Monday, March 30, 2009

Time to Start Selling

It already looks like there are two camps critical of the Treasury plan.  Those who think it will fail and those that think it will succeed.  Paul Krugman seems to be in both camps -- he thinks it will succeed in making rich people richer and fail to do the job.  Now the New Yorker seems to be siding with the problems of success arguments:
 It’s conceivable that this plan could work for the funds but fail to save the banks, which will still have lots more bad assets on their books. As long as it works for the funds, some very, very rich people are going to get much richer, thanks to once-in-a-lifetime favorable terms provided by the federal government and unavailable to the rest of us. What then? It will be a few years before this has played out. Maybe by that time the economy will be better, and the country will have calmed down. If not, the dynamic we have seen in the past few weeks will only become more severe, and who knows what kinds of social poison will work their way into the fabric of American life.
First of all, the Treasury will share in profits dollar for dollar with the funds. Secondly, the profits will be taxed in some fashion, at least once, before they can be spent. So the "taxpayers" get more than the rich people.

I have addressed this before, and will just say that the Treasury should be eager to sell parts of their piece to the public, to make it known that it isn't only the ultra wealthy that can make money in this.

Meanwhile, I have a feeling that most writers on this subject haven't fully read or understood the Treasury plan, and would do well to actually read it before writing extensively on it.

1 comment:

babar ganesh said...

a lot of things are still TBD. FDIC is asking for input.