KEY ELEMENTS FOR A GOOD BAILOUT

ELEMENTS OF A GOOD TARP PLAN by Norton West
1. NO! STOP! START OVER – TARP / PAULSON PLAN is poorly conceived, has bad assumptions, rewards the culprits, punishes the victims and will not work. This is too important to yield to fear tactics and a rush job by lobbyists and the Administration. More than 200 economist oppose this plan including Marc Faber, Nouriel Roubini, Jim Rogers, past FED officials: http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm
2. START WITH A COMPREHENSIVE CRISIS ANALYSIS IN ADVANCE of approval. No more piecemeal plans. There must be limits on the total exposure. Is it Paulson’s $ 700 Billion or Marc Faber’s $ 5 TRILLION? Who can we trust? Who is accountable? What are the consequences of failure? Who takes on the consequences?
3. Form this plan in light of our national budget and priorities: education, defense, security, jobs, health insurance etc., and renewable energy. We must not supersede all other national priorities for the next ten years with this effort.
4. 100% focused on home owner, consumer debt stabilization and benefits. The middle class is what drives growth in our economy. Stop interfering with the Free Market by taking on worthless assets.
5. PAY-GO PLAN – like during the Clinton Administration; expenditures must be covered by savings elsewhere.
6. Constitution: What happened to three branches of gov’t and balance of power? This is a power grab by the executive branch to be implemented by the very people who designed these derivative instruments. Where is the separation between Monetary and Fiscal Policy now? There is no confidence that they will act in the Public’s interest. The Congress shows no spine to represent the voters instead of the corporate lobbyists.
7. Primary Plan Tools: Use FED’s existing “auction facilities” provisions that started this spring. That is it for Wall Street help! Let the Free Market work.
8. If any equity purchases are offered to Wall St. by the Treasury, they must be preferred shares and purchased at the discretion of individual taxpayers much as an employee can purchases stock in his employers business.
9. Repeal the 2005 Bankruptcy Law and Predatory lending practices of credit card companies etc. This cannot stand! It is counter-productive to growing the economy.
10. Establish on-balance sheet accounting rules including a transparent method of amortizing the value of mortgage backed securities. Investors must see true value of assets now. If we must buy, then at Mark–to-market NOT mark to maturity (fantasy)! If Wall St. doesn’t like this, it is a reflection of their irresponsibility and they (not the taxpayer) should deal with it! Let the Free Market rule
11. GO to Voter Referendum on Election Day! This is too important for our future growth and our grandchildren to be rushed through without broad national voter support.