Add my voice to the chorus of those who scoff at the idea of giving a blank check to the finance industry whose lack of ethics got themselves into the mess they’re in now. I’m sympathetic to the notion that a bailout might be needed to forestall a bigger crisis, but there has to be strings attached. Robert Reich has some great ideas, though I’d be even harsher :

1) The CEO and entire Board of Directors are fired. No golden parachutes, just clean out your offices and don’t let the door hit your ass on the way out. Any executives VP and above loses all compensation beyond their base salary for this year and the next three years.

2) Every mortgage held by the company is refinanced at 30 year 5% fixed rate. Don’t punt this to bankruptcy judges or deal with on a case by case basis, just make it automatic unless a borrower decides to opt out.

3) Full transparency. Not just additional regulatory hoops to jump through, but every financial document available for shareholders via an externally-accessible corporate intranet site. Obama’s Google-for-government proposal adapted for corporate governance.

4) Stealing this one from Reich : “All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers.”

5) A new tax on the financial industry that goes into a fund (a la the tobacco industry) to fully inform Americans that a 30% interest rate doesn’t mean you’re paying 30 cents extra for every dollar you borrow. Public service announcements about predatory lending, mandatory classes about personal finance for all high schools, and major restrictions on misleading marketing. It’s not enough to simply ban the pseudo-fraudulent practices that prey on the ignorance of the American people, our country needs to be educated enough to realize what they’re getting into.

Not that any of this will actually happen. As Paul Krugman says :

And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.

I hope I’m wrong about this. But let me say it again: Treasury needs to explain why this is supposed to work — not try to panic Congress into giving it a blank check. Otherwise, no deal.

I really hope Obama gets out in front on this issue tomorrow. His “Statement of Principles” is a damn good start.