I hate the bailout package. I’m of the opinion that these companies all should be allowed to fail regardless of the impact on the economy and the markets. I guess you would say I believe in survival of the fittest for businesses and corporations.
Today I was listening to a public radio show called This American Life and I heard something I do like about the bill that was passed. When Paulson and his cronies were initially considering their options for handling the crisis a better one was presented than to purchase the “toxic assets”
The better option was a Stock Infusion deal, where instead of buying the assets, the government would be buying stock in the companies. This would give the government (and us the tax payers) a much better chance of recouping our losses.
The idea was rejected due to pressure from the bank lobbyest (banks hate the idea of Uncle Sam getting in their business and having a say in what goes on). It was also opposed by conservative Republicans who hate any thing that resembles Socialism.
So, the 700 billion rescue bill goes to the house and gets shot down. In the aftermath, when they were scrambling to get it approved, they were basically passing the bill around the table giving everyone a chance to add their own little special interest piece (read “pork barrel”) so they would be willing to vote it in.
Someone, it’s not known who, slipped in a provision that will allow them to use the “stock infusion” option if they choose to do so.
I’m hoping the news of this better option will spread and enough public pressure will come down on the politicians that they will have to use it. I’d much rather be an owner of these banks than be an owner of something called a toxic asset. I’d also really like to know who the sneaky sob is who slipped it in so i can give them a hug if i ever meet them.