Because of the "principled" opposition of an overwhelming number of Republican US House members, the Billionaire Bailout flamed out this afternoon. In my opinion, this is a desirable outcome--if Wall Street is really in need of a huge bailout, then they will have to accept some stipulations that they have resisted to this point. In my view, those stipulations should be (in order of importance):
1.) Changes in the bankruptcy law that allow judges to change the terms of mortgages, so that people in danger of losing their homes can find a way to stay.
2.) An equity stake for the taxpayer in any company that accepts money for this bailout, along the lines that the Swedish government imposed in the early 1990s. If Wall Street's losses are going to be socialized, so should the profits.
3.) Greater regulation of the financial industry, to prevent another fiasco like this happening ten years from now.
4.) Executive compensation should be brought in line with performance--no more Carly Fiorina-style golden parachutes.
Now is the time for tough bargaining on the part of Democratic Party leaders--put together a package that Main Street can support. As for the opposition from Wall Street, I'm reminded of one of my mother's favorite sayings: "Beggars can't be choosers."
