CatherineRhodes.com

Tough enough to take on Wall Street?

Elizabeth Warren, Harvard economics professor and chair of the Congressional Oversight Panel, is a leading advocate for accountability and transparency. As such, she advocates creation of new consumer financial protection agency, which of course is getting resistance from the Republicans. Here’s what she said:

My first choice is a strong consumer agency. My second choice is no agency at all and plenty of blood and teeth left on the floor.

Here’s Ms. Warren’s op-ed from Politico entitled “Banking on Hypocrisy.”

Go Liz!

JOHN STEWART IS A GENIUS. On this show he presents mind-churning insights like, if we bail out the banks for having the toxic assets and bail out AIG for insuring the toxic assets, aren’t we buying the same toxic assets twice?   Hmmm…. to that I would add — now we’re providing aid to homeowners, so is the taxpayer covering the assets three times?

Note that on this segment John Stewart calls out financial analyst Jim Cramer for encouraging his viewers to buy Bears Stearns, which went under six days later. The show has launched a fued between Stewart and Cramer which is continuing with much glee.

Our country is bursting with innovators looking for capital

THOMAS FRIEDMAN is a very smart man. Reading his column in today’s New York Times, I wanted to shout “bingo! Somebody got it.”  The basic theme is this: Why continue to subsidize the Big 3 under the “too big to fail” extortion? Or, the way Mr. Friedman puts it, because the automakers  “claim that their funerals would cost more than keeping them on life support.”

His incredibly smart idea: instead of pouring $20 billion more into the black hole of Detroit, instead offer it as it as investment funding for start-ups.

Call up the top 20 venture capital firms in America, which are short of cash today because their partners — university endowments and pension funds — are tapped out, and make them this offer: The U.S. Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way. If they go bust, we all lose. If any of them turns out to be the next Microsoft or Intel, taxpayers will give you 20 percent of the investors’ upside and keep 80 percent for themselves.

Or break it down further — instead of 20 companies getting a billion each, 200 companies get $100 million each, or 400 companies get $50 million. (The money is absolutely staggering.)

I say, let the automakers go bankrupt, forcing them to reorganize and rewrite their contracts with unions, vendors and auto dealers across the country. In the meantime, the tax payer bailout money has a better home.