If the American People are bailing out the banks and the big
automobile manufacturers (yes they will), shouldn’t the American
People also get stock and/or warrants in exchange, and shouldn’t
they, The People, own the stock and warrants themselves rather
than having them held in trust on their behalf by the United
States Government? The bailout is insane but the Washington Wise
Guys are dragging the country down that road so it is prudent to
ask what can be done to mitigate some of the worst side effects?
The usual excuse given for why other large public holdings,
primarily land and natural resources, must be held in trust by
the government rather than dispersing ownership among the people
in shares the way ownership rights in most other assets are held
is that something about the asset in question requires perpetual
centralized management and bureaucratic stewardship on behalf of
all the people.
Now don’t get me wrong. Personally I dispute most of those
claims, whether they are made on environmental grounds where
national parks and preserves are concerned or on some other
spurious “public-interest” grounds where natural resources are
concerned. But, certainly none of these arguments hold where the
proceeds of the financial bailout are concerned, so for the sake
of argument, I am willing to set aside a discussion about these
other public holdings and ask two simple questions about the
multi-trillion-dollar financial bailout now underway:
1. Shouldn’t the United States Government insist that all
companies receiving an injection of capital, loans or guarantees
from the federal government give up an amount of ownership and/or
warrants entitling the bearer to purchase ownership at a
specified price in the company commensurate with the size of the
pubic investment, loan or guarantee?
2. Why doesn’t the United States Government distribute these
stocks and warrants directly to the American People?
There are various estimates of the amount of money that has been
or will be spent on the bailout. Let’s look at a range of them
and how the various estimates would translate into personalized
holdings of equity interests.
The simplest way to think about a distribution is on a per capita
basis, although I do not think that really is the most equitable
way. Nevertheless, it may be the only politically viable way.
Regardless, the formula for distribution of the assets to the
American People is far less important than the principle that
these assets should be distributed directly to them, right now.
According to the latest Census Bureau estimates, there are
currently 305,754,329 people in the United States. The highest
figure so far being bandied about as the eventual cost of the
bailout is $8.5 trillion, which amounts to $27,800 for every man,
woman and child in the country. Even if the federal layout for
the bailout turned out to be no more than, say, $2.5 trillion
dollars, surely a low-ball estimate, that would amount to $8,176
per capita.
There are numerous ways the distribution of these shares and
warrants could occur. The simplest would be to use the stock and
warrants acquired through the bailout to capitalize one,
preferably several mutual funds under private management. Shares
of these mutual funds could then be put into a personal
retirement account established in the name of every person in the
country totally independent of Social Security. Each account
would be completely under the control of the individual whose
name it is in or that individual’s trustee if he or she is a
minor or incapacitated. No restrictions or taxes would be placed
on the account beyond the restrictions placed on any other Roth
401(K) account. Shares of the mutual funds held in the accounts
could be sold and purchased freely at individuals’ discretion,
and any other asset permitted held in any other retirement
account could be held in this account.
It’s the simple, just, and efficient thing to do. It’s change we
can believe in and change we need. Why not do it, Mr. Obama? Yes,
you can.
