I don’t know shit about economics. I can barely do math. I won’t claim I know exactly what caused the current financial crisis, who is responsible, or what needs to be done to fix it. I won’t even claim to have a clue about those things.
But I do know that the highly paid people who are making our laws and running our banks and financial institutions really fucked up this time. Even worse, they weren’t playing with their own money when they did it.
I also know what not to do, which is what our so-called leaders are doing right now. Both political parties are trying to claim credit and lay blame, even though there is little or none of the former and lots of the latter to go around. The are also trying to help themselves and their friends instead helping the rest of us like they get paid to do.
But that’s not what I want to talk about. There are enough people trying to explain the crisis and point fingers right now. Too many actually, and there is major disagreement between them, experts and laypeople alike.
If this crisis is real, and I believe it is, this is no time for partisanship or political posturing. We need both parties to do their patriotic duty and cooperate with each other for the good of the nation, just like in a time of war. But right now there doesn’t even seem to be a consensus as to what, exactly, the crisis is, let alone what, if anything, we should do about it.
Our so-called leaders not only got us in this mess, they have completely and utterly failed to convince the general public that the proposed bailout is a necessary or desirable solution. Worse yet, the people who are currently “leading” (Bush, Pelosi, Reid) have little or no credibility or public confidence.
So here’s my proposal, FWIW:
George W. Bush should appoint an bipartisan emergency commission, and put former President Bill Clinton in charge.
The Big Dawg is one of the few people in the country with the credibility, talent and expertise to do what needs to be done. Plus he’s available. I’m sure he would gladly serve if asked, especially as it would take him off the campaign trail where he obviously does not want to be right now.
The commission should include the leaders of both parties’ Congressional delegations (House and Senate) as well as the Secretary of the Treasury and the Attorney General (or high-ranking surrogates) and some top economists, including Paul Krugman and Nouriel Roubini. The commission needs to be relatively small to be efficient, but if there is anyone else whose participation is essential or useful they should also be included.
The commission should not include any of the people who are or were running Fannie Mae, Freddie Mac or anyone from Wall Street. Likewise, neither of the parties’ Presidential or Vice Presidential candidates should be directly involved. The commission members should disclose any current or past associations and/or financial ties (including donations) with any person or organization directly involved in this crisis, and if there is a conflict of interest a sustitute should be appointed to replace them.
The commission should immediately meet and continue to meet daily to complete the following objectives within the next week or as soon thereafter as reasonably possible:
1. Determine what the current crisis is, exactly, and the full extent of the problem. Until we define the problem we are wasting time discussing solutions. To do this they should hold hearings and may take testimony from current and former officers of Fannie Mae, Freddie Mac, Wall Street financial institutions, academic experts and anyone else with relevant information. These hearings should be public and televised on C-span as well as all the news channels if possible.
2. Take and discuss recommendations from experts as to how to resolve the crisis for the short term, meaning the next six months to a year. Some of the discussions will necessarily be private, as deals will have to be made, but as much as possible of the commission’s business should be done in public. Secrecy is the enemy of public trust and support.
3. Within a few days (no more than a week if possible) the commission should prepare a report that is relatively simple for any literate person to understand of their findings and their recommendations. The recommendations need to be specific and narrowly focused as to the minimum necessary actions needed to avert the immediate crisis and leave long-term relief for the next administration. proposals for long-term relief may be included but listed separately. The recommendations should include drafts of the proposed legislation to provide emergency relief.
The emergency proposal should reflect bipartisan agreement, and should be focused on fixing the most urgent problem(s), not assigning any blame. There should be no amnesty provisions that let anyone off the hook for their personal malfeasance or misdeeds, nor should there be any form of pork or largesse contained in the proposals. There should be no “pass it now, fix it later” bullshit we saw in the recently defeated bill in the proposed legislation. Alternative recommendations, if any, may be included in the report, but the purpose is to achieve consensus if not unanimous agreement as to a single proposed solution.
4. Hold a nationally televised public forum, led by former President Clinton, where the problem is explained and the proposed solution is presented to the American people. The former President should have the full commission seated behind him on the stage while he speaks, so that the public will understand that they concur. The audience should include the media, academic experts and business leaders, as well as the general public. At the end of the presentation, both the media and the other audience members will have an extended opportunity to ask questions of both former President Clinton and the panel.
The purpose of this conference to to explain the proposed solutions and to obtain widespread public support for them. The written text of the emergency report should be made available online either before or simultaneously with the conference, and questions could be submitted online. Members of the commission would then begin making individual and/or joint appearances on news programs and at public forums around the nation, to further answer questions and explain the proposals. A really nice touch would be for the commission members to raise their right hands and swear under penalty of perjury that they are telling the truth to the American people, but I won’t hold my breath.
5. Congress should then meet and stay in an emergency session to consider the proposals. If the commission has done its job, the leaders of both parties should have or quickly be able to get the necessary votes to pass the legislation, and public opinion should support them in doing so. Ideally, both parties will approve the bill unanimously by voice vote. If this bail-out is truly necessary, both parties should agree to share any blame or credit equally, and pledge they will not try to use the crisis for partsan advantage. If passed, the legislation will be sent to President Bush for his signature, which, once again, should be forthcoming if the commission has done it’s job.
Somewhere between the passage of the immediate relief and the threat of economic collapse next Spring or Summer, the same or a similar bipartisan commission should begin a thorough investigation of the causes of this crisis and to recommend long-term solutions to the economic problem we are facing. Ideally it would also be chaired by the Big Dawg, or perhaps co-chaired with former President George Herbert Walker Bush (father, not son.) There are some other respected “elder” statesmen in both parties that could or should be involved if they are willing and able, like Robert Dole, Al Gore, Jack Kemp and Jimmy Carter. The reason to have the commission led by retired politicians is to increase public trust in the commission’s findings and recommendations, since there are very few active politicians held in high regard by the general public.
The second commission should spend six months to a year on it’s objectives, and should provide both a detailed and summary report to Congress, the next administration, and the public of it’s final findings and recommendations.
These are some of the things both commissions should be looking at and addressing in their proposals:
1. New laws and regulations to prevent future problems.
Although some people are always advocating deregulation, they base their arguments on bad, unreasonable and/or ineffective regulations. We need smart, effective and resonable regulations that promote good business practices and deter criminal activity as well as the breach of fiduciary duty. In particular, sub-prime lending and predatory lending practices need to strictly monitored and regulated in the future.
2. Minimizing public risks and maximizing public benefits.
As I understand it, the root problem of the current crisis is that there are too many illiquid assets that are now worth far less than what is owed on them, and/or the assets are of undetermined value. Most of these assets are not completely worthless, and may substantially increase in assessed value in the future. The assets should be taken over by the government in exchange for liquid assets (the bail-out money.) A trustee corporation should be formed to manage the toxic assets with the goal, where possible, to eventually sell them at a profit, or at the minimum loss possible. Any profits from the sale of the assets should be applied to the national debt, and not diverted for any other purpose, however noble it may be. The bail-out should also be limited to those institutions and assets necessary to keep the market from collapsing, and not be used by Wall Street to dump bad investments that decrease profits but don’t threaten the financial institution’s survival. This should not be a government giveaway or “get out of jail free” opportunity.
3. Immediate relief from home forclosures of owner-occupied properties.
If we’re going to bail-out Joe Moneybags, we must help Joe Bagodonuts too. It’s especially galling to see CEO’s who run a business into the ground with bad decisions ride off into the sunset with millions of dollars after only a few months or years while hard-working average people get screwed out of their life-savings and retirements through no fault of their own because of an illness or job lay-off.
I would throw in something here about obscene executive compensation, outsourcing American jobs overseas, corrupt lobbying and campaign finance reform but why waste time on something that isn’t going to happen? I’m already way past “likely” and “possibly” and deep into “when pigs fly” territory.
Okay, that’s it.
If you like my proposal, feel free to show it to other people. If they like it, maybe others will too. and if enough people like it, maybe the people who are mismanaging our government will try part or all of it. If they do try part or all of it, and it works, I want only one thing in return.
I don’t want money or even recognition. I just want the Oakland Raiders to stop sucking and win a Super Bowl before I die.
That’s not too much to ask, is it?