor said the problem is very complex.
Last night I talked to a guy with an economics degree from Yale or Harvard and years of experience with accounting and finance. He said something to the effect that even with his education and experience, he was having a hard time getting his head around the bailout issues. He noticed liberals and conservatives on all sides of the issue.
He also said this was a little like the old pick up sticks game because there may be all kinds of unintended consequences. Pull the right stick and nothing happens. Pull the stick that looks OK, but is wrong and the whole pile may collapse. Even so, he thought the bailout may be necessary.
Whatever, I guess we sort of agreed that more time was required to put together a plan that makes sense since the economic system is now so interconnected and complex that it may be that nobody really has the right answer right now. We were also near on agreement that someway to limit absurd executive salaries was necessary. He thought giving shareholders more power (or perhaps any power) to determine executive pay might work. I am not opposed to that, but think somekind of tax on excess compensation that effectively makes absurd executive compensation impossible might be required. And, we sort of agreed that effective limits on the size of corporations, trusts, etc should be done perhaps via taxes or perhaps with "trust busting" ala Teddy Roosevelt.
In a forum, a poster in jest said we should hang the Wall Street crooks and let them rot on Wall Street. Might seem a bit harsh, but it would sure fit in well with the Republican idea that we should provide harsh penalties for even small crimes to send a message to potential criminals by making an example of a kid who steals groceries or kicks a cat or sends obscenity in the direction of a thug cop ready to beat the crap out of anybody who calls him a f'ing dumb pig.
More seriously, numbers about the catastrophe are sorely lacking. Below are some I found and put together which may or may not be relevant or based on the most current data which I could not find.
$700 Billion would pay 8% annual interest on all the sub prime home loans for about five years. It would pay at 8% per year for one year all the interest due on all US home loans.
There are apparently $7 Trillion in total US bank deposits. Interestingly, the bailout boondoggle bill would have raised the US debt limit to $11 Trillion. But, if you wanted to generate $700 Billion, a tax of $1 on every $10,000 of US bank deposits would generate $700 Billion.
Obama wants to raise FDIC guarantees to $250,000. Might not be a bad idea if perhaps the free part of it applied to the first $50,000 and then there was a 50 cents per $10,000 of deposits above $50,000 to put into an insurance fund for the FDIC. But, if you have better numbers, why not share them. We are getting nothing but assertions from our officials.
And, in the perversity at any cost department, The best way to send a message of confidence to free up the capital that is washing around but is not liquid because of a lack of confidence by lemming bankers would be for congress to say there was no need for a $700 Billion boondoggle bailout even if President Liar says the sky is falling. And then suggest that bankers get their heads out of their asses and make good loans on devalued property.
Well, that may be more than anybody wanted to read on this, but, one more point. A poster (not I ) in some forum said he wanted know how a three-page document from Treasury could obligate congress to dump in $700 Billion when he had to sign something like 30 pages of boilerplate to get a small home loan.
*** Stay tuned, and if you have real numbers, please share them--- Doug Wiken