The Bailout: Some Thoughts

October 2, 2008
By Mukesh Chatter

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There's been a lot of controversy surrounding the bailout bill - politics and idealogy have collided in such a way that lawmakers have to choose between voting to help the country or angering their constituents, who they nominally work for.

However, there is no denying the intense anger in the "Main Street" part of the "Main Street"/"Wall Street" equation we heard so much about during last week's debate. The anger is further amplified by the absence of any commitment on the part of those drafting the bailout to find and punish the guilty parties who got us into this mess in the first place. I believe it's this lack of accountability that is fueling the rage your average person on the street is feeling. The bailout proposal should include a plan to address this fairness issue to get the public on board.

The following actions would be a good start:

  • All the executives (going back the past three years) of these firms should be required to return any money collected beyond wages to this bailout fund.
  • A commitment should be made by the government to thoroughly investigate any potential wrong-doing on Wall Street.
  • Those firms benefiting from taxpayer money should be required to contribute a small fee per transaction in the coming 5 years towards a rainy day fund to prevent further calamity.
  • No more bonuses - NONE - until this bailout is paid off – this year $37 Billion was paid to the top 5 Wall Street firm executives for their “top-notch” 2007 performance.
  • Just like short selling is not allowed at financial firms these days, financial firms should be excluded from hiring any lobbying firms or make any political contributions for at least the next 5 years (this one will probably never see the light of the day, but it may also be the most effective).

If you agree with me, please share it with your friends. I am curious to know what you think.

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