How does your garden grow? With muck, muck and more muck! I spent much of today finishing the final muck box and then shifting muck from one box to the next. The first box, which the Big Lad is enthusiastically pointing out, has been rotting down for two years now and once we’d removed the top quarter of unrotted material, we found we’d hit the pay dirt.
I am writing in opposition to the proposed $700,000,000,000 taxpayer bail out of the financial sector, at least in its current form. I think it would be outrageous for the taxpayers to simply purchase toxic debt from the private sector while getting nothing in return and doing nothing to help the people who are most in need. The financial sector created this bad debt and it needs to clean up its own mess to the largest possible extent. There are other approaches, such as those proposed by Sebastian Mallaby of the New York Times and Doug Elmendorf of the Brookings Institution (essentially buying equity in financial institutions, instead of buying their "assets"), that would infuse capital into the financial sector without sticking the government with hundreds of billions of dollars of worthless debt and without rewarding bad actors on Wall Street by simply buying away their self-made problems. At an absolute minimum, public money must come with sufficient strings attached to ensure that this kind of mess can never be created again and that greedy and irresponsible executives are not rewarded with millions of dollars while the taxpayers foot the bill.
We have been down this road before of voting on hugely consequential legislation without sufficient consideration or debate in response to a Bush Administration "crisis" (see, for example, the PATRIOT Act). I will be sorely disappointed in Congress if you do not take the time to get this legislation right. The current proposal does not do nearly enough to fix the underlying problems. I agree with Paul Krugman, who has written that the plan "looks like an attempt to restore confidence in the financial system . . . simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world. And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving."
I urge you to oppose the current proposed bailout.