As the details of the massive $700 billion bank bailout becomes clearer, the banks are putting on a high powered lobbying effort to secure the best possible terms on the deal. According to hte WSJ, this lobbying includes:
1, Expanding the bailout to foreign banks that have a large US exposure.
2. Changing the way the distressed assets are accounted for to make them more valuable to the banks, forcing the goverment to buy them for more money.
3. Eliminating any breaks for consumers.
This should be an unconditional surrender. The government should tell the banks, "these are the terms, take them or leave them." I don't think the banks realize that the rules of the game have changed and they are no longer calling the shots. It was, after all the banks who lobbied against any reform of Fannie and Freddie (look where that got us), the repeal of the Glass-Steagall act, the change in bankruptcy law which hurts consumers as well as the banks, etc.
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Related Articles:
Ron Paul's View of the Paulson Bailout Plan by Sam Cass - Sep 23, 2008
Hundreds of Economists Including 3 Nobel Winners Urge Congress Not to Rush on Bailout Plan by Sam Cass - Sep 25, 2008.
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