TPM Reader CR:

Please please be against this bailout. I cannot begin to think of all the

myriad reasons why this bailout as it is being floated is a bad idea of the most colossal of proportions, but I will try.

Why are there no [details], because it will be a pig in a poke. There will be a bums rush just like when Bush tried to pressure Congress into passing the Protect America Act. They will wait until right before the election and try and jam the Democratic party up and say that if they do nothing then we are all going to Hell in a hand basket. There will be nothing good about this plan unless you are a big banking and insurance CEO. What a surprise!

While the Resolution Trust Corporation was a moderately well regarded solution to the 80’s S&L scandal, this proposed idea does not, and almost certainly will not be similar, though its proponents will claim it is. The RTC took over failed banks and sold off the banks’ assets. Very simple. It was simply an enormous bankruptcy trustee.

The crucial difference here is that this bailout will not be taking over failed banks, just taking over the bad debts of the failed banks. So the banks will be able to live on and be free to do the exact same thing all over again. I cannot think of a worse philosophical, policy, or practical solution than this.

You have banks and investment houses that lobbied Congress to remove restrictions on their activities and now their own activities have loaded them down with the crushing weight of bad debt from which they all profited handsomely before they got stuck holding the pile of s**t. …

If we are going to subsidize taking over these bad debts, then we should be taking over the entire banks and liquidating them. Period.