John Taylor says we have to avoid a bailout bill and the way to do that is to amend the bankruptcy law, with “the goal” of letting “a failing financial firm go into bankruptcy in a predictable, rules-based way without causing spillovers to the economy and permitting, if possible, people to continue to use its financial services—just as people flew on United Airlines planes, bought Kmart sundries and tried on Hartmax suits when those firms were in bankruptcy.”
Candidate Obama was in favor of bankruptcy reform but not for the sake of big financial institutions.
Meantime, others are coming forward with their own criticisms of why a bailout bill is bad policy, especially as it will negatively affect those who invest their own money in start-up companies and new ideas. “Sen. Dodd’s bill would require a 120-day review and impose a morass of new regulations. If you want to invest your own funds in a company of your choice, the government won’t let you spend it without triple-checking to make sure that it’s a good idea.”
So much money is pouring in to lobbying firms to pressure Capitol Hill over one part of the proposed financial reform legislation, or another, that the end result, may in fact be good policy. On the other hand, it is Washington politics we’re discussing so maybe hoping for the best is really just wishful thinking. Definitely continue to prepare for the worst