Wednesday, November 19, 2008


With over one-third of the $700 billion dollar bailout money (TARP: Troubled Assets Relief Program) given away by Henry Paulson, it has become painfully evident that the money is being rapidly squandered away without any oversight, or pre-conditions whatsoever.
Paulson had originally stated the money would be used to generate new loans, and buy off bad loan bundles at whatever bargain prices the banks could afford / accept in a negotiation. However, the banks, some of whom like Bank of America didn't even want the money, have defiantly used the money to pay off dividends, deferred salaries, and for acquisitions of other smaller institutions. The rest of the bailout went to AIG, who renews and ups their monetary demands and requirements seemingly on a weekly basis.
True to the current administrations "free market" financial philosophy, this money has been given out like the money was sent raining down from the heavens, without any oversight, or logic. And the American tax payers have been rewarded with the financial institutions defiance, and the creation of a bailout plan spiraling out of control by any government agency. And the money, as always, has been given in a painfully ignorant "trickle down" fashion, rather than a "bottom up" manner which is preferred by the next administration, and would immediately jump start the American economy.
So what should Henry Paulson do? In my not so humble opinion, the money needs to be given only to banks to buy off at risk home financing loan bundles which the banks have been willing to renegotiate at more reasonable terms. It must be made illegal for anyone to take bailout money and apply it to any salaries, dividends, or to acquire any company without the Senate banking committees approval (in a public hearing).
Secondly, a portion of this money must go towards freeing up the credit availabilities for college students, small businesses, new car buyers (thus helping the big three auto makers), and to homeowners in trouble. And there must be strict oversight of these negotiations and bailout revenue distributions.
If the lame duck Bush administration cannot get it right, then congress must hold onto the final two-thirds of the bailout money FOR THE NEW ADMINISTRATION to oversee. I think this would be the prudent thing to do, as we have all seen the effectiveness of the current administration to do damn near anything. No sense throwing $700 billion dollars away after the bad money already squandered by the ignorant legacy of the Bush II administration.
And that is the world.....the World According to Kimba." As always, thanks for reading.

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