US Senate Dems to float rival aid plan for financial system
"Senate Banking Committee Chairman Christopher Dodd, D-Conn., said Senate Democrats intend to unveil their own plan to shore up the U.S. financial industry, which will likely allow the U.S. Treasury to receive warrants on the stock of firms that off-load their toxic mortgage assets onto the government."
Which sounds much like a line from the earlier quoted Why Paulson is wrong paper by Professor Zingales:
"...debt is forgiven in exchange for some equity or some warrants."It's surely a case of Great Brains. On the other hand, this utterly fabulous (purportedly genuine) email from the keyboard of an anonymous Congressional Democrat might indicate the Mother of all Debates is coming:
"Paulsen [sic] and congressional Republicans, or the few that will actually vote for this (most will be unwilling to take responsibility for the consequences of their policies), have said that there can't be any "add ons," or addition provisions. Fuck that. I don't really want to trigger a world wide depression (that's not hyperbole, that's a distinct possibility), but I'm not voting for a blank check for $700 billion for those mother fuckers.
Nancy said she wanted to include the second "stimulus" package that the Bush Administration and congressional Republicans have blocked. I don't want to trade a $700 billion dollar giveaway to the most unsympathetic human beings on the planet for a few fucking bridges. I want reforms of the industry, and I want it to be as punitive as possible.
Henry Waxman has suggested corporate government reforms, including CEO compensation, as the price for this. Some members have publicly suggested allowing modification of mortgages in bankruptcy, and the House Judiciary Committee staff is also very interested in that. That's a real possibility.
We may strip out all the gives to industry in the predatory mortgage lending bill that the House passed last November, which hasn't budged in the Senate, and include that in the bill. There are other ideas on the table but they are going to be tough to work out before next week.
I also find myself drawn to provisions that would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling. That is now required of consumers filing bankruptcy to make sure they feel properly humiliated for being head over heels in debt, although most lost control of their finances because of a serious illness in the family. That would just be petty and childish, and completely in character for me.
I'm open to other ideas, and I am looking for volunteers who want to hold the sons of bitches so I can beat the crap out of them."