I have not been able to see the details of any proposal on the Resolution Trust Corporation idea being discussed as a grand plan for fixing the credit crisis.
I think we should consider a tax on all underwriters of mortgage backed securities to help finance any plan. A significant tax, based on historical underwritings, also based on the risk of the mortgages written.
Not just for incentive reasons, but because otherwise capitalism will get a blackeye from which it may never recover. The banks have to step forward and take some responsibility.
I am out in the heartland (Michigan) and seeing what people think. There is a fair amount of disgust, as much for the homeowners who stretched for mortgages they could not repay as for the banks who were writing and selling bad paper. If the plan does not make those people who are commonly, even if mistakenly, viewed as the perpetrators, I think we will have large political/populist problems.
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