Lawmakers debate pizza vs. Thai

[koganbot]

My second-favorite sentence in the NY Times story on the bailout agreement:

After the overnight drafting efforts on both sides of Capitol Hill — with pizza on the House side, and Thai food in the Senate — Democratic officials said they had completed a unified draft of a bill.

My first-favorite sentence (key ingredient in bold):

They also said that there would be limits on pay packages for executives whose firms seek assistance from the government and a mechanism for the government to be given an equity stake in some firms so that taxpayers have a chance to profit if the companies prosper in the months and years ahead.

Fingers crossed that this works. Waiting for Krugman to tell me what to think, but he hasn't posted yet: but I get the impression that the public conversation about the proposal actually made the likely legislation much better. The executive-pay-package limits are a minor issue - though the limits help to reduce "moral hazard," supposedly. Major is that the public sector gets some authority rather than just providing the moolah. Questions: Is the oversight really devised to be strong and effective and to help create [buzzword alert] transparency? How will the equity stake be determined? (Oh yeah, and what's an equity stake? Can you put it on pizza?)

Comments

[koganbot]

Well, the equity provisions treat this as a solvency problem, right? But of course we don't know what the equity provisions say (and I might not understand them if we did), though Paulson agreed to them eventually. Whereas the rebelling Republicans want to scrap the framework altogether and do something along the lines of guaranteeing mortgages, but no reporter at the NY Times has explained just what that proposal actually is, yet.

[dubdobdee.livejournal.com]

an interesting issue on "transparency" actually is "transparent to who" -- ie if the ordinary citizen (viz you) is saying "I might not understand them" then they really AREN'T transparent

yes, basically the original paulson plan simply looked at it as a "liquidity issue", the revised "equity provisions" revision gestures towards "solvency issue" -- though it doesn't do much about it beyond gesturing -- while the current arguments about what to do with mortgages (insure them; rewrite them) do move towards addressing them (by shifting large scads of money towards the poor -- tho they differ sharply how far towards the poor)

(in other words, the populist approach, right or left, injects the the bailout money at a point where it can "cascade up" through the whole economy) (the right version tends to inject it at middleclass level; the left versionat the lowest house-owner level)

[koganbot]

Well, doing all three at once might not be a bad idea, and today's New York Times editorial says that the key missing ingredient so far is for the gov't to allowing bankruptcy relief for individuals on their mortgages (which goes against that terrible bankruptcy bill of a few years ago); but the Republican phrase "guaranteeing mortgages" doesn't seem to do that. You'd have to rewrite the mortgages, I'd think.

(Here's Krugman's Friday column, though events were overtaking it even as he was writing.)