Carney argues that the bailout must include more regulation, federal oversight, insurance against executive compensation, and protection for homeowners. Said Carney, “Most of us are not inclined to give a blank check to (Treasury Secretary Henry) Paulson on his word of ‘Trust me’.”
Hackett was also skeptical that the bailout could end the financial crisis on its own, but made reference to the budgetary implications by stating that “some types of actions would make our long-term economic outlook much worse, and should be rejected."
The 5 Hackett Principles for any bailout package
Guarantees that if these bailouts are successful, any taxpayer cost would be offset by returns that return to taxpayers rather than company executives and shareholders;
Reform of government policies that contributed to the financial meltdown, including terminating Fannie Mae and Freddie Mac’s status as Government Sponsored Enterprises, to prevent the kinds of high-risk mortgages that led to the current crisis.
Structure multiple entities (a minimum of five) to compete for the purchase of troubled assets, limited to residential home mortgages. Rather than Treasury Department control, have an independent board of directors who report quarterly to Congress on progress and results.
Do not allow the current crisis to be used as an excuse to push additional special-interest corporate bailouts that have no comparable systemic economic implications, such as the $25 billion being requested by the auto industry.
Reduce tax burdens on investments and real estate to attract new private capital to U.S. markets, thereby relieving the pressure to call upon taxpayers to provide public capital.
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