From the AP, the follow-through on the big bailout bill:
An administration official, who spoke on condition of anonymity because no decision has been made, said the $700 billion rescue package passed by Congress last week allows the Treasury Department to inject fresh capital into financial institutions and get ownership shares in return.
This official said all the new powers granted in the legislation were being considered as the administration seeks to deal with a serious credit crisis that has caused the biggest upheavals on Wall Street in seven decades and continues to roil global markets.
Supporters of this approach, such as Sen. Charles Schumer, D-N.Y., argue that injecting fresh capital into U.S. banks who want to participate in the program would be an effective way to bolster banks' balance sheets and get them to resume lending. Taxpayers would benefit because the government would receive an equity stake in the bank in return for providing the capital.
"This idea would, at a minimum, complement the administration's planned approach of buying up troubled assets and may prove to be the most promising tool of all in Secretary Paulson's kit," Schumer said in a statement.
It is not clear what "the biggest upheavals on Wall Street in seven decades" means exactly. Certainly it's the biggest bailout, which is not quite the same thing.
Look for the semi-socialization of the nation's financial sector to be George W. Bush's legacy project over the few remaining weeks (thank God) of his presidency (whatever happened to the political capital he was gonna spend on privatizing Social Security? Guess he lost it in a poker game or a war or something). And somehow, if Bush has his way, maybe we the taxpayers will get big steaming piles of equity in a bunch of dying car makers and airlines too.
It didn't have to be this way. Here's reason on "building a better bailout" and here's economist and author Russell Roberts on just how bad the bailout is: