Let's just say that there are several changes I would want to make to the legislation. Beyond tossing Section 8, which IIRC is the clause that removes any oversight and/or prosecution for the Federal Reserve. When voting out that clause, Paulson needs to be on the floor of the House or Senate to have the members point at him and laugh in unison. Seriously, did you really expect that one to get through? It's an insult to my intelligence.
First off, want the money? Fine. Your top 15 executives can not be compensated more than $400,000 a year (note, that's compensation which includes bonuses, true market value of corporate benefits such as jets, house, etc, it also includes stock options, gifts, and the $5 the chairman spots you to get a coffee) for the next 8 years. Failure to comply is a class one felony with no less than 4 years in minimum security for the executive, the CEO, and the Chairman (if they are different people), forfeiture of any licenses and professional memberships (such as NYSE privileges and seats), and a fine equal to two years of compensation (for all involved).
Oh, all "golden parachute" clauses in your company are null and void, permanently, for any sitting executive above "manager." Failure to comply (see above).
No bonuses for four years (see restrictions on 15 top executives which is more restrictive). The Board will be reconstituted following some rules allowing for independence and control (here I would have to read more of the various shareholder initiatives that have been lately floated).
If your CEO, CFO, or chairman has resigned in the past year (with a "golden parachute") your firm is disqualified from this program. Also, if your nominal headquarters (or headquarters of record) is off shore you are likewise disqualified. Period. No taxes, no money.
Would this be hard? Yes. Tough. Deal with it. The argument about "losing the high caliber people we need to turn this around" is crap. These are the same people who got us into this. Their "qualifications" in my mind are highly suspect. You say you can't live in NYC with such a small amount of money? Tough. Your high pay is what ran the cost of living so high. Welcome to the top 8% of the economy (instead of 1%).
The bad part about my plan? Much of the NYC economy is based around the year-end bonuses of a few people. Those bonuses do trickle down to even the doorman who makes sure your door is open for you and closed to me. That these people (doormen, maids, maintenance workers, etc) will be hurt more by the lack of bonus pay is regrettable. However, in the effort to "keep good people in the correct positions" their pay may be adjusted up to where it should have been instead of keeping them in economic serfdom. Good for the goose, good for the gander.
Also, given the immense debacle of money sent to Iraq (Remember pallets of bills which took out room for munitions on C-130 flights? Remember "and bring a duffle bag" being said to people that the month before didn't even have a passport and now they were to "rebuild Iraq"? Remember the billions of dollars unaccountable?) I am very suspicious of this plan, overall, because of the "no oversight or prosecution" clause.
Oh, and have I made the argument for avoiding "moral hazard"? Think my proscriptions for pay and prosecution are tough? If I was worried about the "moral hazard," which was the argument against "adjusting" individual mortgages, I would simply say, "Let 'em crash."
I say, buy the "illiquid assets" at bargain basement prices (I don't like reverse auctions, but here I would approve, hey, Wall Street has already adjusted to these papers to being worth zero, that's why we're having this problem, go it? Also, of the $700+ Billion only so much will be spent every quarter, so there's only so much money to buy those assets which will give incentives to bid down the price) rewrite those mortgages that are untenable (which, frankly, irks the shit out of me being someone who bought half-as-much house as people thought I should, and I would have liked, because I was living within my means, and will hopefully pay off 10-15 years early, but I don't see a way around it that wouldn't hurt the average home-owner more), and then resell the papers back into the market at as high a price as possible.
Oh, and if this doesn't work and we need to do something else, I recommend not just getting "warrants" for stock from the companies we bail-out, I say they come under an umbrella government management company that we as tax-payers would own the majority of stock (say 60% of all stock - numeric and preference - such as A, B, and C). Fire the CEO, CFO, remove the board, after voting in an abdication of "golden parachutes" as the majority holder, and then sell off their assets or manage them to the point of selling them back into the private market.
And at the end of all, if there can be no agreement to harsh (and yes, they should be harsh) terms. Well, let them fail.
Finally, there's talk of the Lehman execs getting bonus pay. Let's just say that the term "class action lawsuit" was made for a purpose. If I held stock in the company, I'd be warming up the lawyers. Your bonus will be mine.
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