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Take time to do the bailout right

Posted: October 7, 2008 8:54 p.m.
Updated: December 9, 2008 5:00 a.m.

Isn't it interesting that regulation and oversight were fighting words for the investment houses, until they stopped making huge profits. Then, when the marketplace started working and their short-sighted risky business practices caught up with their bottom line, they want to be bailed out even before they straighten out their own shops!

What about the multi-million dollar bonuses and over-the-top compensation that has been paid out during the boom times? Should not they feel just a little bit of guilt for asking for a handout as they use their time to decide which mansion they should sleep in or which yacht to use over the weekend?

Of course, we cannot turn the clock backwards or make illegal what was previously legal, regardless of however onerous the practices were. But I think we should grade these individual businesses and let that grade be a factor for conditions of their taxpayer funded special benefits. And, if some of the individuals want to give back a portion of their windfall, that good faith action should not only be encouraged but would affect their grade.

Although there is little doubt that some kind of bailout is necessary, we need to focus on how the bailout money should be paid back. We should think of it as a loan which, in time, will be repaid and not as a one-time gift from future taxpayers. That may well mean that everybody in that food chain suffers for some time, including the homeowners who took risks, the mortgage brokers, the investment houses that sold nonsense investments and the investors that foolishly bought those investments.

Last, what is the big hurry? Let's take our time and get it right!


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