A trillion here, a trillion there; not much to begin with, but soon it can add up to some real money.
WASHINGTON (AP) – The Obama administration’s latest attempt to tackle the banking crisis and get loans flowing to families and businesses will create a new government entity, the Public-Private Investment Program, to help purchase as much as $1 trillion in toxic assets on banks’ books.
The new effort, to be unveiled Monday, will be followed the next day with release of the administration’s broad framework for overhauling the financial system to ensure that the current crisis – the worst in seven decades – is not repeated.
A key part of that regulatory framework will give the government new resolution authority to take over troubled institutions that would pose a threat to the entire financial system if they failed.
Administration officials believe this new power will save taxpayers money and avoid the type of controversy that erupted last week when insurance giant American International Group paid employees of its troubled financial products unit $165 million in bonuses even though the company had received more than $170 billion in support from the federal government.
Under the new powers being sought by the administration, the treasury secretary could only seize a firm with the agreement of the president and the Federal Reserve.
Once in the equivalent of a conservatorship, the treasury secretary would have the power to limit payments to creditors and to break contracts governing executive compensation, a power that was lacking in the AIG case.
The plan on toxic assets will use the resources of the $700 billion bank bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp. (Read more.)
B.S. Report–If a person were cynical, he might start to believe that the Obama administration is just winging it, and they don’t really have a clue as to what they’re doing. That is, if you were cynical.
Well, count me in the cynical camp. I think we’re looking at a group of people that are so incompetent that they’re basically experimenting with the United States economy–at taxpayer expense, of course.
If that’s not bad enough, they’re taking the greatest nation in the history of the world and attempting to rework it; to fundamentally alter it because they have the arrogance to think that they know better than all the great minds that came before them.
So far they’re proving that they don’t even have one good mind between them.
Obama-man says he will rescue us...but unlike Superman, Obama-man first creates the crisis, and then insists we need him to fix the crisis.
THE B.S. REPORT 