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The financial overhaul - Martha Carr

We can all agree that Middle Class America is bone tired of bailing out Corporate America for the foreseeable future. There were millions of federal tax dollars paid out to large corporations in 2008 and 2009 to save them from their own hubris, while the actual taxpayers lost their jobs, their savings and, in too many instances, their homes.

It has worn us out hearing about the woes of big executives who had to go without their bonuses and sell their second homes.

No one made any real attempts to bail out the wage earners in the middle of the stratum, as families wondered how they were going to keep putting food on the table, much less pay for college or put away money for retirement. Imagine what we could have done with a rebate of that magnitude. But instead, we were stuck cleaning up a financial oil spill in which we were the ducks covered in goo.

Two different administrations insisted that the bailouts were the giant cap on the gushing stream of debt that was washing over all of us. They even used the same argument that BP has when they said we had never faced a crisis like this before and it was going to take some new ideas and, maybe, even a little time.

Maybe, that's where the spin doctors for BP got the idea for their press releases in the first place. That image, though, really starts to bog down when we discuss the finer points about what was really necessary, or if the payouts were just a panicked move by the federal government. Just like the origins of the Great Depression, that is a very complicated trail that will take historians a long time to piece together.

What really concerns us now is whether we've gained traction in an economic recovery, and if we can prevent such a debacle again. It's one thing to live through a recession that causes some real financial pain, and it's another to be inside of one that threatens to take down an entire economic system. In 2008, we were on the verge of a system-wide meltdown and once was more than enough.

Last week, the Senate addressed the need for prevention and approved their version of financial legislation as a nod to a few realities. In Senate Bill S.3217, which was sponsored by Senator Dodd of Connecticut, the focus is on accountability and transparency. Those two things were sorely lacking in the run-up to the crisis.

None of the giants, such as AIG or Morgan Stanley, were required for years to report in any detail what they were up to with undervalued high-risk loans to anyone else. That made it possible to legally hide the magnitude of the shaky debt and how much it was entangled with everyone else. No one got a clear picture of the string that was going to get pulled and unravel everything.

This new bill requires more reporting, more accurate numbers and goes a few steps further and prevents the kind of incestuous management there was before, and outlines how institutions would be liquidated if that became necessary. In other words, the Plan B we were sorely lacking for the past two decades when the lobbyists for the financial businesses kept insisting that the industry was regulating itself.

It turns out that was true, but perhaps not in the way we had anticipated. They were making up the regulations as they went along, creating new markets to sustain their income levels. The bonuses were the main motivator.

Now, the House and Senate have passed a regulatory bill where the main motivation is to prevent a crushing financial tsunami by requiring everyone to show what their true business practices are, going forward. It doesn't outlaw anything in particular, but instead requires that everyone be able to see that's what you're doing and even requires that when taking a risky turn, they have adequate funds set aside if things don't go their way.

Imagine if they all had to have put even some of their bonus money into a fund for just such a scenario. Then, when it all unraveled, they would have paid their own bills and felt the sting of their own actions. At least the next time someone on Wall Street gets an idea that is in the grayer area of ethics, but puts them in the black, they'll have to let us in on the joke.

Martha's column is distributed exclusively by Cagle Cartoons Inc., newspaper syndicate. E-mail Martha at: Martha@caglecartoons.com.