I watched the Bill Moyers Journal the other night and they interviewed Joe Nocera. He writes a business column for the New Your Times and is a regular contributor to NPR’s “Weekend Edition”. He had a lot to say about how the Secretary of the Treasury has handled the current financial crisis.

 

I think the nicest thing I heard was that Secretary Paulson came from a background of “investment banking” (read as unbriddled greed) and Nocera compared his plan to one forwarded recently by Sheila Bair. She is the head of the FDIC and a Bush appointee so I would think her opinions are not politically motivated. More importantly however , according to Nocera she has a background as a bank “regulator”. Someone who evaluates whether banking practices are ethically, legally and financially sound. (Apparently this is position that has gone unfilled since she left judging from the current state of affiars with our economy.)

 

I digress… She has come up with a plan to use part of the bailout money to guarantee the “toxic loans” that are a root cause of the problem, if banks and lending institutions make efforts to re-negotiate the loans down to where payments are less than 33% of the payor’s income. This is basic home financing math that was discarded in the sub prime feeding frenzy and lead to the chaos we are seeing now.

 

As I watch the large corporations like AIG and now the big three car companies come forward asking for handouts and see Henry Paulson writing checks on OUR bank account it is obvious that his concept of the american economy that needs saving is the stock market, his old home turf.

 

We seem to be moving into an era of corporate socialism. While socialism is always railed against by the Republicans it seems apparent that it is acceptable in soe cases. Maybe they don’t like the idea of the government supporting the citizens with handouts but seemingly supporting overpaid executives, corporate jets, expensive “business retreats” and large corporations that make bad business decisions is acceptable.

 

She seems to think we should require banks and lending institutions to do some of the work and pay some of the costs associated with fixing the bad investments they made in the hope of big returns.