Lex Luz

What's Wrong with the Trickle-Down Bailout?

A well-written article that points to some of the flaws with the current plan, which is clearly tailor-made to punish taxpayers to the greatest extent possible. Frank's demands for bankruptcy cramdowns and for CEO pay reductions are idiotic window dressing designed expressly to distract taxpayers from the theft that is this bailout package.

The fact that the bailout is designed expressly to grossly overpay for the weakest of the toxic bonds cannot be stressed enough. Taxpayers have a hard time understanding that this program won't cost $700 Billion, it will cost well into the trillions, and it is positively guaranteed to enrich the very banks who have made this mess. There are no provisions in this bailout to increase transparency or to facilitate the creation of a marketplace for these assets that would force some meaningful price discovery.

The bailout as constructed is theft, pure and simple. You can bet that Dodd, Frank, and the rest of the Congresspiggies who vote for this trash will profit handsomely from it.