Tuesday, February 10, 2009

Meet the New Boss

I would have thought that this administration would have had a better read on the pulse of the populist rage sweeping the county, but I guess I was wrong. The new stimulus plan is a disaster and it won’t work. It also isn’t very much different from the first TARP plan, who’s funds disappeared down the rabbit hole of $40,000 commodes and corporate jets.

The architect of Tarp II is none other then Treasury Secretary Timothy Geithner, erstwhile head of the New York Federal Reserve and overseer of the financial meltdown. Why Obama put this man in charge of The Treasury when his short-sightedness was instrumental in causing the problem in the first place, I don’t know. The man couldn’t even be bothered to pay his own taxes, but he is rewarded by control over the entuire financial system. Nice.

As intended by Mr. Geithner, the current stimulus plan stops short of intruding too significantly into bankers’ affairs even as they start to receive corporate welfare. The $500,000 pay cap for executives at companies receiving assistance applies only to very senior executives, who will likely find a way around it anyway. The plan also will not require shareholders of companies receiving significant assistance to lose most or all of their investment. Perhaps most galling, while the administration will “urge” banks to increase lending, it will not attach any conditions to the billions of dollars in new government money. This plan is hardly different from the Bush administration’s approach of greasing the palms of the same companies and executives who peddled risky loans and investments at the heart of the crisis. How is this a change from “the failed economic policies of the last eight years?”

I think the plan is a mistake. I also think that any plan which props up home values, and extends more credit to overextended consumers is ill conceived at best. Irresponsible use of credit got us into this mess in the first place. How is extending more credit so people can resume living beyond their means going to solve this financial crisis?

This is just more protection for the wealthy and their money. I cannot understand the thought process behind a government decision that risks economic catastrophe to protect the wealthiest Americans while enraging everyone else. I think the administration will come to deeply regret this decision.

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