Hold ON! The Miscreant Brokers and Bankers have kidnapped the Economy, and the Money Supply, and they are saying if we don't pay a ransom they are going to start cutting off its appendages and mailing us the bloody pieces one at a time. I mean, Bunny Economy owed money all over town!

This process began with the Bear Stearns little toe. And Big Daddy Paulson has been stepping up each time with the Moolah.

Wait a minute, this is beginning to sound like The Big Lebowski!

Where's da money Lebowski? We are Nihilists. We believe in Nuussing!!

Maybe some of these economists should take some basic physics courses and review the concept of reaction/recoil. The full faith and security of the United State has become a large bubble of debt, so taking on 700 billion+ to save Wall Street from its debt only further burdens the dollar. The stock market sank early last week, as everyone fled to treasuries, driving the yield to less then one percent. When this plan was proposed and the stock market shot back up, was that because everyone thought the worst was over, or was it because they were fleeing treasuries?

A lot of people seem to be arguing for equity position in exchange for bailing out firms. Why. Their most significant assets are paper, a lot of it toxic, and their reputations, now tattered. Is that kind of equity worth a trillion dollars?

There seems to be an awful lot of money pulling out of Wall Street with not many other places to go. See T-Bills rates and Nouriel Roubini is predicting a run on hedge funds is coming soon. Why not give all this money someplace else to go until things settle down. Since according to Krugman the line between T-Bills and currency has disappeared why not set up a new federal investment like a money market and use that to rework things to the extent possible?

I've been puzzled for a while over why Paulson -- for all his faults, a well-respected, tough negotiator -- proposed the bailout in such stark, undiluted terms without any sense that there would be a demand for oversight.

It has occurred to me that he never expected a lot of push back, because for the past seven or eight months he and Bernanke have been doing exactly what he's now proposing and there's been no protest. The Fed's "facilities" (TAF, TSLF, PDCF) have been handing money to Wall Street and taking back garbage in consifderation thereof for most of this year.

It's just now, the Fed -- a private company -- has run out of money and Paulson's got to come to the United States of America for additional bailout funding. I'm sure he thought, "The taxpayers are on the hook for any losses suffered by the Fed. They haven't protested before; why would they protest, now?"

"What's the diff?"

So, what is the difference?

The bail-out legislation needs to include the following:

"Any corporation that turns over more than $100 million in instruments to the United States or its assigns agrees that any and all corporate officers and members of its board of directors, holding those positions on or after June 1st, 2007, will not hold officer or board positions in any publicly-traded U.S. corporation for a period of ten years from the date of the transaction."

These people are demonstrably incompetent at their chosen field, and have a criminal disregard for their shareholders and their country. They have to be removed from the field.

Sub-prime crisis explained clearly:

http://www.youtube.com/watch?v=mzJmTCYmo9g

Rep. Barney Frank, the Financial Services Committee chairman, says a great deal of progress has been made in talks between lawmakers and President Bush's team on the rescue. AP, 9/22/2008 3:32 EDT

Death by a thousand cuts-- brought to you by your Democratic Congress.

Jared, all good points. These are all commonsense suggestions. However, no amount of add-ons and amendments to this stinking pile of garbage of a bailout plan will obviate its odious ramifications for the economy. This plan must be rejected. The simple fact is that the post-Bretton Woods floating exhange rate monetary system is DEAD. What we are seeing now is the putrification of that corpse. This isn't about some bad mortgages. I can't believe so-called economists fall for this BS. This death of the system is the result of:

-Nixon sinking Bretton Woods in '71.
-The (fake) oil shocks/shortages of the mid-70's that created the London-based spot market.
-Deregulation of transportation (trucking and airlines), the health industry (rise of the HMOs), energy, trade, banking, etc., - starting primarily with Carter and continued by every president since.
-Globalization - all the trade "deals" of the last 15 years. This country has ALWAYS protected its industry throughout its history, until Reagan. We've gone from averaging 25-40% tariffs to 2% today.
-Alan (Bubbles) Greenspan - Easy money, the hedge funds, dirivatives - Baby, anything goes that keeps the carrosel spinning.

All this has resulted in transferring manufacturing and wealth creation out of our country and also transferring enormous nominal paper wealth into the hands of the parasitical uber-rich upper few % - a few % that are many of the same "managers" and execs who are asking for a few trillion dollars to make their hangover go away.

No, the system is bankrupt and dead. There is no real Dr. Frankenstein (Paulson's role model?) to breathe life back into the corpse. He may get sexually aroused by the thought of so much money, but it will have no salubrious effect on the real economy - quite the opposite. It will drive a hyperinflationary spiral and just make a collapse even worse.

-Put the system in bankruptcy, similar to FDR's solution. Protect homeowners, pensions, chartered banks and employment.
-Write down the trillions of worthless paper bound up in the dirivatives Ponzi scheme. The amount of money being promised back and forth among international financial institutions dwarfs that of the real world physical economy.
-Get Russia, China, India and the US together to create a new Bretton Woods fixed Exchange rate system, updated to today's realities.
-The Treasury and US Congress can then utter credit (the US constitution created a credit creating system of government, as opposed to the European central banking model - which is accountable to no government) to re-start productive investment in the real physical economy - food production, transportation and energy projects, other needed infrastructure.

An FDR program is required. It is the only thing that will work. Obama has to be the second coming of FDR. No neo-liberal program will work. Right now, he advocating neo-liberal solutions. That will make him another Hoover, not another FDR.

Cap markets are unstable. In the past there was no way to make them stable. But today we have computer power that can be used to make them stable. By using the greater computer power of today we can have a much higher turn over of cap in the cap market. This higher turnover will make the market harder to fix or control and the market will no longer have the unstable run ups or declines. Who can change or control the market when say 20% of the capital is trading each day. So now that we have the compute power to provide for all these transactions that will smooth out the market how to we force people to turn over at a rate of 20% a day? Easy, put a cap gains tax of 0% (zero) on all gains of 7 days or less and put a cap gains tax of 90% of all gains of 7 days or more. The likes of Yahoo Micosoft and/or Sun Micro Systems will give us the systems that will provide automated software agents to support turning over one's investments every 7 days (based on the specs you give the agent). A system like this will make the financial markets work as smoothly as the local fruit market.