Senator Chris Dodd made an interesting proposal this afternoon, and on thinking further it seems to be one of the most reasonable and practical suggestions that we've heard during this crisis.
The Senator proposed that whatever givebacks, restrictions, haircuts, penalties, oversight, pay cuts and equity arrangements that are written into the bridge loans and funds to the automakers be applied in principle to all recipients of Federal bailout money including the Wall Street banks, and financials institutions like AIG and GE. This would include requiring written proposals for the restructuring and the use of this money and the adoption of a set of business reforms of the financial industry without exception.
This should include any funds provided by the Federal Reserve and Treasury. The Fed does not have any independent funds, all of them being provided and sustained by the US taxpayers through their debt and tax obligations. Oversight for this program would be conducted by an independent board set up by the GAO, and not the Fed or Treasury to avoid a conflict of interest.
It is a superb idea, and deserves the support of other Senators and congressmen.
We suggest that you write to your Senators about this today and express your support for a more even treatment of all businesses and people including the Wall Street banks. We sent the above wording to ours. Whatever is done must be fair and equitable.
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