Premise: the bailouts need to be funded.
Premise: no funding plan will be perfect, elegant, or devoid of innocent bystanders.
Solution: the following plan is the least imperfect, least inelegant plan I’ve seen so far, and what innocent bystanders there are will be equipped to survive without their standard of living changing substantially, if at all.

The plan:

Late this past week the SEC listed 799 companies whose stocks can’t be shorted. Additionally, there will be both private and public companies who will be lining up to pass their toxic debt on to the American taxpayer.

These companies are the immediate and direct beneficiaries of the bailouts.

The highest paid employees of the SEC’s gang of 799, as well as the upper echelon employees of the other entities looking for taxpayer relief, have to be willing to pay a price for, what are, at best, their miscalculations, and at worst, their unbridled greed. By doing so they will be repairing the capitalist/free market system that has been so good to them, and demonstrating that they’re not just lip service patriots.

A retroactive 15% surtax, covering returns from 2003-2007 inclusively, on any employees of the firms described above whose adjusted gross income was over 1.5 million dollars, should be collected by the IRS and used to fund the bailouts. And going forward, the penalties should increase dramatically should such behavior reoccur. To borrow a policy from the criminal justice system, think 3 strikes, you’re out. The above should be fine tuned so that the spirit of the idea is executable within the letter of the law.

Who would the innocent bystanders be? An innocent bystander might be a well paid petrochemical analyst who can weather this storm. All employees of all of these firms will then be incentivized to never again allow this kind of grotesque irresponsibility to occur on their watch or in their presence. An all inclusive department of internal affairs, if you will. That said, if there’s a way to more surgically determine who the responsible parties are and penalize them even more harshly, that would be ideal.

The above is composed of the broadest of strokes, and the actual revenue that would be collected is as unclear at this moment as is the amount of toxic debt the American taxpayer is being asked to take on. GAO and IRS numbers can fill in these blanks more quickly than Sec’y Paulson can fill in his.

There’s no way that John Q. Public should fund this bailout. The well heeled employees of the companies who brought us to the edge of depression should assume the lion’s share of the responsibility for preserving the system that has served them so well for so long.

Fair is non-partisan. What’s right is non-partisan.

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