THOMAS FERGUSON
Available for a limited number of interviews, Ferguson is professor of political science at the University of Massachusetts, Boston. He is the author or coauthor of many books and articles, including Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems (University of Chicago Press).

He said today: “These bailout schemes are absurd. They do need a bailout, but there is no reason the public should pay. The question is price. And they need to fix the rules before they give out money or they’ll just start all over again.”

He added the following points:
1) “You need to do the bailout, unless you like depression and currency collapse.”
2) “Getting rid of the bad assets is exactly the right approach. Then the inter-bank market can reopen.”
3) “But the price and new rules are the crucial questions. Who pays is the big issue. The proposals are to take bad assets from firms so they can stay in business. This is rather different from the AIG deal, where the firm seems clearly to be destined to be broken up. No reason the public can’t get its money back in these new cases. You do this by:
* Taking equity in the firms you bail out and selling later. I prefer this to warrants, so firms can’t do what Chrysler tried and try to pressure the government not to exercise the warrants.
* I would also insist that firms that receive aid issue senior debt to the government that has rights over all other bonds, etc. That’s to make sure some money comes back right from the start.
* I would also try to recapture some of the giant gains in the stock market that are coming even today … You can do that easily with, say, a modest tax on interest and dividends. ‘Carried interest,’ the ludicrous tax break for private equity, should go as part of any political deal on this. It is beyond crazy to ask American workers to subsidize firms that will soon be back trying to break up their firms and throw their rescuers out of work.
* And you have to reregulate. Specifically, restrict leverage, probably put on reserve requirements, rules on use of depositors money, etc. It is vital that derivatives trading be restricted to exchanges or the whole nonsense starts all over again. If you give them the money first, reform will never happen.”

“Unfortunately, the Democrats seem as happy to give our money away as the GOP.”
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DANNY SCHECHTER
Director of the new film “In Debt We Trust” and author of the new book Plunder, Schechter, who is editor of MediaChannel.org, is blogging about the crisis.

ROBERT BRYCE
Bryce is author of Pipe Dreams: Greed, Ego, and the Death of Enron. He said today: “Enron showed we needed more regulators policing Wall Street. That didn’t happen. What is going on here is a privatization of profits and a socialization of costs. The public is going to pay for the mortgage/subprime mess in the form of higher taxes, a devalued dollar and increased inflation.”

Bryce covered the Savings and Loan crisis extensively in his book, Cronies: Oil, the Bushes, and the Rise of Texas, America’s Superstate. He said today: “The current financial crisis, like the S&L mess, was the result of too much deregulation. But this meltdown will dwarf the S&L crisis, which cost about $300 billion. What makes the current financial crisis more bitter to accept is that we’re still paying off the government bonds that were issued to pay for the S&L bailout.”

Bryce’s latest book is Gusher of Lies: The Dangerous Delusions of “Energy Independence.”
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167