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Tuesday, March 24, 2009

Trust, But Scared!

Good Morning Papamoka Readers! I must admit that after reviewing the Obama Administration/US Treasury's new plan to buy up toxic assets clogging the financial system, I've decided to join with Paul Krugman and call the plan ill conceived and misguided.

I hope it works, but Krugman sounds wise when he questions President Obama's - the plan's - trust in the banks and the bankers. That could lead to billions more being wasted on Wall Street scam artists, and we cannot now afford the risk.

The "Public-Private Investment Program for Legacy Assets" will be funded with $75 to $100 billion dollars from the government, which officials say could lead to private investors generating "$500 billion dollars in [immediate] purchasing power." They also say the plan could expand to one trillion dollars of government investment if necessary. That sounds expensive and risky to me. How about you?

However, God forbid, I don't wish to say NO for the sake of it, like most Republicans these days. How about a friendly YELP! to signal serious worry and slight panic. There's no way around it, I - probably like most Americans - am worried about any plan that involves the banks right now.

Wow, I can't believe I'm questioning President Obama so soon after writing a piece just a few days ago suggesting how we should all support him during these dark days. I just hope you know what you're doing Mr. President, because it's too complicated for most of us.

The hitch in the giddy-up as a friend of mine likes to say (I call him Rumsfeld-like when he says it) is that we are being asked to TRUST WALL STREET again! It sounds insane! How many times do we have to risk getting burned by these greedy, low-life scumbags. I guess President Obama knows what he's doing, but the rest of us don't seem to have a clue.

Paul Krugman rightly points out how sick the banks are, and how they show no signs of improving their lending skills anytime soon. Without some kind of government institution forcing them to act, it seems unlikely that anything will change - at least to help average Americans. I guess Secretary Geithner knows something we don't know, but I doubt it.

Krugman's opinion in the New York Times gives me the feeling he sees President Obama's optimism about the market as a liability. I kind of do too. I guess we could be wrong, but he seems to trust the Wall Street brain trust too much. For God's sake, they got us into this mess! The whole thing is quite unnerving.

I'm sorry Mr. President, I support you and trust you, but this one scares me. I think you would be better off taking a more radical approach, perhaps one that sidesteps, or at least controls, Wall Street more. I just don't see the motive for the banks. With all due respect Mr. President, the plan doesn't sound like it goes far enough in terms of financial control and [middle-class targeted] impact, sir.

Krugman says it best. "The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets." That makes me VERY NERVOUS!

I trust the President, but I also want to go on record that I don't trust Wall Street and the American banker. Their reputation is ruined. They have proven themselves crooks and cowards, and I have no patience for any of them. I will support you Mr. President, but I think you may be risking a lot on this one.

Michael Boh
Papamoka's Left Coast Contritubor

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