Thursday, September 25, 2008

Rewarding incompetence.

Dean Baker of TPM Cafe:

This raises the basic point that it is extremely difficult to trust this administration. It was good to hear President Bush say that he doesn't want the CEOs that wrecked their companies profit from this bailout, but does anyone believe that he will structure the bailout to ensure that this does not happen? Similarly, he has gone along with the idea that the government will get an equity stake in financial companies in exchange for buying their junk, but does anyone believe that we will get as good a deal as Warren Buffet did when he bought a stake in Goldman Sachs?

There can be no presumption of good faith from this administration. Unless the conditions are written in stone, for example specific rules that limit executive compensation using the same type of language that CEOs use when they sign contracts with their companies, there is no reason for the public to believe that they will get a fair deal in this bailout. The public should also demand that some genuine outsiders, representatives of labor, consumer groups and other non-Wall Street segments of society, have a direct oversight role in this deal.

If these demands are too extreme for the Bush administration, then they are not telling the truth about the financial crisis. If the risks are really as great as President Bush claims, then he should unhesitatingly agree to guarantees that will prevent the incompetents from profiting further from their incompetence. We shall see.

So this bailout is kinda like George Bush's golden parachute.... shoring up the economy so he can saunter from the Oval Office with plausible deniability? (The economy collapsed on Obama's watch!) Bush is doing it again, isn't he?

Leaving us the mess after trashing the place.


Don't think it will work this time, Georgie.

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