Hornswaggler | The culture, the humor, a bit of the sports, not so much the politics, and the workplace distraction

Hornswaggle is an alternate spelling of hornswoggle, an archaic word that means to bamboozle or hoodwink. I take my pronunciation from the late Harvey Korman in "Blazing Saddles" --

"I want rustlers, cutthroats, murderers, bounty hunters, desperados, mugs, pugs, thugs, nitwits, halfwits, dimwits, vipers, snipers, conmen, Indian agents, Mexican bandits, muggers, buggerers, bushwhackers, hornswagglers, horse thieves, bull dykes, train robbers, bank robbers, ass kickers, shit kickers and Methodists!"

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Tuesday, February 10, 2009

Geithner's plan

A couple uninformed thoughts on Timmy's plan for Wall Street:

1) The Times reported today that the Treasury is "creating a public-private investment fund, jointly run with the Federal Reserve with financing from private investors, to buy up hard-to-sell assets that have bogged down banks and financial institutions for the past year."

Why would any private investor want to help purchase these worthless assets? What's the incentive to buy into this fund? (Update: The Times has a story on just this subject.)

2) The negative reaction to the plan so far, particularly the criticism that the plan is vague and not bold enough, once again raises the question: Why not just go ahead and buy up ownership stakes in the banks?

The suspicion, from Paul Krugman and others, is that Team Obama is unwilling to go this route, even if they privately believe it's the best option, because they don't want to be branded as socialists.

First of all, what exactly is wrong with the idea of injecting capital into these banks in exchange for an ownership stake and then, once the banks are back on their feet, allowing them to buy back full ownership? The banks get the liquidity they need and taxpayers have the opportunity to get their investment back, rather than watch the federal government set piles of money on fire. Just lay out the plan and defend it!

After everything he achieved in winning the presidency, after all the labels he's overcome (Arab, terrorist, liberal, radical, socialist), Obama is afraid of some more name-calling? If that's the case, if this is a failure of courage and conviction on his part, then he'll deserve the avalanche of criticism that'll come his way if the Geithner plan doesn't work.

(Update: The second wave of reaction, including Krugman, is less negative, so that's good. My hope is simply that the administration doesn't take good options off the table preemptively and for no good reason.)

.: posted by hornswaggler 5:08 PM

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