This is the Cato Daily Podcast for Wednesday, October 8, 2008. I'm Caleb Brown.

The Pulse in Wall Street bailout will take weeks to get rolling but markets are in crisis now but our

credit markets really frozen if the bailout fails in its large task what should

a plan B look like and are the villains that some say let us into this crisis really to blame.

William Poole, former president of the St Louis Federal Reserve and current Cato Institute

Senior Fellow fellow comments.

In searching for Plan B, I think we should not search for a single magic bullet or magic cannon that will fix all the problems everywhere.

I think we need a variety of approaches.

Each individual one we hope will be constructive and help us ease our way out of this financial

crisis. One that I would look at would be some tax relief in the corporate tax law that would allow companies that are taking losses this year to

Carry those back against prior year of profits and get some refunds of taxes paid in prior years.

That would produce a direct cash input from the Treasury

to troubled firms.

I think we should look at direct equity infusions of capital, that is the Treasury could buy common stock in companies, distressed banks particularly, and they might buy a certain number of shares, let's say, to avoid abuse at 5% below the

closing price of that bank share last Friday or something like that, and the banks needing capital then get a

direct infusion of equity capital. I think there are other ideas in the tax

system that could be pursued but we definitely need to have a plan B. The Treasury has so committed to the current

proposal that it can't just run away from it. So I think the Treasury needs to

continue with implementation of the current proposal,

but it needs to be ready immediately to add other elements to the plan and some of the 700 billion

that has been voted by the Congress could be used in these

other plans.

...