Bailout Plans

Seems the bailout plan has failed. Forget the political implications, as there were large contingents of both parties in the House that killed this. Right now, its impossible to know how the fallout will affect Obama and McCain...which is why both refused to answer the 1st question of the debate. Hopefully, a new and better plan can be hatched out, one with more emphasis on putting people back in their houses and more certain ways of paying for it.

One point that should be raised more forcefully is getting the banks to renegotiate with people that have been foreclosed on. Instead of dumping tax money to buy off bad loans that are worth 20-25% of their former value, make the banks and homeowners go to the courts to renegotiate at 50, 60, or 75% of the value. Or do a tiered structure that rates the loans...some may still be worth 20 cents on the dollar, but others may get a better return.

The second point is to place a small tax on derivatives that would let Wall Street pay this fucker off. Thom Hartmann has an excellent article that you can check out here or here. From the article....

For example, if we were to instate a .25 percent STET (tax) on every stock, swap, derivitive, or other trade today, it would produce - in its first year - around $150 billion in revenue. Wall Street would be generating the money to fund its own bailout.

This tax would also...

have the effect of "mitigating the predominance of speculation over enterprise."

And from the "those who ignore history are doomed to repeat it" file...

When rules limiting speculation were cut during the first big Republican deregulation binge during the administrations of Warren Harding, Calvin Coolidge, and Herbert Hoover (1921-1933), it created a speculative fever that led directly to the housing bubble of the early 20s (which started in Florida, where property values were going up as much as 70 percent per year, and then spread nationwide, only to burst nationally starting in 1927 as housing values began to collapse), then the falling housing market popped the stock market bubble and produced the great stock market crash of 1929. That speculation aggregated enormous wealth in a very few hands, crashed the housing and stock markets, and produced the Republican Great Depression of 1930-1942.

Franklin D. Roosevelt, as part of the New Deal, put into place a series of rules to discourage speculation and promote investment, including maintaining - and doubling - the Securities Transaction Excise Tax. Other countries followed our lead, and the UK, France, Japan, Germany, Italy, Greece, Australia, France, China, Chile, Malaysia, India, Austria, and Belgium have all had or have STETs.

How's this for a plan? Lets go the FDR route and re-regulate Wall Street BEFORE the crash occurs. Its not like this shit hasn't happened before.