Foxes Guarding the Henhouse

Well, I awake to a terrible churning in my stomach again. Not as one might expect about the 25% loss, including my house, in my net worth this year, but rather the idea of the rescue. As I understand it, the proposal is for Hank Paulson, former Chief Executive until 2006 of Goldman Sachs, says Treasury must buy $700 billion of bad debt from Goldman Sachs, et al on Wall Street and then hire Goldman Sachs, et al to dispose of this bad debt over time to try and recoup some of the $700 billion the tax payers are being saddled with. This must be done in a matter of hours and there must be no amendment of this proposal, it must be clean. Well, pardon me, but I really don't like this idea at all. Even if I accept we must do something to recapitalize the markets, it can't be done just totally on the sayso of one man with no strings attached.

One alternative, If everyone agrees, we must buy the debt it should be done outside the Treasury. Treasury has enough problems and they need to be managing the bleeding federal treasury, not bailing out wall street. A separate, independent entity must be in charge. I recommend that someone like Eliot Spitzer be put in charge. Yes, I know he fell from grace, but it was over his sexual problems, not his public trust. The Republicans have forgiven David Vitter R-LA, Larry Craig R-ID, and Dick Morris, the foot in mouth disease at Fox News, and many other transgressors. If Spitzer can give up call girls, he is a great champion of the little guy against Wall Street. If not him, then there are a number of state Attorney Generals who might fit the bill. Or Paul Volker who warned against it, or Warren Buffet who has been out of these crazy securities for five years or someone they recommend. This person can hire the laid off wonderkin of Wall Street at government salaries and let innovation reign for the good of the government this time, instead of Wall Street.

An other alternative was proposed by Paul Krugman of the NY Times
Cash for Trash.

I'm sure there are other alternatives out there, but this one either needs further contemplation or it needs to be rejected.