Saturday, October 11, 2008

Waiting Didn't Make Sense

Finally, some sense coming out of Washington. Waiting until the end of October made absolutely no sense. This is not the time to dilly-dally do it now and stop the bleeding. There was nothing to be gained by delay and everything by quick action. Buy preferred positions in the banks so that when the economy settles and turns around(fingers crossed), we taxpayers will have something to show for our money and risk. It's OK to follow the British in this.
In remarks to the media just concluded, Treasury Secretary Hank Paulson said the federal government will use the authority it has been granted by the $700 billion Wall Street bailout/rescue law to buy actual stakes in U.S. banks, in addition to merely buying troubled assets off their books.

The move is notable because it will give the federal government and, by extension, U.S. taxpayers, an actual ownership position in banks, effectively nationalizing them to a degree.

Under the original bailout/rescue plan, taxpayers would be only temporary owners of the troubled assets, which will be sold back into the private sector. And, indeed, the newly announced ownership stake may be temporary, as well.

"We can use taxpayer money more effectively, more efficiently, it will go farther, they will get more for their dollars and more protection if we develop a standardized program" for buying equity stakes, Paulson said.

Paulson was asked if Treasury will spend more money buying the troubled assets or buying equity stakes.

"I'm not willing to say anything today relative to the size of the two efforts," he said.

Now let's see the checkbook out and some serious investment in America's future.

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