CommunityFDL Main Blog

Paulson: “Forget my plan, let’s copy the Europeans”

hourglass.thumbnail.jpgSeems as if Paulson is considering a significant equity injection by buying shares after all.  He didn’t even want the authority to do so originally, and fought against it, but a watered down clause which requires the government to buy preferred, but non voting shares if it buys a company’s junk is in the final bill.  It’s very discretionary language, which leaves the price and so on to be determined by the Treasury secretary, but it’s there.

This is what England is doing, except that they’re probably getting voting shares, thanks.  And its what other countries have done in the past.  I’m not convinced it will solve the problem, but it at least makes sense if you think the banks main problem is insolvency.  What doesn’t make sense is having the shares be non-voting.  If the government has to bail you out and save you from your own stupidity greed and incompetence, the government should also get to tell you how to run your business until you’ve paid all that money back.

Because there’s a strong argument that the problem isn’t just insolvency, but that banks don’t want to lend deep below the rate of inflation, I don’t think this will solve the entire problem.  Still, there’s no question that insolvency is a problem so this is probably a good idea.  As usual when dealing with Bush and Paulson, however, they’re doing the right thing in the stupidest way possible however, in order to assure that the rich fools who run the banks don’t lose the power they so badly misused. I guess, given that they don’t believe in responsibility for themselves, they see no reason to impose it on other powerful rich men.  Responsibility, after all, is only for homeowners who can’t repay mortgages, not for CEOs who paid themselves millions and destroyed their companies and the economy.

Free market fundamentalism in action.  Too bad the Democrats didn’t insist on getting Buffett shares rather than non-voting crap, or that judges be allowed to revise mortgages to allow homeowners to keep their homes.  But Obama promised Donna Edwards he’d get bankruptcy reform through as President.  I trust that promise will mean more to him than his promise to vote against FISA.

Previous post

You don't need a weatherman to know that your campaign blows

Next post

Sixties Sex Symbol Brigitte Bardot Says Palin's A Threat

Ian Welsh

Ian Welsh

Ian Welsh was the Managing Editor of FireDogLake and the Agonist. His work has also appeared at Huffington Post, Alternet, and Truthout, as well as the now defunct Blogging of the President (BOPNews). In Canada his work has appeared in and BlogsCanada. He is also a social media strategy consultant and currently lives in Toronto.

His homeblog is at