Given what is going on in the financial world, it would seem inappropriate not to comment on it, as there can be no doubt that we will all be effected what ever the outcome of all these debates and discussions will be. So, for what it is worth, here are my thoughts on the bailout, which I believe is necessary, but should only be passed with certain conditions attached. These are below:
1 - Tax payer equity ownership in the companies bailed out. Ie, we all become stock owners in the companies that are rescued under the plan. This to me is basic free market common sense investing, as it means that we will all benefit over the coming 5 - 15 years as these companies recover and prosper.
2 - Independent regulation and oversight. As has been seen time and again, the idea of any industry "self regulating" is ludicrous, because they simply don't do it. So, independent, bi-partisan regulation group, here we come.
3 - Golden parachute / income caps. Obviously those senior execs departing the company should not be allowed to walk away with million dollar severance packages. However, we do need to reward the incoming execs in such a way as to make them work as hard as possible to make our new companies (provided #1 has occurred) profitable. To me this looks like reasonable salaries plus highly lucrative deferred stock options - the kind they can't exercise for 5 plus years (I have no problem with someone earning $20 million if they have turned a bankrupt company into one generate billions a year... I just have a problem with the ones who bankrupted it earning that).
4 - Mortgage relief for homeowners. Some kind of system needs to be put in place to help people stay in their homes (such as lowering monthly payments, but extending the length of mortgages in default), as the trickle down effect of mass evictions / re-possessions cannot be calculated (plus, from the banks perspective, better to have some money coming in than a house sitting empty and unsold over the long term). However, I do not agree with extending this philosophy to regular consumer debt (cars, credit cards etc) - that's what debt plans are for.
So, like I say, my opinions for what they are worth. I would really welcome any comments / thoughts on this, as it is a topic that we will all be dealing with for a long time to come.
In the meantime, to your prosperity (sooner than later!)
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