Economics

The First Rule About TARP II Is That There Are No Rules

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Bad as the stimulus was, it will almost certainly have less long-term impact than TARP II. Which was why the Obama administration was so careful about getting the details right before announcing the framework of financial bailout plan last week. Oh wait.

Just days before Treasury Secretary Timothy F. Geithner was scheduled to lay out his much-anticipated plan to deal with the toxic assets imperiling the financial system, he and his team made a sudden about-face.

Democrats unveil plan for financial sector

According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers.

They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks. There was one problem: They didn't have enough time to work out many details or consult with others before the plan was supposed to be unveiled.

The sharp course change was one of the key reasons why Geithner's plan—his first major policy initiative as Treasury secretary—landed with such a thud last Tuesday. Lawmakers, investors and analysts expressed dismay over the lack of specifics. Markets tanked, and fresh doubts arose about the hand now steering the country's financial policy.

Whole Washington Post story, well worth a read, here. Reason on the bailout(s) here.

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  1. According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers.

    Since when has that even been a concern of Treasury’s? If anything I think Geitner should be commended for pulling back for these reasons.

  2. Haw haw! Fuck you, Timmy Geithner.

  3. The First Rule About TARP II Is That There Are No Rules

    Huh. I thought the first of TARP II is you do not talk about TARP II.

  4. Depends whether Tina Turner or Brad Pitt is making the rules.

  5. Huh. I thought the first of TARP II is you do not talk about TARP II.

    I agree. If you are going to fuck up a movie quote, at least don’t put it in the title.

  6. Frankly, that article was highly encouraging. Well, OK, “highly” relative to all the other news coming out of Washington.

    I’m with cunnivore. Any sign that somebody is trying to think through the consequences of state action is welcome (as is any glimmer of recognition of the incredible strains being placed on the public purse).

    I don’t think this is cause for celebration but compared to the calls for Immediation Action in the face of this Terrible Crisis, I’ll take any hint of throughful deliberation.

  7. Um, that should have said “thoughtful” deliberation.

  8. I’ve been telling you. They are pushing for bank nationalization. Check out the Washington Post last weekend, and the NY Times’, Nicholas Kristof.

    I actually hope Geithner’s plan goes through, because it’ll head off that disaster in the wings. I’d much rather have private investors buy up the banks’ assets.

    Ideally this should be done through this process known as “Chapter 11”. But hey, I’m a just a libertarian ideologue, so nobody listens to me.

  9. There are others who think Geithner’s plan is actually stealth nationalization.

    Given zombie banks or nationalized banks I’d rather have nationalized. But given nationalized banks or banks that go through the normal bankruptcy process, I’d rather have bankrupt banks. And I’m totally willing to backstop the FDIC for as much as it takes; I find the moral hazard minimal as what caused the problems was not the insured deposits.

  10. I would love to see the banks holding my debt Collapse that way I get off debt free 😀

  11. Shut the fuck up, WaldO.

  12. Count me in the ‘this isn’t a bad thing’ camp. bad being relative, but I’d rather have them say, ‘wait this is too much and too costly’ than going, ‘wait, this is too inexpensive, let’s spend more!’

    maybe I’m too optimistic?

  13. Given zombie banks or nationalized banks I’d rather have nationalized.

    I think nationalized banks are just zombie banks run directly by Our Masters in DC, so I would prefer straight zombie banks, myself.

  14. I would prefer straight zombie banks, myself

    Well, I do admit to being a bit more cosmotarian than you.

  15. I prefer a zombie president and zombie cabinet. Every week we’d feed them a few congresscritters. Any congresscritter who didn’t want to be eligible for eating would have to resign immediately. Once we ran out of congresscritters we’d start on federal employees, executive branch first. All done by lottery to make it as fair as possible.

    I think we could keep them fed through 2012. At which point we chop them up (or however you kill zombies – I’m more partial to vamps and werewolves) and start all over.

  16. I prefer a zombie president and zombie cabinet. Every week we’d feed them a few congresscritters. Any congresscritter who didn’t want to be eligible for eating would have to resign immediately. Once we ran out of congresscritters we’d start on federal employees, executive branch first. All done by lottery to make it as fair as possible.

    I think we could keep them fed through 2012. At which point we chop them up (or however you kill zombies – I’m more partial to vamps and werewolves) and start all over.

    Dude, they’d only create more zombies. By the time we ran out of feed, the zombies would out number us, and then we’d be screwed.

    The zombiocracy never withers away. It only increases it’s numbers and strenght until there is noone left for the zombies to eat.

  17. The zombiocracy never withers away. It only increases it’s numbers and strenght until there is noone left for the zombies to eat.

    And that would be different how?

    [I don’t have Epi or Pro Libertate’s wit, so I do appreciate the setup, Hazel.]

  18. Hey Matt did you get my e-mail?

  19. I prefer a zombie president and zombie cabinet.

    Biden’s a good start.

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