Tuesday, September 23, 2008

Pay It Backward, Paulson

Dropping by the Senate Banking Committee this morning, Hank Paulson pointed his bony Ghost of Christmas Future finger at both "bad lending practices by banks" and "borrowers taking out mortgages they couldn’t afford."

Fascinating, how the current woes of Wall Street megatitans are linked to low-income borrowers at the opposite end of the socioeconomic spectrum. It's like a hokey movie where, through some improbable plot device, two people who can't stand each other get handcuffed back-to-back and must work together to escape.

Here’s a suggestion, Congress. Don't try to put limits on Wall Street compensation; there's no time to structure them properly, and lawyers and consultants will just loophole their way out. Instead, claw back some of the millions Wall Street CEOs earned over the past few years and use them to backstop mortgage payments for those who face foreclosure.

Under my French Revolution Plan, everyone wins. Folks will keep their homes, and with mortgage payments assured, the market for mortgage-related junk should become more liquid. The credit markets will thaw, the stock market will rise. The election will go back to being a silly spat about - what was it, bitter lipstick? Even my hair will cooperate. What a lovely dream.

Sure, I'm advocating a pure redistribution of wealth. Sure, it’s socialism. But so is Prime Minister Paulson’s plan. The time has come for extreme and dangerous action, whether it's a size XXXL government bailout that might or might not work, or women sporting jumpsuits in public.

1 comment:

David J. Phillips said...

Your wit is welcome comedic relief from watching three hours of Banking Committee posturing by Senators more interested in making sure their hair pieces do not slide off on camera than the general welfare of the middle class in the U.S. And, over in the House, Barney "Never Met An Entitlement I Didn't Like" Frank says we need MORE regulation -- two years after refusing to back federal oversite of FNM....something about how it might refuse the writ of zero down-pmt, zedo-interest loans to poor folks--which he fully lauded!!!

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