Elizabeth Warren actually gives some historical background. This is a great video that explains the options clearly. How come she’s the only voice in government doing this? Wait, don’t answer that.

But then, Republicans are always for throwing trillions to banksters with no transparency and no accountability, aren’t they? Bloomberg:

A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis. …

“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report. …

Warren, in an interview on Bloomberg Television, said yesterday that while “things may be getting a little better” under Geithner, the Treasury still needs to be more transparent about how it is spending the taxpayers’ money.

“We still have a long way to go, a very long way,” she said. …

In the report, Warren’s panel said “it is possible that Treasury’s approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth.”

The group said it was offering an examination of “potential policy alternatives” for the Treasury and not endorsing any shift at this time.

Still, it said a bank liquidation would be “least likely to sap the patience of taxpayers” and “provides clarity relatively quickly” to the markets.

“Allowing institutions to fail in a structured manner supervised by appropriate regulators offers a clearer exit strategy than allowing those institutions to drift into government control piecemeal,” the report said.

The report also said that past successful financial rescues were accompanied by governments’ “willingness to hold management accountable by replacing — and, in cases of criminal conduct, prosecuting [See William Black] — failed managers.” …

Sununu and the five-member panel’s other Republican appointee, Representative Jeb Hensarling of Texas, dissented from the entire report.

The oversight panel was set up under the rescue law passed in October. It has three members appointed by Democrats and two by Republicans. The group’s reports are required by the legislation.

Timmy’s doing a heckuva job! Really, it’s just like health care “reform,” isn’t? Shovel our money at those who are causing the problem, and refuse to look at programs that worked (at least for the people).

Same mentalite. The key is to keep the “rents” flowing to “the right people.” After that, we can talk policy for the little people.

UPDATE Here’s the full report, from the COP blog. Now, to be fair, Richard Neiman, the New York State banking commissioner, is a Democrat, and he also dissents. But, as a bankster, he’s a finance democrat, so chalk that one up to cognitive regulatory capture; we’re in distinction without a difference territory here.