we need to make the political personal
Hank Paulson, US Secretary for the Treasury, wants a "clean" bill to bailout the investment banks.
$700 billion, he disposes, no review or oversight.
Now, there is an argument that the bailout will lead to a probable profit for the taxpayer in the long run.
The argument is that forced sales of mortgage bonds have driven prices too low, and that vulture investors are waiting to pick them up for too low a price, after the banks go under due to positive feedback driving down asset prices, and the government must not only save the banks (for systemic reasons) but also preclude the vultures making obscene profits.
Magically we rescue the financial system without needing new regulations or stopping the practices that got us to this point.
So, the bad bonds will be bought out at a "rational" price, at a premium (ie much higher) than the current market price, because really things aren't that bad, the markets will stabilize and holding the bonds will lead to recovery, good return on investment and increasing value - ergo profit for the taxpayer, and no need for equity stakes, buyback assurances or any other finanical guarantees.
Trust Hank.
Could happen.
Something like it happened in the Great Scandinavian Banking Collapse.
Of course dour scandinavian bureaucrats oversaw that and in the process spanked the errant young bankers.
But, ok, we trust you Hank.
So, you chip in!
You say it is a good bet.
You are allegedly worth $700 million, mostly from your days at Goldman Sachs, last (former) investment bank standing and major financial innovator.
So... Hank Paulson should personally buy 0.1% of the bonds the government picks up.
From his own money.
It is a good long term investment, right?
Ante up.
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I agree. And generalize.
WHAT'S SAUCE FOR THE GOOSE IS SAUCE FOR THE GANDER
The Cabinet-level Modest Proposal
Secretary of State Condoleezza Rice should take personal vacations only in those dictatorships which her Administration supports.
Secretary of the Treasury Henry Paulson "should personally buy 0.1% of the bonds the government picks up.
From his own money."
Secretary of Defense Robert Gates should vacations only in those countries where American troops are protecting our interests.
Attorney General Michael Mukasey should have all his legal problems solved by political appointee attorneys selected according to Conservative litmus tests, and they shall handle all Appeals, and Supreme Court Reviews. His phone and email shall be tapped for the rest of his life, and available to randomly selected citizens commenting on Slashdot.
Secretary of the Interior Dirk Kempthorne should take his whol family vacationing in National Parks and sites where he's allowed corporations to conduct mining/logging with no responsible clean-up. He shall drink only that water taken from navigable streams and rivers chosen at random in the USA.
Secretary of Agriculture Edward Schafer should only be allowed to eat food approved by USDA and distributed to poor people. The cheese and peanut butter are particularly recommended. He shall tell Earl Butz's famous joke to very minorty member and disabled person he meets for the rest of his life.
Secretary of Commerce Carlos Gutierrez should have his pay raised when our balance of payments is potitive, and cut when it is negative. Ooooh.... he owes the USA a lot, thanks to our balance of trade with China lone.
Secretary of Labor Elaine Chao shall live on Unemployment Compensation for 1 full year, supplemented by Food Stamps if necessary.
Secretary of Health and Human Services Michael Leavitt shall have no personal physician for himself and any family members, but use Emergency Rooms of local hospitals. And shall retire on nothing other than the average Social Security payments of American citizens.
Secretary of Housing and Urban Development Steve Preston shall live for 1 year in a FEMA trailer.
Secretary of Transportation Mary Peters shall only travel Economy Class on airlines, and ride what busses and trains are available in any US city she visits.
Secretary of Energy Samuel Bodman shall have his pay go down when gasoline prices go up, and vice versa. Proportionally. He shall camp in the part of ANWAR immediately downwind from any drilling.
Secretary of Education Margaret Spellings shall have all her family members, grandchildren, great-cgrandchildren, unto the nth generation attend urban public schools, subject to No Child Left Behind. Those descendants shall go to state Community Colleges and State Universities only.
Secretary of Veterans Affairs James Peake shall have no personal physician for himself and any family members, but use VA hospitals for all services. And fill out all paperwork himself.
Secretary of Homeland Security Michael Chertoff shall have no personal bodygards except those chosen at random from airport security personnel. His name shall be irrevocably entered on the No Fly list, until all those who legitimately ask that their names have been removed, have been removed.
Any comments?
Jonathon: A comment from you that I agree with!
Wow - a BiPartisan day indeed!