Stop the mismanagement of the bailout. Here are the steps: (1) recover $700B, (2) mine IRS data for homeowners who are US citizens, (3) deliver $100k directly to each homeowner and citizen, (4) install new lending guidelines and requirements, (5) install glass ceiling compensation for Fortune 100 executives.

Results: rewards those who are fiscally responsible rather than irresponsible, stems foreclosures and enables banks to rewrite mortages on good paper, increases deposits and flows money into lending, helps local businesses via cash to potential customers, provides clear tranparency to "where the money went," sets a new baseline (bottom) quickly, enables those without mortgages or low mortgages to pay for college for thier kids.

This is not rocket science. The trickle-down initiative currently underway is poorly constructed under the belief that government is more responsible than the citizens it serves. This is simply flawed--just look at all the executives pandering for entitlement to $700B.

Bring governance back to government and accountability back to the people. We are not about not special treatment and special interests.

One note about the Big Three. This is absurd--go into bankruptcy, restructure, renegotiate with unions to bring salaries in line (from $78 per work hour to $40 per work hour). In the meantime, the mortgage plan above will reduce the average worker's mortgage by half, resulting in a smaller net change in cost of living vs layoffs.

I merely suggest that common sense rule the day, rather than common idiocracy.

Charles Reinighaus

Indialantic, FL

Today I found an item from the UK Daily Mail that said when Goldman Sachs had requested, and received, $12 billion as their part of the bailout, all the while they had reserved about $14 billion for bonuses for their 434 partners, who will each get about $6 million a piece for Christmas.

This is sickening, amazing, horrific.

Gabriel Becket

Portland, OR

I'm against the $85,000,000,000.00 bailout of AIG. Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend. To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billion that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend. Of course, it would not be tax free. So let's assume a tax rate of 30 percent. Every individual 18+ has to pay $127,500 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500 in their pocket.

A husband and wife has $595,000. What would you do with $297,500.00 to $595,000 in your family?

Pay off your mortgage--housing crisis solved.Repay college loans--what a great boost to new grads. Put away money for college--it'll be there. Save in a bank--create money to loan to entrepreneurs. Buy a new car--create jobs. Invest in the market--capital drives growth. Pay for your parent's medical insurance--health care improves. Enable Deadbeat Dads to come clean--or else

Remember, this is for every adult US citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

If we're going to redistribute wealth let's really do it... instead of trickling out a puny $1,000 ("buying the vote") economic incentive that is being proposed by one of our candidates for president.

If we're going to do an $85 billion bailout, let's bail out every adult US citizen 18+!

As for AIG--liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here's my rationale. We deserve it and AIG doesn't. Sure it's a crazy idea that can "never work." But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $85 billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington, DC .

And remember, my plan only really costs $59.5 billion because $25.5 billion is returned instantly in taxes to Uncle Sam. Ahhh... I feel so much better getting that off my chest.

Tim K. Parkinson

Salt Lake City, UT

I have an alternative to the rescue plan that I think that conservatives might be able to support. Vouchers. Seven hundred billion works out to more than $7,000 dollars for every man, woman and child in the country. Let’s send each of us a $7,000 voucher for primary residences.

For those with failing mortgages this could save them. For those with sound mortgages, they could pay down some of their principal. Those that rent could use the money they save to pump up the economy, or it might augment their savings enough to let them buy something.

This would stop the drop in house prices, and indirectly pump more money into the credit markets. It would also be fair. Instead of bailing out the bankers we could bail out everyone. This would be popular with voters!

John McGloin

Staten Island, NY

If my business fails because of management mistakes and a bad decision along the line, is the government going to bail me out?

Why do these businesses get special treatment? I paid over $40,000 in taxes this year to date, and yet when I filed for help for disaster relief, I did not qualify because I make too much money! Amazingly enough, everyone getting assistance from the government qualified to get more assistance from the government--you know, the ones sitting at home not working, collecting food stamps and welfare! I'm getting a little tired of providing everyone else with a living. I'm tired of "bailing out" these sectors of private business because they make bad decisions--the salaries for the people that work in these sectors are incredibly high!

If the government is going to step in and help, I suggest they take all the corporate officers and put a salary cap of $60,000 a year on them until they pay back the money they are given to bail them out. Make them sell the house they live in and give up all the perks that they have! Bring them back to reality. Let them live like most people live and make them sign a contract that they have to stay and keep the same salary until the money is paid back, or they don't get bailed out!

I'm tired of paying for everyone else's mistakes in life! If you got flooded from a storm or devastated from a storm and rebuilt in that same area, sorry, you are on your own, FEMA is not a national insurance policy because you are ignorant!

It's not up to you or me to continue to pay for everyone else's mistakes, their bad decisions in life, having children they cannot afford to raise, being a drug addict, being an alcoholic--I'll assist you with something once, but if you fail at that attempt, don't look for any more assistance. We are supposedly a democracy, but yet everyday I watch this country turn more communistic and socialistic in its views.

The only thing bailing out industries does is give them a feeling of security that when they fail they will have us all to lean on. I'm sorry, I have too much leaning on me now!

Seven hundred billion dollars of extravagant life styles, lavish vacations and lunches, lavish homes and vehicles, expensive parties and toys to play with, that's what you are handing out! Add up all the salaries of all the corporate officers over the last decade and you will see it adds up to the $700 billion we are getting ready to hand out to these "institutions." Government is out of touch with society. Enron all over again!

America is not what it used to be.

Stop the bleeding--let these companies figure out a way to bail themselves out, let them reduce salaries, streamline business, let them figure it out. If they need a loan, then let them go file the paperwork to get a loan just like every other person and business has to do. Make them stand on their own!

Tired of handing out and getting nothing in return!

Jeffrey S. Carr

Houma, LA

It seems that many Americans want Wall Street to crash, as if financial institutions were isolated entities and existed within a vacuum. Don't people understand what would ensue were these huge banks allowed to founder? Retirement funds, insurance policies and any investments would be wiped out. Regulations need to be restored and the mortgage mess needs to be reconfigured. There are, after all, real estate assets that have intrinsic worth. Regulations also need to restrict the size that financial companies can become. The far-reaching effects of these huge financial conglomerates is a strong factor for having to intervene when they fail. The current state of affairs on Wall Street is a direct consequence of laissez-faire deregulation, and now Main Street must foot the bill, and in so doing, Main Street has to learn from this experience... that "regulation" is not a hindrance against freedom but is protection against destructive greed.

Kate Simpson

Chateau-Renard, France

They say $700 billion dollars will keep America from falling into the grips of a great depression. They say greedy Wall Street investors did it. Maybe all people were a little too greedy these past years, maybe we are all a little to blame for this financial crisis.

Maybe there is some truth in the idea that this has come about because of the the atheistic and animalistic ways man must struggle for life and dominance for his survival, maybe a little too much dog-eat-dog and "may the better man win" at any cost, maybe like a backyard squirrel many of us hoarded and collected so much money during boom times, we stuffed so much away for ourselves, our family, our descendants for many years... maybe a little too much me me me.

But maybe there is some truth to the idea that we are all the children of God, somehow placed on this magical and wondrous planet Earth with a chance at free will and exploration to learn to be better than before, to grow with enlightenment and prosperity for all our brothers and sisters on this ship we call Earth. Maybe we are all our brother's keeper, and maybe there is some truth in what one of the greatest who taught compassion towards one another, the Christ, the man called Jesus--the entity many cherish as the symbol of a life lived and devoted to all of us in purity and love in the eyes of heaven---declared to the rich man: "Give it all away." Surely this statement is hard to accept and exercise--it seems to go against the grain of instinctive animal behavior. Yet there is logic and peace in such a statement, as we are all the same family in times of need. Soldiers know no color or creed in battle. Man feels the love he has for his own children, and sometimes in life we know inside this is the feeling the heavens have for us as they watch us during our growth upon earth. Maybe there is some truth to this.

The American taxpayer is now asked to shoulder the burden--I guess we will and have no say--but I say to all who are rich, whether a person or corporation with an excess: give as much as you can away. Match the $700 billion like an employer matches contributions to a 401(k): double it, triple it! Let the children of the earth know we are one together, struggling in this life for food, healthcare, survival and love for our children to prosper and build a better life.

Give and match the$700 billion--maybe even a tax credit from Uncle Sam as a donation.

God bless us, everyone.

SOLOMON AZAR

Catasauqua, PA

The "crisis solution" may be part of a plan to gut Social Security. Paulson's blank check could well be the most outrageous move of an administration that has had no qualms in the past about using crisis situations to achieve hidden agenda. This is an administration that has been elected twice on a sad truth about democracy--that you can fool enough of the people, enough of the time to get away with just about anything!

What is the biggest agenda item Bush hasn't been able to accomplish? Social Security "reform," (a k a dismantling). What can't be achieved by the political process might be achieved by other, less direct means--like by pulling the financial plug? Remember the words of Grover Norquist (credited as one of the architects of the Bush tax cut): "I want to reduce government to the size where I can take to the bathroom and drown it in the bathtub." The real way to ultimately reduce government (i.e., undermine its infrastructure) is to overextend it to the point that nothing else is financially possible. This is why the so-called squandering of the Clinton surplus by the tax cuts and the Iraq war are not necessarily blunders but quite possibly part of a well orchestrated strategy.

The current administration tried to make us believe that Social Security was bankrupt as of the day it stopped lending to the federal treasury and started asking to be repaid--as it was designed to do to cover the baby boom bubble. Congress and the public didn't buy it, but it's interesting to note that the first ten years of the Bush tax cuts will have sucked up just about all of the excess dollars lent by labor to the treasury via the payroll tax. Since we are now approaching the time when Social Security will be asking for its loans to the US Treasury to be repaid, extending those tax cuts will eliminate most of the revenue needed to repay the debt to Social Security. But that's probably not enough to gut the system. The only way to really kill it graveyard dead is another crisis to put the treasury so far under that no fiscal solution can ever allow it to make good on its multitrillion-dollar debt to the system. The biggest problem is that "reform" will be too easy. A sufficient increase to the payroll tax, a decrease to the retirement age and a cut in benefits, and not a dime of all the "contributions" by labor over the last quarter-century will ever come due for repayment--in effect, a permanent transfer of wealth from labor to the wealthiest federal income taxpayers for no consideration.

There's no denying there's a financial crisis that needs to be dealt with immediately. But the bluff needs to be called. The suggestion is, that whether the solution is acquisition of equity in financial institutions or acquiring tainted mortgage portfolios, the assets acquired be at no less than fair-market value and be transferred to the Social Security Administration to be managed, in a fiduciary capacity, for the long term benefit of the system (and not dumping at steep discounts a la RTC and FDIC).

The plus for the Social Security system is that for once it has real assets that can potentially yield far more than treasury interest rates and most importantly can't ever be "reformed" away. The plus for the treasury is that it actually will incur no new debt. The assets acquired will be transferred to the Social Security Administration in satisfaction of existing trust fund obligations. This is a real solution to two big problems. The only challenge is the pricing. This should be bipartisan heaven!

John Cote

Wickenburg, AZ

One has to begin by nationalizing the Federal Reserve. Unless this is done, the US will continue to experience periodic episodes of financial meltdowns of one form or another. This isn't to say that there won't be other swindles or insider or short-selling rackets, but it takes away the profit motive for the Federal Reserve to inflate and then crash markets. When house prices were spiraling higher and higher, Greenspan, the Federal Reserve chairman, was frequently interviewed and let everyone know that it was his hand that was enriching America. Where is the chairman of the Federal Reserve, Bernanke, now? Almost invisible--and only too happy that the role of the Federal Reserve is quietly being ignored.

Only with these conditions, and some others, should the federal government be willing to take ownership--temporarily--of the rotten financial assets that are dragging down funds, banks and brokerages.

Peter Lewycky

Toronto, Canada

Lack of trust. Fear. Panic. Because Wall Street leaders, captains and warriors (as they style themselves), are afraid of what they have done. And we are supposed to entrust $700 billion, with no oversight and no contract, to these people who will not trust each other?

With $700B we could completely pay the damages of thirty-two Hurricane Ikes at $22B each. Create 700,000 doctors at $1M. Outright build and give away 2.8 million modest homes. Provide free four-year college tuition for 7 million people.

Or we could issue 700 billion pieces of scrip to devalue the dollar, jack up our cost of oil against other currencies and provide ten mansions in the Hamptons.

We can invest in education, infrastructure and our future, or be the mugu of the world's largest 419 scam.

Doug Lowing

Amherst, MA

While I agree that "We the People" should express our outrage to Washington, to think that our leaders will find a way out of this mess is a pipe dream. The politicians and bureaucrats can't manage anything, and they will find a way to make this situation worse too.

I pity the folks that are retiring next week or next month that have 401(k)s. At least they will receive a pittance from Social Security that won't come anywhere near what they contributed over the years. It won't be there for me if and when I get to retirement age, because the pols have already looted it.

I guess I will just keep working and grinning like a fool as we continue to get screwed.

John Terry Kingery

Brandon, FL

I have written this same letter hundreds of times with no answers. I hope someone with a more powerful voice than mine will read this and spread it around. This whole "financial crisis" is a bunch of crap. If you really have a grasp of finances then you already know this. There is an easy fix that is not a fast one like the current administration wants. There is no need for one. I know you are thinking right now that I am crazy, but hear me out. I have a five-part solution that helps everyone without killing our economy and will reduce our debt by 75 percent in fifteen years if done right.

First is the so-called "financial crisis." I don't know what kind of crap they are trying to pull. Oh, just so you know: I am 33, married with two kids, and make $40,000 a year, so no, I am not a McCain clone. I almost lost my house last year and got blessed with a new job, and I am still trying to catch up.

We need to not give any of this money to the financial institutions directly. Not a dime, instead we need to help to those people who are currently in default on their loans that are in, are approaching foreclosure or have already been foreclosed, due to direct impact of predatory loans. If they just don't pay their payments 'cause they refuse to work, then screw' em. Bring their loan up to date. What this will do is keep hundreds of thousands of people from losing a home and eliminate the so-called "trash paper" crap mortgages our brilliant Secretary of the Treasury called them, by mandating that if the company accepts this money, then they are obligated to re-term the loan of the customer to a thirty-year fixed-rate loan at today's rates. This will put a real steady capital flow into these companies over thirty years that will be stable if they comply. This will also give a family a chance to budget and a way to possibly start saving and investing again creating more capital. This is a lot less expensive than the stuff they want now. All this equals a market security that people can trust.

douglas briand

Lake Wales, FL

Oh let me count the ways I love thee, Bailout!
How loverly your eyes, the future beckons.
I wagered in Vegas, I went broke,
I cheated everyone, including the house,
now the City of Vegas is bailing me out,
I'm running straight back to the tables!
Oh what a scam
oh what a nation of sheeples.

Vote WHITE-VAN AUKEN for revolutionary change

michael roloff

www.roloff.freehosting.net
Seattle, WA

I hope that readers will contact their Congressional representatives and senators to voice their opinions on this bailout. I have been sending mine comments like the ones below. We have one shot at getting this one right so that the financial system can be stabilized such that the economy doesn't take a big hit. While we don't need revenge on the people who made this mess, they need to be put in a position where they do not profit significantly from it.

"The taxpayers will be taking over the role of liquidity provider in the markets through the RTC-style entity that is likely to emerge from this weekend's negotiations. It is clear that a combination of incompetence and hubris have allowed poor quality assets to be multiplied many times through leverage. Wall Street has proven to be unfit to self-regulate. The Wall Street executives need to have adults in the room with them to prevent them from acting like reckless teenagers.

"The taxpayers will need to pay sufficient money for these assets so that the bailed-out companies will have sufficient liquid capital to survive and grow. The price will likely need to be substantially higher than Merrill Lynch's asset fire sale price of 22 cents on the dollar. In effect, the taxpayer will have become an investor in the firms. This should be recognized by providing the new RTC with shares in the companies that dump their illiquid assets commensurate with the amount of capital provided in addition to the transfer of the illiquid assets. This dilution of the investors' holdings should serve as a warning to future generations that there is no free lunch while reducing the risk to taxpayers.

"Similarly, much of the problem was caused by executives being rewarded for short-term results with little penalty for long-term failure. Companies that participate in the bailout should agree to executive compensation and severance packages that are based on financial results over a number of years, say 5 or 6 years. Rolling averages of financial results over two or more years could be used as the basis for determining the bonus amounts with payouts vested over several more years requiring continuing adequate financial success to collect the full amount. Good executives can still take home a fortune over time, but poor ones will not.

"Finally, regulation must be put in place to limit leverage across all of the types of entities that have been imploding. We now have hard data on what levels of leverage are acceptable and what are not."

Raymond D'Hollander

Fayetteville, NY

I am so relieved to see William Greider calling for people to stand up, speak out and call our government to account regarding the current economic bailouts. At the same time, I think he stops short in identifying the full ramifications of the government assumption of control of our economy. His recommendation of what needs to be done doesn't address the political threat we face. This threat has been named fascism in the undercurrents leading up to this crisis. First there was Aaron Russo's film Freedom to Fascism, then there is Naomi Wolf's book The End of America: Letter of Warning to a Young Patriot. Both Russo and Wolf reveal signs that our nation is heading down the path to Fascism. I personally prefer to call it collective corporatism rather than Fascism, yet, I recently picked up The Struggle Against Fascism in Germany, by Leon Trotsky, just to see if these two alarmists were accurate. I was further alarmed to find in the introduction to this book that it is universally agreed by researchers of this era that if the middle class had resisted the government takeover of the German economy during the economic crash that occurred in 1930 Germany, the rise of fascism would have been diffused.

Greider is right, We the People must raise our voices in outrage. We must demand that our government hold to the ideals of accountability and consequences. We the People are not responsible for Wall Street's debacle. At the same time, Greider is ignoring the reality that opening the door to government control of the economy is opening the door to authoritarian government. No, thank you. Greider is right to call for stipulations and regulations. We also need to demand decentralization of the money power. This crisis is an opportunity to return to a monetary system that more closely resembles the constitutional mandate. That is a monetary system that gives states oversight of currency creation. Decentralized currency creation would diversify enterprise development. Decentralization would diffuse the authoritarian path our nation is on.

Mary T. Ficalora

Avail Press
Agoura Hills, CA

The present financial crisis exposes the corrupt practices of the international credit-rating agencies, which directly contributed to the both the global meltdown and now the US taxpayer-funded bail out. This might have been prevented, had the SEC acted on the request in 2005 by the Chairman of the Joint Economic Committee of the United States Congress to investigate the wrongful practices of the rating agencies. The SEC again failed to act in early 2007. In the face of the enforcement failure by the SEC and the global spread of the credit markets contagion, the European Union has acknowledged a responsibility to impose some degree of supervision over the unregulated activities of the credit rating agencies.

William Terrence

New York, NY

This is one of times that will define us as a civilization. This is the time for the president, senators McCain and Obama, speaker Pelosi and majority leader Reid to show some real leadership. To show that they deserve the trust that has been given to them. We need them to pull their allies together in an effort to pass the bailout plan that is best for all Americans--on both Wall Street and Main Street. No amendments to help a specific party. No tactics to force one candidate or another into a corner. No earmarks to help a specific representative with re-election. This is the time for good, honest negotiations. What do you think? Are they up for it?

Mark Kern

according2mark.com
Winchester, KS

I just saw a Paulson interview. There are no controls on this bailout. It leaves Paulson in total and complete control of the flow of monies wIthout any accounting. He also said things that scared the living beejesus out of me, like, "We must do this now right away." He sounded like a used car sales salesman. You got to buy this now. There are three old ladies and the man down the street who want this. This beauty is going to be gone tomorrow. He sounds like he is taking advantage of an economic crises to increase the power of the fed. I don't think this guy knows crap.

JAMES PINETTE

Caribou, ME

If this were $7 million it'd still be a scandal, paying pork to huge corporations and getting nothing in return. But we're talking $700 billion! What could we get instead?

Here's one thing: We could hand out a housing voucher for $12,000 to every home-owning (35 million) and every renting (25 million) family in the US with income under $50,000! That's how much $700 billion is! Would that help? (Or $17,500 to every home-owning and renting family with income under $35,000.) And since every family wouldn't need it, there'd be even more to go around.

Could a bottom-up solution work better than top-down?

Also, note that Nader has made similar points: "For Chrysler, the government received stock warrants, so when the company recovered, government made a $400 million profit. What happens today is people bow to what big business asks for without conditions whatsoever. He's [Nader's] opposed to unconditional bailouts like this one," according to a spokesperson, in "Nader, Barr & Paul: 'Told you so.' "

Bill Fenwick

New York, NY

The bailout is just another example--and what a fantastic one!--of corporate America's raid on the public coffers under this administration. To tell the average American he will be negatively affected if the bailout does not take place is hogwash. The average American whose paycheck bleeds money every week to the Fed--and who can't feed his family--has no investment in Wall Street. His investment is in the Fed, and that investment is going to be turned over to to Wall Street on a silver platter. The average American has nothing to lose by letting these thieves bite it. Nothing at all. The bailout is his loss and their gain. Wake up, America-- Paulsen is a frat boy!

Cathy Gontar

New Orleans, LA

Dean Marshall's letter [below] totally misunderstands the "corporatism" referred to by Mussolini. His regime never met a modern corporation, but only family and partnership setupos.

Corporatism, in fact, was a means by which the regime contgrolled companies, unions and all economic life. In the Nazi-Fascist model, very unlike the US, there were no independent firms for the political authorities to have to deal with.

The projected idea of a system in which the big corporations pressure the compliant government is actually the direct opposite of what the Fascists and Nazis practiced.

John D. Froelich

Upper Darby, PA

Mr. Grieder writes: "If Wall Street is allowed to get away with this..." Like the super-hurricanes and other natural disasters we will inherit due to our selfish habits of consumption, it is not a question of "if" but "when."

John Giarratana

Jersey City, NJ

It is not the government's job to do direct investments. That job belongs to the private sector.

Yet the government is investing in (bailing out) some old Wall Street companies that

a. have developed some complex new virtual products (complex derivatives) which have been soundly proven to be without merit,

b. have duped shareholders and customers with false claims about the products,

c. have inflated the books,

d. have benefited the top executives, and made them wealthy beyond comprehension,

e. have either been corrupt or proved totally incompetent.

The common principles that private investment companies use to find investment targets are now being violated in spades.

It is as if someone has determined that the targets are the exact opposite of what investment principles dictate. No private investor will touch them. So the big government, which is supposedly run by the people and for the people, has taken a very big government step that overturns the entire philosophy of capitalism, and nationalizes the financial system of the country.

The government can now legitimately claim that it is responsible for the running of the banks, just as it runs the defense, the army, the police and the fire departments.

Jay Banerjee

Nashua, NH

We are witnessing a national tragedy. While I hardly want to witness a Great Depression-style economic collapse in my lifetime, it may be the only way to encourage Americans to shed the partisanship and wipe the slate clean in Washington. We are so attached to the 24/7 sound bites of news that we cannot see two feet in front of our noses, and we sure as heck can't think for ourselves and the common good. The Beltway boys and girls have really done a sinful job over the last few decades to make sure that we made it to this point--that we could be more obsessed with which political persuasion is scoring the most points on a given day than with the actual truths needing to be sought in a time in our nation where the stakes could not be higher.

The true patriots have been watching these last few years unfold, and worrying greatly about our future; not only for own well-being, but our nation as a whole. We are the Democrats and Republicans and the in-between-ers who are armed with a vote and a voice and exercise them, yet we are defeated in knowing that it will be extremely cynical voters that carry the day and they will cast votes for the worst of two evils. It is those whom Washington favors to continue subverting the real issues of the day to carry on the power struggle and keep our tradition of forward thinking as blurry as ever.

Perhaps the only way to preserve America is to let her suffer a great failure. Washington is corrupted by elitism and egotism. Watching the walls of impunity melt away around them could be the last best hope for this nation.

Robert Weisenburn

Garner, NC

The bailout is ridiculous, and not needed, and only taxes future generations. (And both candidates want to increase govt spending?) NESARA as drafted by Dr. Barnard is the only way out of our fiscal and monetary mess. Force balanced budget, abolish income and capital taxes in favor of 14 percent sales tax on everything else except rents, groceries, insurance and medical services; new monetary tools to ensure 0 percent inflation; abolish compound interest on secured loans in favor of simple monetization fee, and require principals be paid before before banks are allowed to collect on the monetization fee. No payment no matter how small will always reduce a debt to zero, banks more willing to prevent foreclosures and will turn around funds for more loans sooner. No more of this pay for 2.5 houses just to own 1. Pay for just 1.5 and be done with it in seventeen years. NESARA (not the hoax, but Dr. Barnard's original version). Google the NESARA Institute.

Ryan Freedom

Denver, CO

Over a year ago, the investment bankers and government officials who "regulated" them saw this coming.

They deliberately decided to do nothing. They knew if things got bad enough, panic would set in and they could bamboozle the public into accepting the entire burden of their debt.

Once again, "Disaster Capitalism" worked its way. Just as the dropping of the Twin Towers resulted in a heinous war, the concentration of power in an all-powerful executive and the gratuitous abrogation of civil liberties, so the dropping of the "twin towers" of Lehman and FMFM has resulted in the shameless appropriation of public wealth by private greed.

These two conflagrations are the bookends of the Bush administration. One cannot help but wonder if both were deliberate.

Rey Buono
Overseas Americans Against American Agression Overseas

Jomtien, Thailand

While I understand the horrible effects of not having a bailout, in the long run this seems the best option. The country seems bent on allowing corporations to own the government and avoid effective oversight and regulation. The only way that this can work out as the Republicans assert it should is if dishonest companies like those we are contemplating bailing out are allowed to fail.

If we do bail these scum out of their cesspools, then at the same time we must institute very strong and limiting regulations on their actions in the future. Then we need two more critical measures; first, all stock in the company bailed out is immediately worthless, ownership going to the US taxpayers until the solvent company can be sold responsibly, and all senior management is fired without any compensation. Second, all campaign contributions from the bailed-out company to any politician, PAC or political party over the last twenty years must immediately be tripled and the money given by the recipient to the US treasury.

As things stand, people who tried to rip us off are about to be saved by people who allowed them to try to rip us off. This is exactly why we need another party in this country--why a vote for a Den-o'rat or a Rapepublican is a vote against America and Democracy.

Carmi Turchick

Peterborough, Ontario, Canada

Excellent article. Now, Mr. Greider, please write a companion piece which is a brief but telling history of the scandals since the savings and loan bailout. Then turn that piece into a book.

James Mayhall

Lakeland , FL

I don't understand one thing. Isn't the real problem that businessmen can usually count on bailouts if their businesses are big enough? That is why the S&L bailout was such a tremendous mistake. So now we have the very worst outcome: a "market" that does not reflect real risks. Greider's "solution" is no solution at all. He thinks government, which can (obviously) be manipulated by business, is now to have more direct control over markets.

Yes, he's right that Paulson's "solution" is no solution, but neither is his own.

And let's not suppose that the American public is an innocent bystander. After all, this public took advantage of a manipulated market in a perfectly rational way, assuming that the risks would be covered.

Wouldn't it be better if bailouts were ended once and for all, rather than creating ever-larger institutions that would protect sleazy business practices?

Sam Schwartz

Chicago, IL

William Hague [below] comments: "The federal government should go to the source of the current problems, which is the subprime mortgage contracts themselves. Like money that enters into a local market, there is a multiplier effect for this debt because it can be used 'like money' and formed into new assets for expanded borrowing and investment."

While correct that subprime mortgage contracts are, at this time, the most cost-effective instruments to address to get out of this mess, Hague is a step short on the source of the current problems. We must look further, to the source of the drastic rise in offering subprime loans that preceded the real estate market boom and subsequent bust. The true source involved a perfect storm of legislation and policy-making from both parties in sync with the natural instinct of corporations to profit from poor legislation and policy.

Subprime loans are by definition risky loans given to individuals or corporations that don't meet traditional lending risk guidelines. Republicans, calling it "compassionate conservatism" and seeing value in an "ownership society," pushed legislation and policy that subsidized and encouraged risk taking. Bush's friends on Capital Hill and Wall Street hold much blame. Democrats were only too glad to join in, as the individuals receiving subprime loans were mainly members of their constituencies--whether by race or credit score. Obama's friends at ACORN, Fannie and Freddie all hold much blame as well. When Republicans and Democrats agreed on policy, legislation got passed, Fannie and Freddie grew, and Wall Street was given financial incentives to make loans that in hindsight were ridiculous. No credit, no problem? No credit, yet no money down? No proof of income? We trust you...

Blame "greed" of corportations all you want; without the government-led push to make money easy for subprime borrowers, we would simply not be in this mess. Senators and Congressmen do not understand business better than those who have risen through Wall Street, and should never succumb to ego and the belief that they do. They should get out of the way.

Now, William Greider and I agree that this bailout is likely a swindle of historic proportions. From that point of agreement, however, I could not disagree more with Mr. Greider's further writing. As stated above, it is government that is the true source of the mess we are in now. Greider's solution (predictably, as a writer for The Nation), is more government. Much more government. Complete takeover of the whole financial system. He states:

"Let me be clear. The scandal is not that government is acting. The scandal is that government is not acting forcefully enough--using its ultimate emergency powers to take full control of the financial system and impose order on banks, firms and markets."

Commenter Dean Marshall expresses concern of fascism as corporatism: a merger of state and corporate power. What Greider suggests as a "solution" is much closer to fascism, a bullying takeover of one of the largest segments of the economy to "impose order." Hasn't history proven the foolishness of this ideology enough times for Mr. Greider?

I run two businesses. I know how to budget, how to plan long term and short term, how to read my monthly balance sheets, how to adjust to changes in the market. The day my government feels the need to use its "ultimate emergency powers to take full control" of the businesses I have built, to "impose order," is the day I set sail for a country that has not fallen to Hell on socialism's good intentions.

Joel Van Dahm

Tempe, AZ

Yes, we've been had. Taken. Bamboozled. This is a buyout plan, for the well-heeled Wall Street cronies of our dysfunctional "representative government," so they won't lose all their accumulated wealth after having shared so much of it with the Washington crowd, in support of their campaigns. If you do the math, there is no way "We the People" will ever be able to even pay down the principle debt in any of our lifetimes or those of our children. So stop all that drinking and start thinking.

I agree with much of Mr. Hague's comments [below], particularly with respect to rescuing the homeowner. With respect to saving the country, I suggest that, first, we must freeze all assets of the people who perpetrated this con, particularly those in decision-making positions. That would send a message that the actions that have brought this great nation to the point of near-collapse are tantamount to "economic terrorism" and will not be tolerated at home or from abroad (many of the players from the dot.com craze are now abroad, e.g., Dubai--where Bill Clinton had to divest $40m during his wife's primary run).

I also recommend nationalizing the energy sector, at least the major companies, because they owe us (the Exxon Valdez oil spill, price-gouging, global warming... and we still haven't seen the minutes from Cheney meeting with them at the beginning of this administration), but mainly because they hold such a sway over the American economy and because they are one of the few industries we have that is still turning a good profit. We need that profit right now, to start paying off this debt, and if that isn't a good enough reason, then think--if we take them over now, particulary, say, Haliburton, Dick Cheney's stocks will be worthless when he finally leaves in January. That should be worth a try anyway.

edith thomas

Jamaica, NY

This crisis is the product of mark-to-market accounting required by FASB and the SEC over the past fifteen years. If the subprime mortgage backed securities were valued based on their reasonably projected future cash flows, then the banks, insurance companies, Fannie/Freddie, etc. might have had 20 percent losses, but they would have been fine in the long term (see William M. Isaac's opinion page article in the September 19 Wall Street Journal). Instead, the regulators required institutions to value these securities at zero, because the markets for them temporarily dried up. In short, bad regulation based on incorrect theory--efficient markets, i.e., the market is always right--laid the groundwork that made the crisis possible.

Paulson ensured that a bigger bailout would be needed when the Fannie/Freddie bailout wiped out common and preferred shareholders. This meant that every owner of bank, insurance company or other financially oriented common stock of companies that might conceivably be bailed out by the feds in the future moved to sell their shares. When the dust settles, I'm betting that we'll see that the sale of common shares by owners, and not short sellers, is what drove down share prices. After all, short interest in the financial sector dropped by twenty percent between July and the end of August (according to the Wall Street Journal article). This means that short sellers were net buyers, not net sellers, of financial stocks over that period.

That the American taxpayer is going to be subject to paying for this is a crime. I only fear that we will substitute more regulation for what is needed, which is better regulation. Also, for once and for all, our idea of how economics works needs to be based on a behavioral model, rather than on the very dated and imperfect notion of efficient markets. Ideas have consequences.

Jim Scott

Fort Mill, SC

I agree that this bailout is nothing but a swindle and will transform our society by putting us into a Great Depression of morality. With all due respect to Secretary Paulson's august position and heavy responsibilities, he should go straight to Hades.

I'm not going to put a partisan spin on this. But I'm a thinking person, business lawyer, banker by upbringing where I've participated in making/reviewing thousands of loans and board service, I've served on a small insurance company board and I have represented more thousands of debtors and creditors.

What this bailout does, and I equally condemn all the fundraising--i.e., bribe-taking--Democrats and Republicans who took money from Fannie and Freddie (why where fannie and freddie allowed to contribute at all?), is to take the risk, and therefore the honor, out of the capitalist system. Why have I tried to run honest businesses and pay my bills for all these years, if you can bail out the dishonest loan-takers who lied on their applications, mortgage brokers who knew the applications were full of lies but passed them upstream, the bundlers thereafter and the securitized lenders upstream of that who both also knew of the fraud and were adherents of the "prices only go up" theory.

Has not the government now given a clear signal to all its citizens to cheat on their loan applications and taxes and to take financial advantage of their fellow citizens at every turn? The casino has been rigged; is not self-help the only option left to those who have played fair?

Paulson has turned every risk I have ever taken and profited by into a fool's errand. Paulson has made every mortgage and other loan payment I have ever made an act of a sucker. Paulson has given every citizen the incentive to wiggle out his just debts--because if all these others are getting off the hook, why shouldn't the rest of us?

Paulson has now corrupted the US (as the cowardly lion would have put it) from top to bottomus.

Although I certainly do mean to single out Paulson, he is not the only one. The US Congress is now equal to the French government between the great wars--a thoroughly corrupt and detestable bunch of soft thieves, whose many failures led straight to Adolf Hitler by default. I hope that Paulson's and Congress's equal lack of character doesn't lead to an equally horrible result.

Thank you, Secretary Paulson, for destroying the nation's moral underpinnings by rewarding the corrupt.

keevan d. morgan

Wilmette, IL

Let's, as a country, change policy from "too big to fail" to "too many to fail" and safeguard the "many" Americans from foreclosure and other financial perils.

Edward Vander Molen

Grand Rapids , MI

The truth is, way more than a swindle, this "mother of all bailouts" is literally a financial coup d'état of our entire captalist system. Naomi Klein's "shock doctrine" coming home to roost. And if history does indeed repeat itself, then Mussolini's statement that "the first stage of fascism should more appropriately be called corporatism, because it is the merger of state and corporate power" appears to sum it all up. Our democracy has been hijacked right under our noses by a cabal of financial elitists and politicians determined to preserve the wealth of the rich at the expense of the masses. Patriotic Americans need to rise up and bring about regime change and use our Declaration of Independence as the rallying flag once again.

dean marshall

Richmond, CA

The Bush government financial rescue plan will, in real terms, prove to be at least three times the size of the Swedish bailout of banks in the early '90s. The cost to the Swedes was 4 percent of GDP, causing four to ten years of pain for most people, depending on how pain was reckoned.

The majority of people in the US--where the 'assets" they're buying are "worth" far, far less than what the Swedes had to buy--can look forward to suffering for fifteen to twenty years.

Don't look to any politicians to ameliorate that pain by much. But do expect dissent to be swiftly, brutally, expeditiously crushed.

Yes, kiss goodbye to universal health care insurance, pre-school programs, environmental protection.

But be prepared to embrace yet more war, as only the US military budget--larger than all the rest of the world's arms budgets combined--will be experiencing growth ...

...unless you consider growth in unemployment, foreclosures, infant mortality rates, homelessness, worth reckoning as growth.

R.H. Weber

Geneva, Switzerland

I wish I had read this article before I wrote my elected representatives. I merely suggested no bail out without regulation. Also, since AIG was too big to fail, I suggested selling off its profitable subsidiaries individually, in order to disperse the risk among many companies that would not be too big to fail. Expanding on that thought, it occurred to me that anti-trust action be taken against any holding company that is too big to fail. It takes only a few idiots to destroy a large holding company and the market!

Pervis James Casey

Riverside, CA

The Federal Reserve, a private corporation, owned by the member banks, has enabled and encouraged the financial mess we are now facing. Through massive leveraged debt plowed into dubious financial instruments called derivatives, the financial behemoths have led our whole economy into a minefield of economic destruction. The explosions are just starting.

It is time, past time to establish a truly public, central bank. As Greider says, we must take on the whole mess, but why should we borrow money from the Federal Reserve to clean up the monster they spawned ? We need a public central bank that creates money without debt--and what most Americans have been shielded from is that it is our birthright under the Constitution.

For an excellent take on all this, see "It's the Derivatives, Stupid! Why Fannie, Freddie, AIG had to be Bailed Out," by Ellen Brown.

Michael McKinlay

Hercules, CA

The federal government should go to the source of the current problems, which is the sub-prime mortgage contracts themselves. Like money that enters into a local market, there is a multiplier effect for this debt because it can be used "like money" and formed into new assets for expanded borrowing and investment. These mortgage contracts, which are the basis for expanded investments, should be made solid and viable and the expanded investments emanating from them will take care of themselves. This is the least expensive way to guarantee solving the panic caused by the bad mortgages. Solve the problem at its basis prior to the multiplier effect and not at its furthest reaches, where the costs would be seemingly unending and not inspire confidence.

This problem has caused the credit markets to shut down and has abruptly halted the construction, real estate and related industries. Inventories of homes are growing, which causes a downward spiral of home prices and several rounds of devaluation of assets held on the books by financial companies. Intervention is needed now by the government to stop this spiral of deflation. The important point is that it must be done at the point of the original mortgage contract. The government must segregate and guarantee these contracts and make them whole or auction them off. Most mortgages are front-end loaded with interest and the mortgage borrower pays back several times the principal in interest. Therefore, there is a lot of room for innovation and compromise. For example, you could remove the front-end load and amortize the interest over the following twenty years in order to give incentive to the borrower to stay with the mortgage. It would be attractive to the borrower who owes more than the home is worth if they could pay down a substantial amount of principal quickly and get the loan above water.

Segregating the loans while you guarantee them and fix them enables the credit market's traffic to flow again, increases home sales and stock prices, helps halt the deflation and reverses several problems that are currently occurring. Financial corporations will argue for a larger bailout because their earnings may be impacted, but this is not the taxpayer's problem. In fact, they have already incurred large fees for being careless in their mortgage business and risk management and deserve some losses. Let the financial companies guarantee their subsequent investment vehicles, as the government is doing its part in solving their liquidity problem. If this bail-out is done correctly, it will lessen the exposure of the AIG insurance venture, which is also being bailed out by the government.

The fiscal policies of this ideological administration, which have been managed for the benefit of less than 1 percent of the population and fostered these problems, must end. The fact that it is this current administration that is originating the bailout makes one expect that they will want taxpayers to guarantee all of the bad ensuing investments that they originated, based on these mortgages, under this "no oversight" administration. This will prompt seemingly endless payments to be made outside of the USA to an unknown amount of investors and overwhelm the government. The government plan must not take care of financial investors and financial companies at the expense of the people. Our government needs to be the overseer that manages the fiscal policy of the country for the general welfare of all its people and keeps the money at home. Any other actions to the contrary should be considered racketeering.

William J. Hague

Hoboken, NJ