Bailout Logic

Two very good pieces, from Calculated Risk

Less funny are the Britain dedicating 60% of its GDP to bailout, and our 2nd UAW Bailout of 2009. Citi is begging for a bailout

Now, stimulus spending is not necessarily bad. There are a lot of layoffs these days,

Still, our habit of bailing out banks and companies in a way that rewards shareholders is disturbing. We should be taking something between 51% and 99% of company’s equity in preferred shares when we bail out a company, to wipe out the shareholders who allowed this mess to develop.

In the long term, we need to reform corporate democracy, so that shareholders are able to keep a better eye on their Board of Directors – and the Board of Directors are able to keep an eye on their executive management.