This strikes me as an incredibly bad idea: “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.”
In the first place, Geithner has been incredibly slow off the mark to develop a plan for handling toxic bank assets; now we’re supposed to believe that the government is ready to take on a host of other troubled companies? In the second place, Obama has, heretofore, shown a lack of urgency (and seriousness) in pushing for a workable bank-rescue plan (including the failure to fill some 17 top Treasury positions), apparently convinced that the sheer awesomeness of his persona would serve as a viable substitute for thoughtful planning. Thirdly, this scheme opens up the possibility of more open-ended bailouts, resulting in even more massive deficit spending. And, of greatest concern, the plan expands the potential for government interference in the marketplace, and lays the foundation for genuine socialism.
The current administration appears to be trying to convert capitalism into something resembling one of those children’s baseball teams in liberal communities where scorekeeping is prohibited, where nobody loses. The difference, of course, is that political economy is not a game. Under any form of economy, somebody has to pay. Under the Obama presidency, it looks like the ones who will be footing the bill for government-sponsored excess are those who have adhered to the rules, lived within their means and engaged in truly productive activity. Way to go, suckers!
An investor in toxic assets, reviewing his portfolio.