A New Way Forward – Restore the Economy in the Public's Interest

Barry, an organizer in Seattle, tells us about a new Simon Johnson (ANWF’s favorite economist) proposal that we love:

“Simon Johnson posted this guest editorial yesterday on the Wall Street Journal site (see link below). He proposes a relatively cheap way to solve the banking crisis i.e. by compelling Geithner to make the bank’s bondholders accept bank stock in lieu of part of their bond holdings (debt to equity conversion). This will make a huge drop in the banks’ debt loads, dilute the bank’s shareholders, and avoid a huge bailout cost for taxpayers.

In fact, the only way to explain Geithner’s actions to date is to conclude that he’s trying to protect the banks’ bondholders from eating any of the cost of this mess, even though they enabled it to happen.”

This was presented in yesterday’s Wall Street Journal.