1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.

2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year's other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?

3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street's outsized political power - especially when that power is being exercised to get favorable terms from taxpayers?

4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.

5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?

What the Paulson bailout cries out to me, however, is the way in which Americans' great wealth has been turned into a political instrument to gird the economic empowerment of a class of global investors and agents. Since the 1970s, no new social programs of Medicare/Social Security importance. But, each Republican administration, marks a new level of government intervention on behalf of global markets and investments.

This is an unimaginable redistribution of wealth from the poor to the rich. While homeowners continue to lose default on mortgages and lose their home and credit ratings, the U.S. government will step in to buy these properties at above market prices the worthless paper of their mortgage so that the global investors who put money into mortgage securities do not also lose their money. Everything that bankrupt American paid, already transferred into a banking system that allowed investment banks to gamble on mortgage securities. And, everything that institutional and global investors put into mortgage securities will now have their risk transferred to all Americans, including I would estimate 2+ million single-family, 1 home, households who will lose their properties during the entire length of the crisis and economic downturn.

To provide authority for the Federal Government to purchase certain types
of troubled assets for the purposes of providing stability or preventing
disruption to the financial markets and banking system and protecting
taxpayers, and for other purposes.

Obama didn't say whether these changes should be part of the current bill or addressed in later legislation.

That may be the crucial question this week: Can Democrats succeed in loading their proposals onto Paulson's runaway legislative train -- or will they be content with promises that their concerns will be addressed soon after?

Leahy isn't sure how things will work out. But he says Paulson's reputation as a straight shooter means it's more likely that Democrats will trust his assurances.

"Paulson carries far more credibility than most people in the administration -- apart from [Defense Secretary] Bob Gates," Leahy says.

Help for homeowners must be a strong component of the bailout of Wall Street.  Innocent people borrowed mortgage money they could afford at six percent but could not afford when the ARMs reset at 10 and even 13 percent.  These borrowers were lured into the loans by unscrupulous mortgage brokers and predatory lenders.  Why shouldn't the brokers and lenders have to cough up some of their ill-gotten gains?  The subprime loans did not go bad until Wall Street had sucked every nickel out of hapless borrowers.  Then the borrowers started to default.  The lenders have been handsomely rewarded by unconscionable interest rates for the risks they took.  When the risk came home to roost the lenders now ask for a handout.  The borrowers who were their victims should receive some benefit.  

I believe any bailout must include help for Wall Street's victims as well as the predators.

1.    By assuming the bad loans, the Government is giving the banks 100% on the dollar.  None of the banks can possibly expect that.  The banks should pay the Government 20 to 50 cents on the dollar to take the loans.

2.    Homeowners either in default or behind in their mortgage payments, or whose payments equal more than a third of their monthly incomes, with ARMs occupying the homes so financed should be able to reset their interest rates to 5 or 6 percent without penalty.  But, those who received cash out at the settlement that created the ARM mortgage should have to repay 10 percent of the cash they received to receive a reset.  This would be restricted to those whose ARM mortgage is on their primary or only residence.  

3.    Regulation needs to include mortgage brokers as well as lenders.  

Right-wing opposition to the Paulson plan is vital for having any meaningful chance to stop it. Does anyone have any confidence at all in the Democrats' willingness and/or ability to impede this bailout train if the Bush administration and the Right were vigorously behind it, warning the nation of impending doom unless we submit to vast, unchecked government power of the type Henry Paulson is demanding?

That doesn't mean the assets/securities are worthless. In fact, the assets/securities are worth a considerable amount--because the underlying mortgages are still worth a considerable amount. I believe the problem is that no one knows what the underlying mortgages are worth--given declining housing prices, increased mortgage defaults, and huge market uncertainty. And no one (or few) want the assets/securites.