Earlier today I wrote that the republicans want to (1) rebuke President Bush publicly and (2) gut Obama's "Protect the Taxpayers and Homeowners" provision. Well, it looks like it's worse than that.
According to CNNMoney.com the republicans are proposing an Economic Rescue Principles plan that, incredibly enough, removes "regulatory and tax barriers that are currently blocking private capital formation." Put another way, they want tax breaks and more deregulation. You can read their proposal here.
I don't know if anyone has told these guys, but tax breaks for the rich and deregulation are what got us into this mess. What's really blocking private capital formation is fear ... fear of each other's stupidity eating into their profits. This is why banks and financial institutions are not lending to each other - in spite of hundreds of billions in FED-laced loans & credit.
Still, to get this arrangement republicans are offering to have the private sector pay an insurance premium to make sure their mortgage backed securities (MBS) will pay off. How nice of them.
Here's the problem. The proposal has the federal government insuring about half of the MBS market, with the private sector insuring the other half.
Gee, I wonder which half the government gets to insure?
In essence, the republican proposal says to the taxpayer, "You guys stabilize the markets (for $350 billion), and make sure they work, and we'll step in and throw a capitalist party ... as long as you give us some more deregulation and tax breaks."
These guys not only want to rebuke Bush, and eviscerate Obama's proposal, but they want to start the game all over.
These guys are idiots. And they're banking on America being full of a bunch of idiots too ... as is John McCain.
- Mark
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