- Cul lists 10 demands regarding the bail-out:
- No bailouts without conditions and reciprocity in the form of stock warrants.
- No more lobbying for any company that is bailed out.
- No golden parachutes or get-out-of-jail-free cards for guilty executives.
- No bailouts without public hearings.
- Reduce the moral hazard in U.S. mortgage markets by introducing covered bonds for the majority of mortgage products, as is done in Western Europe. That gives institutions that finance mortgages an incentive to be prudent, because they cannot just unload them and wipe their hands clean of the liability, but are instead on the hook if the homeowner defaults.
- Maintain neighborhood stability and housing security by passing a law with a sunset clause allowing below-median-value homeowners facing foreclosure the right to "rent to own" their homes at fair market value rates.
- Avoid future housing bubbles by removing implicit government guarantees for new mortgages that exceed thresholds of greater than 15 to 20 times the annual fair market rent value of the home.
- Make the Federal Reserve a Cabinet position, so it is accountable to Congress, as well as make sure all Federal Reserve Bank presidents are appointed by the president and answerable to Congress.
- Reduce conflicts of interest by taking away power for auditor and rating agency selection from companies and placing it in the hands of the SEC to be administered on random assignment.
- Implement a securities speculation tax, starting with derivatives, to deter casino-style capitalism.
23 September 2008
I feel strongly that any bail-out package should include provisions that limit executive compensation of firms that benefit and include at least partial state ownership of the firms. Why in the world should tax payers put forth their money and get nothing in return? Why should current home owners who lost their entire life savings save firms with executives running off with millions in compensation and pension packages for life?
Posted by Karlo at 12:49 p.m.