Thanks to Wikicommons.

Good news folks! President  Barack Obama and Treasury Secretary Timmy Geithner have Got the answer!

So… what is the question you ask?

The question is: How the heck are we going to fix for America’s sputtering economy? (as if US Democrazy did not have enough to write about with Iran’s election and gay rights).

On Wednesday the White House released their proposal (a whopping 88 page document, big problems need big solutions).

Now don’t worry if you have not had time to read it (it’s currently being used to level a desk in the USDemocrazy office) as any reforms that get passed will need congressional approval.

It was for this reason Geithner gave Capital Hill a visit.  There, in special hearings he faced down cantankerous congressional questioners armed only with a microphone.  He faired reasonably well to the grilling (he didn’t even break his ankle) but there were skeptics of the plan.

One major point of objection to the White House’s plan realted to the Federal Reserve (also called the “Fed”  by its fans and “Fed Up” by its detractors).

The new plan would greatly increase the power of the Federal Reserve to regulate business.  Democratic Senator Christopher J. Dodd inquired if the increased power for the Federal Reserve was “like a parent giving his son a bigger, faster car right after he crashed the family station wagon”. (nice analogy)

Another critique, voiced here by Will Cohan at the Daily Beast, is that the plan does not provide a long term solution and that

A lasting fix will come only when the top 100 or so highest-paid executives at each of these firms—regardless of whether they remain TARPed or TARP-free—have some serious skin in the game, along the lines of their entire net worth.

So what do they mean by skin in the game?

NPR gives us the skinny on the term. Essentially it is this:   During the lead up to the sub-prime mortgage collapse, banks were handing loans out like hot cakes (and not very good hot cakes). 

The banks would take those loans, repackage them and sell them to others (as mortgage backed securities). The banks no longer owned own these loans and thus having no vested interest (i.e. skin in the game) as to whether or not the loans defaulted.

And… of course many loans did default leaving us with the current financial mess.

In addition to the hot cakes there was plenty of hot air being pointed at the new plan.

Howard Glaser, at the Huffington Post, believes

the proposed overhaul is, by and large, in the best interests not only of consumers of financial products, but the financial companies themselves, their shareholders, and investors.

and wonders if

the industry know a good deal when it sees one?

So how will this proposal look when it gets out of Congress?  Who knows and we’ll have to just wait and see (and knowing how fast Congress is this could be quite a long time).

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Never mind waiting, I hate waiting (and they say TV shortens ones attention span)!  Why don’t our faithful readers post up what they think of this plan and what should be done (please hurry as I’m also waiting for your replies to our other posts).