Robert Kuttner has an article about the madness of Geithner's scheme, which he says seems to be changing every day, and offers alternatives:

In the latest version, the Treasury will put up between $75 to $100 billion to leverage loans and loan guarantees from the Federal Reserve and the FDIC (down from earlier projections as high as $200 billion.) The money will be used to entice a new round of speculative bets by hedge funds and private equity companies.

The FDIC is the newly drafted participant in this scheme and its leaders are said to be less than thrilled with its designated role. Compared to the Treasury, the FDIC has been a model of competence and transparency. The FDIC is coming before Congress to seek replenishment of its somewhat depleted insurance funds, and now Treasury is coveting that money to underwrite much of Geithner's latest scheme. But you can only safely insure so many risks with the same capital (shades of AIG!)

One of the red flags about this the looting of the FDIC is that it seems that when the Treasury gets the FDIC's money, that money is going to fall into the black hole of unaccountability that Taibbi describes at the Fed. Kuttner confirms this:

Like everything else about the Paulson-Geithner approach, this latest twist is totally clubby and non-transparent. There is no objective process, and no public criteria. Congress is being kept in the dark. The Congressional Oversight Panel is being denied the documents it needs.

Maybe Obama should just drop the pretense of transparent government. What a Bushlike relationship he and his guy have with Congress here.

An alarming aspect of the plan is that private investment companies will manage the process on behalf of the government, despite the fact that government is providing most of the capital and insuring most of the risk. Basically, the Treasury is colluding with private speculators to create off-balance sheet entities, to offer new windfall profit opportunities and disguise the true degree of risk. If this all sounds vaguely familiar, Geithner's Treasury, with no sense of irony, is offering a reprise of the several abusive and opaque gimmicks that produced this crisis, a tour that winds back down Memory Lane, from AIG to Enron.

But Kuttner suggests that if Obama sees, after a few weeks, that Geithner's plan is failing, he is flexible enough to try something else. Kuttner points to FDR's proven plan:

The alternative course, which is winning converts across the political spectrum, is a variant on the Reconstruction Finance Corporation of the Roosevelt era. With an R.F.C. temporarily taking over the insolvent banks, you wouldn't have to bribe hedge funds and private equity companies to speculate on toxic securities. Government would take over zombie banks and use government auditors to determine just how much new money was required to bring a vastly simplified financial system back to life. Shadow banks, loan securitization, and convoluted high-risk schemes would loom smaller, not larger. The process would have far greater simplicity and transparency. And it would be far more likely to get the banking system working again, more quickly and at less public expense.

http://www.huffingtonpost.com/robert-kuttner/geithners-last-stand_b_177850.html

Which of those brave, patriotic, adversarial reporters received birthday cupcakes from Bush?!

Do tell.

He should be featured in All the President's Men, Part Deux.

"You can always deal with Kurtz, because you know you're not going to get sand-bagged," says former hedge-fund manager and CNBC host Jim Cramer, who was one of the key players in Kurtz's book The Fortune Tellers. "He's not trying to make his career by destroying you. He doesn't abuse you. . . . That's not how he views journalism--he views it as trying to get the story out."

http://www.washingtonian.com/articles/people/1794.html

Thanks, Osmium. Not surprisingly, Gregory's name is one of the first that came to mind. That turd.

Oh, the humanity!

...

Shootingblanks, I think your inner child needs a hug or something. You'd better get on that soon, because, dude.