The government never ceases to amaze me. It was just a few weeks ago that a “bail out” plan was introduced, rejected, re-introduced and passed. There were calls that IMMEDIATE ACTION MUST TAKE PLACE! and Presidential candidates were jetting back to Washington to “help”.
$700,000,000,000 (that’s 700 billion with a “B”) was allotted. Talks centered around the government buying distressed mortgages.
Then the fed started buying chunks of banks and AIG.
Yesterday, Treasury Secretary Henry Paulson pulled the plug on purchasing troubled assets — the initial focus of the bail out plan.
Now they’re talking about helping to increase the availability of student loans, auto loans and credit cards in the next consumer focused iteration of the plan.
Meanwhile, Wall Street investment giants Goldman Sachs and Morgan Stanley — both recipients of bail out funds — have earmarked 13.2 billion dollars for end of year bonuses to their employees (source).
I will freely admit that I can’t get my arms around this whole bailout / rescue thing. 15 hours of college economics and finance does not make me an expert by any stretch of the imagination.
But I’d like to think that the freaking Secretary of the United States Treasury at least has a clue.
The way this plan flip-flops back and forth certainly causes me to sit back and wonder about the Treasury’s general clue level. From this observers slightly educated eye, this thing has all appearances of being more of a “Lets throw tens of billions of dollars hither and yon and see what, if anything, sticks”.
And that scares me.