Weimar Republic here we come!

Toxic asset plan could cost $1 trillion. A trillion here, a trillion there, and pretty soon it’ll add up to real money.

Administration officials believe this new power will save taxpayers money and avoid the type of controversy that erupted last week when insurance giant American International Group paid employees of its troubled financial products unit $165 million in bonuses even though the company had received more than $170 billion in support from the federal government.

Under the new powers being sought by the administration, the treasury secretary could only seize a firm with the agreement of the president and the Federal Reserve.

Once in the equivalent of a conservatorship, the treasury secretary would have the power to limit payments to creditors and to break contracts governing executive compensation, a power that was lacking in the AIG case.

The plan on toxic assets will use the resources of the $700 billion bank bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp.

The initiative will seek to entice private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases. The government will share the risks if the assets fall further in price.

When Geithner released the initial outlines of the administration’s overhaul of the bank rescue program on Feb. 10, the markets took a nosedive. The Dow Jones industrial average plunged by 380 points as investors expressed disappointment about a lack of details.

Christina Romer, head of the Council of Economic Advisers, said Sunday that it’s important for investors to know that the administration is bringing a full array of programs to confront the problem.

And still no squawking from the liberal loons who were outraged by Bush’s Iraq spending…

4 thoughts on “Weimar Republic here we come!”

  1. On the contrary, my liberal friends, who are otherwise intelligent people, are so angry at Bush for “causing all of this” and leaving it for Obama to fix.
    I asked one, do you like socialism? He said, “I like it better than Bushism.”
    Now that makes no sense no matter what he means. He was complaining about how his stocks keep going down. So socialism is okay for everyone else, I guess.

  2. The sad thing is that the seeds of this financial disaster were sown by Democrat presidents, Carter in 1977 and Clinton in 1994 and 1999. I’m not excusing Bush one bit for the wrong he did, but facts are facts regardless of the spin you want to give them. There’s no use explaining history to them, though; willful ignorance is a key element of the mental disorder known as modern socialist liberalism.

  3. Honey (I felt like I was cheating on my wife when I wrote that)…tell your liberal friends that the reason that his stocks are going down, is because candidate Obama promised to double capital gains taxes if elected, and a lot of people took their profits out before he could tax the crap out of them.

    Atlas will shrug.

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