Purified Kleptocracy: New Bank Bailout Plan Aims to Enrich Private Investors

[balantz]

Purified Kleptocracy: New Bank Bailout Plan Aims to Enrich Private Investors

by: David Sirota

Sat Feb 07, 2009 at 13:48
http://www.openleft.com/showDiary.do?diaryId=11435



Well, at least they're being honest about the kleptocratic goals of the new bank bailout plan:

The new financial industry rescue plan, to be outlined in broad terms on Monday in a speech by the Treasury secretary, Timothy F. Geithner, will not require banks to increase their lending. That is despite criticism that institutions that already received money from the Troubled Asset Relief Program, or TARP, either hoarded it or used the funds to acquire other banks.
The incentives to investors could be in the form of commitments to absorb some of the losses from any assets they purchase, should their values continue to decline. The goal is to relieve the banks of their worst assets so that private investors might then provide more capital.

So, in a nutshell, banks get more taxpayer cash, but taxpayers will not force the banks to lend more, nor will taxpayers have the leverage to throw out the economy-destroying management of the banks that we now own. Instead, our money will be used to ensure that huge private investors that put money into those banks don't lose any money on their risk.

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[jwirr]

1. Isn't that what the first one did with its CEO bonuses and other waste spending.