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Everything Old is New Again
As originally outlined, the government would have bought up toxic mortgage-backed securities at a premium over their current deflated values.
The New York Times, on the Bush Administration’s first bank rescue plan
The plan aims to remove the so-called toxic assets—many of them bad mortgage investments—from the banks’ balance sheets through a private-public partnership.
ABCNews, on the Obama Administration’s new bank rescue plan
Official details on Tim Geithner’s plan to get credit flowing in the financial industry are out today. He wants to use government incentives like low-interest loans and risk sharing to encourage private entities like hedge funds to buy up to $1 trillion of crummy mortgage-backed securities from banks. We’re not the first ones to point out that this sounds much like former Treasury Secretary Henry Paulson’s original plan for TARP, which was abandoned last year. And we all know where that cash went—or not. Which, of course, is part of the problem.
It might save us all some time and paperwork if we just funneled the money directly to outsized bonuses, no? Cut directly to public outrage, cue the Congressional hearings! Gary Ackerman can start working on his monologue. (It’s all too easy to be cynical these days, but sometimes it’s so hard to resist…)
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