All it would take would be a little legislation.

How about this. Let’s have a federal bill that states that any bank that took a bailout loan and hasn’t paid it back yet isn’t permitted to foreclose on anybody’s primary residence. In addition, bonuses for senior officers at lending institutions will be reduced by a factor tied to its foreclosure record for that year. High rate of foreclosures would mean low bonuses.  At the same time, institutions that refrain from foreclosing on people’s homes would be granted tax abatements on their profits indexed to the amount they are putting at risk by allowing homeowners to renegotiate their loans and remain in their residences.

Of course, passage of such a law would also involve responsibilities on the part of defaulting borrowers. For instance, no resident would be permitted to simply walk away from a house simply because its market value had fallen 10% below the size of its mortgage. That seems to be happening all over the place right now. That’s not good. Lenders have rights, too.

In short, a  spirit of enlightened responsibility and mutually assured destruction must be re-established on both sides of the equation — lender and borrower alike. They say you can’t legislate these things, but they’re usually wrong. Just about everything can be. They say that short-term, mechanistic fixes aren’t organic to the system and can’t be sustained. Really? Tell that to the guy I just gave five bucks on the way to work. He’s having breakfast on that right now. Not to mention all the banks that just reported record profits, who got their own handouts not long ago.

The situation as it exists is dire. People are out on the street. Banks own a bunch of worthless real estate that is flooding the market, just sitting there. Stupid banks made stupid deals with hopeful people. Together, they made their bed. Now they should be forced to lie in it, side by side, until this long night is over.

Any lawyers out there are invited to improve on the basic structure of this concept.  And any politician who wishes should feel free to appropriate it and take credit for it. Isn’t that what you people do?

Okay, I hear you. You’re sick of the bad vibes. You want to get your collective head out of the community toilet. Stuff you’re tired of hearing about: bailouts, stinky hedge fund shenanigans, executive compensation, retention bonuses for guys who weren’t retained, criminal excesses by shady Wall Street buttheads, economic prognostications offered by those who didn’t prognosticate anything when it needed to be prognosticated.

You’re ready to move on. The innate optimism of the American spirit is beginning to bubble bigtime within your breast. Enough of this gloom and doom! It’s time to have a burger, down a couple of brewskies, hit the new ground running.

You’re not stupid, of course. You see the unemployment rate. You see the sales figures for the first quarter. You know that if you look, there is dismal swamp as far as the eye can see. But maybe not. Not for those who see just beyond that grim horizon. Over that rim, there is dawn, the kind of light that only those who look can perceive.

Proof of this fact comes in a new poll from CBS News and the New York Times. The Times reports that:

“… the number of people who said they thought the country was headed in the right direction jumped from 15 percent in mid-January, just before Mr. Obama took office, to 39 percent today, while the number who said it was headed in the wrong direction dropped to 53 percent from 79 percent. That is the highest percentage of Americans who said the country was headed in the right direction since 42 percent said so in February 2005…”

This tiny new embryo of optimism is fragile. A vast majority of people are still worried about their jobs and are cutting expenses back as much as possible. That’s just common sense.

But you know how it is. One of our national characteristics is a certain kind of creative Attention Deficit Disorder. We can’t stay any one way for very long. And we’ve been in the dumps for quite some time now.

Disregarding stupidity and evil for a moment, a huge element of what got us here is pure psychology and decay in attitude. Repair that, ladies and gentleman, and the rest will surely follow. And you know. Even if it doesn’t, getting there just might be a whole lot more fun.

You guys aren’t going to like this, but you know who I feel sorry for? Edward Liddy. That’s right. He’s the guy the government appointed to run AIG after Hank Greenberg and his gang set it up to crash and burn. Today Greenberg popped up on television like a vicious Mini-Me to pile on the dead bunny.

Greenberg left in a scandal in 2005 after setting up the business unit that got AIG into all of its trouble. You know that operation. The Financial Products group that came up with all those cute derivatives backed with now-toxic instruments. And here he is this morning, jabbering away like a wise elder statesman. Pfui.

This was only slightly worse than the drubbing that Mr. Liddy took at the hands of the suddenly irate congressmen in Washington on Wednesday. Many of our senior legislators had good points to make, no question about it. The situation is dire, and certainly subject to Federal review, as it was years ago when the SEC was supposed to be regulating the industry. Most of the politicians acquitted themselves well. But at times the hectoring got out of hand, to the point where you might have thought, if you were a cynical type of person, that these members of Congress were trying to come up with the quintessential sound bite that would land them on the evening news. Sure enough, at the end of the day, it was the showboat from Massachusetts whose “have you no shame!” diatribe did get the most airtime. I guess he knows his business, too.

Of course, Edward Liddy isn’t blameless. He obviously made some very bad decisions. But he is only the last in a series of managers – both at AIG and elsewhere – who has done so. It’s pretty evident noxious stuff has been going on everywhere for years. The culture of compensation of which he was a part is so deeply ingrained in corporate culture now that even Tim Geithner, the guy who is supposed to oversee the bailouts, didn’t pop up a huge red flag when he first heard about AIG’s contractual obligations to its disgraced lunkheads. 

Worst of all, for the poor doofus on the stand, is the thought that you’ve got to know is running through his head as everybody is saying nasty things about his mother: “I’m doing all this for one dollar a year.” 

Man. I would do it for less than five. As long as it came with a guaranteed bonus.

You’ll have to excuse me this morning. I’m very annoyed. Last night when I got home from work I received another communication from the insurance company that handles medical for my corporation. They’re very, very good at communicating, this insurance company. What they’re really not very good at is ever paying a single nickle in benefits to policy holders, at least without a knock-down, drag-out fight.

I can honestly say that for every check they send out, they produce ten other mailings – excuses, requests for additional information, reports on excuses and, of course, rationalizations.

Yesterday it was a long document demanding more information on my wife, who has been covered by company benefits for many years now. All of a sudden, guess what. They don’t seem to know who she is. Where does she live? Where was she born? Does she have secondary insurance? No explanation is given for this institutional amnesia, but I can think of one: she filed a number of dental claims a few weeks ago. This latest salvo is designed to put off the inevitable (insufficient) payout for a few weeks or, if somebody very skilled it on the desk in Connecticut, months.

At the same time, I was informed that my 5 AM visit to my local Emergency Room last fall was being denied because the ER physician was out of network and, you know what, it wasn’t an emergency anyway. This was surprising to me, considering how many really scary tests they gave me before they felt comfortable to send me home. I’m fine now. But I certainly wasn’t fine then. I think if a person is admitted to the ER, kept there for six hours and only released after certain terrifying tests came back clean, they had an emergency.

What kind of people make these decisions? And if somebody were to throw them out of a window, would their injuries be covered?