Bank Bailout mimics Bush Administration Approach:

[debbierlus]

http://www.nytimes.com/2009/02/10/business/economy/10bailout.html?_r=2&hp

Geithner Said to Have Prevailed on the Bailout
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By STEPHEN LABATON and EDMUND L. ANDREWS
Published: February 9, 2009
WASHINGTON— The Obama administration’s new plan to bail out the nation’s banks was fashioned after a spirited internal debate that pitted the Treasury secretary, Timothy F. Geithner, against some of the president’s top political hands.

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Doug Mills/The New York Times
Timothy Geithner, left, with Lawrence Summers, prevailed over top administration aides.

Related
Obama Says Failing to Act Could Lead to a ‘Catastrophe’ (February 10, 2009)
Times Topics: Credit Crisis -- The Essentials

Joshua Roberts/Bloomberg News
David Axelrod, who wanted to take a tougher line on executive pay.
In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the president, according to administration and Congressional officials.

Mr. Geithner, who will announce the broad outlines of the plan on Tuesday, successfully fought against more severe limits on executive pay for companies receiving government aid.

He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.

Because of the internal debate, some of the most contentious issues remain unresolved.

On Monday evening, new details emerged after lawmakers were briefed on the plan.

It intends to call for the creation of a joint Treasury and Federal Reserve program, at an initial cost of $250 billion to $500 billion, to encourage investors to acquire soured mortgage-related assets from banks.

The Fed will use its balance sheet to provide the financing, and the Federal Deposit Insurance Corporation might provide guarantees to investors who participate in the program, which some people might call a “bad bank.”

A second component of the plan would broadly expand, to $500 billion to $1 trillion, an existing $200 billion program run by the Federal Reserve to try to unfreeze the market for commercial, student, auto and credit card loans. A third component would involve a review of the capital levels of all banks, including projections of future losses, to determine how much additional capital each bank should receive.

The capital injections would come out of the remaining $350 billion in the Troubled Asset Relief Program, or TARP.

A separate $50 billion initiative to enable millions of homeowners facing imminent foreclosure to renegotiate the terms of their mortgages is to be announced next week.

[leftofthedial]

1. The king is dead!

Long live the king!




The oligarchy prevails.

[customerserviceguy]

2. It all stinks

And don't be fooled by that characterization of an entity called a "bad bank". That's just meant to keep prying eyes away from what will really go on there. That entity is where enormous fortunes are going to be made.

Geithner beating out Axelrod on the fat cat pay really takes the cake. He's already been a great embarassment to the President, but I'm dead certain that he will also be the first Cabinet secretary who Obama really truly comes to regret naming.

[napi21]

3. I happen to think it IS important to defrost cradit availability in the US.

It was a BIG MISTAKE for the former treas. sec. not to put restrictions on the use of those funds. History should have proven to him that the uber rich can't be trusted with YOUR $$!

I will listen to Geithner tonight to be sure, but I believe HE will put restrictions on those loans. If some of the things I've heard are true, like setting up an independant "bank" to buy the skeptical assets to enable credit again, and a fund to enable banks to renegotiate mtgs. is in there, I'll support it!

[Aloha Spirit]

4. I don't think you fairly characterize the NYTimes article. Axelrod:"we came up with a good set of

guidelines and rules."

The article lays out several differences as well as similarities, and this, you would call, mimicry?

[mod mom]

5. I for one, wanted stricter limits on executive pay. It's total BS that they might lose qualified

where are they going to go in this economy? I have no faith in their leadership when after what they've done to this economy, they still believe they deseve the big bucks.