Bad News for the American Taxpayer but Not for Investors!

I have been sitting here reading about Treasury Secretary Tim Geithner's, "plan" to rescue the Banks and Investment Firms and I am seeing a frightening scenario for our economic future unfolding. When you read between the lines, virtually every action the new Administration has taken on the economy appear to be a larger plan to reward certain investors, mainly Democratic supporters, at the expense of the already battered American taxpayer and to make a huge power grab against Capitalization. His economic panel members, once again, stand to make billions on the back of you and me!

The boy wonder's plan, is a virtual freebie to investors at the cost of an estimated one Trillion dollars to the American Taxpayer. No wonder Wall Street celebrated on Monday with an almost 500 point up-tick. We, the American Taxpayers, are gifting the investors with their seed money. The investors cannot loose this money even if the venture goes south, and the taxpayer would be left holding the bag. The Investors get to set a values for those pesky toxic assets and if they guess wrong the Government [taxpayer] could loose many times the initial investment.

In an article from Tom Raum on MyWay.com:
Under a typical transaction, for every $100 in soured mortgages being purchased from banks, the private sector would put up $7 and that would be matched by $7 from the government. The remaining $86 would be covered by a government loan. and...

A joint statement by the Federal Reserve and Treasury Department said the Fed should play a "central role" in preventing future financial crises. That implied a wish that Congress expand the Fed's authority in regulating all financial institutions, not just banks.

Geithner said taxpayers still could lose money on the deal to soak up bad assets but there was no fixing the system without risk.

http://apnews.myway.com/article/20090323/D97420DG0.html

More Bad News for the American People but not Investors! The President's calling for expanded Federal power to seize not just banks but investment firms and large insurers.

A flash headline on the Drudge Report:

In a Washington Post article this morning Binyamin Appelbaum and David Cho write:

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

This is a very dangerous precedent and would make the relationship between The Federal Government and the Federal Reserve, a private enterprise, even more clouded. This is too much power in too few hands. With the AIG fiasco still fomenting in Congress, "Boy Wonder" Geithner testified to Congress this morning that he knew about the bonuses to AIG executives and tried to stop them. I thought he said he didn't know about them? Then he did know about then, then he didn't. I'm confused. I don't think the Frat boys running the Government know what they think they know.