Paulson And Your Money - $700 Billion On The Line

Now that the $700+ Billion economic recovery bill has passed, it's time to implement.  The first thing for us all to remember is that this is your money.  You want this program handled properly with appropriate oversights and judicious management; in other words, don't pay too much for the junk mortgages or bank stocks and don't let the rescued executives walk away with any of the funds.

If not managed properly, this could end up being another government sponsored boondoggle with you, the taxpayer, left holding the bill.  I trust Paulson to do the right thing, but after the new president is innaugurated, he'll likely make his own choice for Treasury Secretary.  Who knows what philosophy his successor will have.

We also need some drastic revisions to financial and banking regulations, corporate executive compensation structures and the corporate tax code.  I hate to be so direct about it, but now is the time to force these modifications through, while the gods of Wall Street and corporate America are still on their knees begging for mercy.  If we wait until the market is back, their wallets fat with cash, and their egos fully restored, we'll meet nothing but resistance.

Now, I'm a diehard capitalist and have no problem with people earning a good salary for the work they perform.  But, I don't agree wholeheartedly with the Gordon Gekko character played by Michael Douglas in the 90's movie Wallstreet , who said, "Greed, for lack of a better word, is good!!!"

Financial performance incentives are conceptually a good idea, but wrong-headed incentives have been in place in corporate America for too long and they are partially to blame for the mess we're in.

Here are some things that must happen (I've thrown in a few additional ideas for good measure):

• Executive compensation needs to be revamped.  Evaluate stock option incentives and curtail, restructure or eliminate them.  Granting millions in options based on profitability has encouraged many CEO's to "cook the books"!  All during the last 20 - 30 years many executives have received large bonuses during down years and Golden Parachutes approaching the GDP of a small nation when they get fired for poor performance or are bought out.  Without getting government in the middle, we need to figure out an equitable structure for reasonable executive compensation.  A totally "free market" approach doesn't seem to work.
• Insist that the Treasury have voting rights in any companies where taxpayer money is being used to rescue them.  Otherwise, the executives in charge may continue making the same silly decisions they've made in the past.  We need to insure that our investment in these companies pays off.
• New rules must be put in place to regulate the exotic investment vehicles that have been created in the past couple of decades.  In many cases we have no records whatsoever showing how many of these securities are out there, and hence, what the total risk exposure is.  There should be trading and ownerhip records on all forms of securities.
• Corporate tax codes must be revised to incent job creation within this country.  Any tax incentives to move jobs off-shore should be eliminated totally.  Any tax incentives that do anything other than strengthen both corporations and our country at the same time should be revised.
• Tax subsidies to the oil industry need to be eliminated and given to alternative energy programs so we can greatly accelerate our move off of foreign oil.

Now is the time to start communicating with your Congressional representative and inform them how YOU feel about this and that you'll be watching and supporting their progress. 

If we do nothing, Congress may very well move on to the next crisis once the election is over and let the chance for real, positive change for our country fall into the black, swirling depths of indecision we call Washington D. C.

Go to MORELINX in the left sidebar to connect with your Congress person.