Timothy Geithner seems intent on moving forward with his scheme to subsidize the banks by providing up to a trillion dollars of non-recourse loans to investors to buy their junk assets. As many of us have pointed out, this is a subsidy in that it creates a "heads the investors win, tails the taxpayer loses situation." If the investment turns out well, the investor makes lots of money. If the investment does poorly, then the taxpayer gets most of the loss.

As many of us have pointed out, this will allow some investors to do very well on investments they would have made otherwise, since the government is giving them a large dose of cheap loans. More importantly, it is a huge subsidy to the banks, since it will lead investors to pay considerably more than the market price for junk assets, since the government is bearing most of the downside risk. There are also ample opportunities for gaming, which the shrewd Wall Street crew can be expected to fully exploit.

While this all looks pretty bad, we can use PPIP as an opportunity to remake Wall Street.

The basic point is very simple: we just put conditions on the money, like the government is doing with Chrysler and GM and has done for years with mothers receiving TANF.

There are a couple of obvious conditions that Congress can impose for PPIP loans. First, there should be full disclosure of major investment stakes. Every hedge fund, private equity fund, or other investor who gets these subsidized loans should have to fully identify any investor with more than a 1 percent interest. We should be able to go on the web and find all the individuals and corporations that are taking part in PPIP, just as we can with the stimulus money thanks to President Obama's commitment to transparency.

We can also put restrictions on compensation. Suppose we say that no one working for any investor getting PPIP money can receive total compensation of more than $2 million a year. While none of us would ever dream of restricting how much a person can earn on their own, if they are doing it on the taxpayer's dime, then we get to impose some constraints.

These are very simple conditions that investors should be happy to accept in exchange for government subsidized loans. Of course, some investors may consider these restrictions too onerous, which is just fine. They don't have to take part in PPIP. This will leave more money for investors that are prepared to live within these and other reasonable rules that Congress considers appropriate.

The basic point is simple: if we're going to give hundreds of billions of additional handouts to Wall Street, then we might as well get something in return. Even an economist or investment banker who missed the $8 trillion housing bubble should be able to understand that.