Barry Eichengreen

Re: Glass-Steagall repeal
"unintended consequences" my foot! There was a tremendous amount of lobbying going on for this http://www.publicradio.org/columns/marketplace/farrell/2008/09/economist_james_hamilton.html#2689086repeal by the financial community. They saw the potential for a big money grab and they got it. Glass-Steagall was put in place precisely to curb unbridled meddling between finance and insurance and curb the activities that pure greed brings on. Politicians thinking only of re-election and ignoring risk to the public went right along for the money making ride to come.
There should be NO federal (tax payer) bail out. They sliced and diced these "products" to create these securities. They can "un-slice" and "un-dice" the same way and package mortgage securities containing reliable credit risk. It will be painful and some companies will go under. Lots of people will go crashing down under the weight of their debt. It will be a very rough couple of years while government, business and individuals learn to live within their means.
To regain that important trust there must be complete transparency of how businesses operate. That means no "off books" deals or murky disclosures of deals. Tax loopholes rewarding companies who offshore work should be closed. Executive pay should be clearly spelled out including "golden handshakes" and perks right down to how much the company pays for golf memberships and dry cleaning. Shareholders need to know how much the company spends on pampered egos that run companies into the ground.
We need a President and alert citizens who will hold the Congress' collective feet to the fire. Start by cutting off all earmarks until the budget is balanced. Yes, earmarks don't take a large amount of the budget but their impact locally is enormous. Require paying government obligations and bills first and divvying up the goodies later. This will force politicians to do their jobs in order to get back in the good graces of the voter.
I believe in a free market. Subsidies have no place in a free market. It is nothing but corporate welfare. Start cutting all subsidies by 20% per year until they are gone. No exceptions.
Review all human services welfare programs. No able bodied person should be receiving welfare. Give them commodities or limited food stamps and an incentive to find a job. The free ride is over. There are plenty of jobs available and yes many only pay minimum wage but lets be honest, most people collecting the dole are not even worth that so employers are taking a risk and incurring training costs to employing them in the first place. If they are as smart as they think they are it won't take them long to move up. It is called "opportunity".
I, like many of my neighbors, have worked hard for my money. I live in a nice home,have always paid my bills, have saved for retirement and have always lived with in my means. I am mad as hell that a bunch of high rollers now expect me to bail them out. It does not take a degree in economics to know that this house of cards was doomed to fall and the excuses I am hearing from Paulson, Greenspan, Bush et al are unacceptable. If we have a free market let it work.
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