If Obama is President, it’s a fair guess that there’s a new plan to give your taxmoney to shareholders in banks
Calculated Risk: WSJ: Leaked Details on Public-Private Entities Buying Bad Bank Assets
By offering low interest non-recourse loans, these public-private entities can pay a higher than market price for the toxic assets since there is no downside risk. This amounts to a direct subsidy from the taxpayers to the banks. It is amazing how many different ways they’ve tried to recycle the same bad idea.
Now, I don’t think this is because of campaign loyalty to bankers (though I am sure they gave far more to Obama’s campaign than you and your friends did). And it is not because Obama is setting up an administration of hacks and toadies (though he is, why else do you think a political nothing like Kathleen Sebelius was chosen as HHS chief over Governor / Chairman / Dr. Dean?).
It is because Obama does not know what he is doing.
As I said wrote in June 2008…
An Obama Presidency offers a reasonable hope in the Establishment: a vote for Obama is a vote for the status-quo. As the status-quo is one of the best in world history, thatâ€™s a solid argument.
As it relates to Obama, many commentators are now raising the hope that Obama will be bureaucratically captured in the same way that Petreaues and Gates were. Even better for us, Obama will have little operational control over what actually happens.
When America elected Barack Obama, it said by a majority vote, “We like the powers that be as they are!” Given this, it’s natural that Barack Obama should divert funds from the treasury to banks. In the Age of Obama, this Age of the Establishment, the simple fact that banks made catastrophically bad decisions is no reason they should lose money, power, and influence.