Informative updated discussion on this issue on NYT’s Room for Debate, “Will the Geither Plan Work?”  It includes comments from various economists. Some say it might work and others say no.  Commentators are Brad Delong, Simon Johnson, Paul Krugman, and Mark Thoma. 

Simon Johnson made some excellent points:

“. . . This kind of complex market-based scheme makes scams easy. After less than 24 hours, the Internet already abounds with detailed and plausible proposals regarding how to take unreasonable advantage of the plan, either if you are an independent hedge fund buying toxic assets or the employee of a bank selling the same or – ideally – someone with connections to both.

Banks, hedge funds, insurance companies and the like are willing to stay involved only if this does not bring onerous additional government scrutiny. As scams become more apparent – and it only ever takes one or two prominent examples – controls will be tightened and private sector participation will fall off. . .

. . . We must learn the painful lessons of A.I.G. and create laws, put in place procedures, and hire people who can clean up massive financial messes. The magic of the market will likely not get us out of this morass; we need a new Resolution Trust Corporation-type structure and we need it fast.”

You people just don’t understand the brilliant subtlety of this plan.  The idea is that the handover of our money makes the populus so pissed off that we threaten the uber wealthy and their corporations.  In turn, they have to hire massive security forces to protect themselves and their holdings (this also allows the withdrawal of troops from the Middle East, since they can get these jobs). These forces therefore have disposable income, which begins to circulate, and the multiplier effect kicks in.  Since we no longer manufacture anything to sell to anyone, and none of the pols are addressing this issue, what else can we do?

So do your part, and storm the gates of a nearby multi-millionaire’s home today.  If it’s a politician, all the better!

This is my favorite thread. Everybody here gets what is going on.

One financial institution said it MIGHT offer a Mutual fund to invest in this pile if shit. INTERESTED??

What can you say other than “utterly disgusting.

Obama is becoming a Bush Light and Geithner rather than being fired is actually listened to in all of his bankruptcy.

Call me naive, but, this strikes me as a ridiculous plan! The shady criminals in the banks, investment and insurance companies are the ones being rescued, while the people on the street are left holding the bag!

Gee, golly, I guess I am not smart enough to understand this and I should just trust the people who created this fucking disaster in the first place! I was born once, but, it was not yesterday!

Xntrk - isn’t it interesting that some other countries consider their country’s natural resources, like oil, as belonging to the people of the country whereas we consider them the property of whoever gets them out of the ground.  What’s interesting is the natural resources were not created by those who claim to own them.  Next thing we know, air will be owned and we’ll have to pay for it if we want to breathe.

Isn’t this exactly what got us into this mess to begin with, the buying and selling of debt?

This plan just means that we have to learn twice the hard way…

This is the way it’s going to work, dummies.  We choke the banks with money, they gag and whatever they throw-up, we get - a version of Reagan’s trickle-down alchemy if there ever was one.

And, what better evidence do we need that we’re getting screwed than the stock market passing the 400 mark today?

Everyone one of the comments on this thread gets to the bloody heart of this matter. What else can a human being say?

Now we know what our brave young men and women fight for in foreign wars, i.e., the freedom for Wall Street financiers and their on-the-take politicians to screw Americans at home. What a great life for bailed-out bankers and their huge, unwarranted bonuses, and of course the taxpayers are told by the corporate media to sit and take it for the good of the country. Could the politicians, i.e.,  Obama/Schumer/Dodd/Frank/Geithner/Summers/Bernanke and the financial elite be any sleazier!

“There is no doubt the government is taking a risk,”

  Taking a risk with our money—we underwrite their risk and they make out either way.
  What we could be doing with that money—for us.
Maybe it ultimately was a good thing when Wall Street fell in ‘29. The country re-appraised priorities for the common good. The way it is evolving now—in order to stave off a repeat they are protecting Wall street at our expense- and ultimately—that may have a completely different outcome. Much worse than it was in the 30’s.
Because we are saving their lifestyles at the expense of our own.
I am really starting to despise Obama and his servile acquiescence to greed.

I heard Krugman on DemocracyNow this morning.  It’s a nice adjunct to the quote above.  I shall read the transcript.  At least Krugman was aware when he was speaking “economics” speak and switched to plain English for us regular folks.  http://www.democracynow.org  I wonder why Pres. Obama doesn’t speak/write/get some input from Krugman (besides Krugman’s column)?

Turbo Timmy is certainly fast and loose with American taxpayer money. Yup. Turbo Timmy is working all by hisself at Treasury too. Hmmm, that sort of figures. One more “trillion” dollars to go please. Key-rist, isn’t that about enough? Does the American taxpayer have ANY money left for Turbo Timmy to piss away to the Wall Street types? Holy freaking crap, our grandchildren are going to hate us viciously. ‘We the people’ just laid there and took it up the chute and didn’t even blink. Talk about “taxation without representation.”

Here are some of the best investments the banks have ever made as reported on the hill.com

JPMorgan Chase & Co., which received $25 billion in bailout money last fall, was the largest bank contributor in the last two periods. The firm’s PAC spent roughly $87,000 since Nov. 25, including $5,000 to former Sen. Norm Coleman (R-Minn.), $5,000 for debt retirement to Sen. Mark Warner (D-Va.), $15,000 to the National Republican Senatorial Committee and $5,000 to the New Democrat Coalition

Wells Fargo’s PAC also gave Coleman a $5,000 PAC contribution on Dec. 23 for his Senate Recount Fund. Huntington Bancshares, an Ohio-based bank, gave $5,000 to the leadership PAC of House Minority Leader John Boehner (R-Ohio) on Jan. 15. KeyCorp, another Ohio-based bank, gave $7,670 to Ohio Democratic Gov. Ted Strickland in January.

http://thehill.com/business—lobby/troubled-banks-still-donate-to-campaigns-2009-03-03.html

White House Officials Oppose Tax on Wall Street Bonuses

Obama administration officials are expressing concern over moves by Congress to heavily tax Wall Street bonuses. Last week, the House voted to levy a 90 percent tax on bonuses paid since January 1 by companies that owe the government at least $5 billion in bailout loans. Jared Bernstein, Vice President Joe Biden’s top economic adviser, said the House bill is a “dangerous way to go.”

The ordinary American is screwed!