You remember the fabled ACORN-inspired AIG bus tour, the one where there were more press people than protesters?  Nothing bad happened, luckily.  But the AIG employees who live there were forced to hire security and have to endure pushy journalists and drive-by gawkers.  This situation was caused by the Administration’s, Congress’s and the legacy media’s over-the-top reaction to the retention bonuses for AIG employees.  They have been designated as the bad guys, even though the company’s demise was supposed to crater the economy.  That was the justification for the roughly $200 billion poured into them.  Now Congress is trying to get that money back by retroactively taxing the bonuses and using the tax code punitively to single out a group of people, both of which are unconstitutional.

You would think that anyone who would willingly get involved with the government’s financial rescue efforts after that must have a serious case of attention-deficit disorder.

Well, Timothy Geithner is gambling on that.  He has come up with a plan called the Public-Private Investment Program.  From The Foundry:

This latest Geithner plan envisions spending at least $500 billion and up to $1 trillion, 95% of which would come from the government, to remove “legacy assets” from the balance sheets of troubled financial institutions. Private investors, hedge funds and other financial institutions, would manage the assets, but they would receive heavily subsidized government loans and guarantees from the government to cap their losses.

By the way, “legacy assets” is the new Obama Administration term for toxic debt, under the theory, I guess, that if you call it that, it will become that.  It’s called magical thinking and is usually outgrown by adulthood.  Usually.

But it will be different, this time.  Obama promises:

Recognizing the threat that the House’s actions posed to their plan, Obama Administration officials fanned out across the Sunday talk shows to reassure potential investors that they would not be subject to these punitive measures. White House economist Christina Romer told Fox News Sunday:

“What we’re talking about now are private firms that are kind of doing us a favor, right, coming into this market to help us buy these toxic assets off banks’ balance sheets. I think they understand that the president realizes they’re in a different category. They are firms that are being the good guys here.”

Some people see the world through rose-colored glasses:

Laurence Fink, chief executive of the money management company BlackRock, seems ready to take Geithner’s word: “We will be raising money on behalf of our clients. I don’t see how Congress can interfere in this.”

The Foundry asks:

But for how long will these firms keep their “good guy” label? What if the investments go south and taxpayers have to bailout these investors too. Does anyone really believe they would then be safe from this Congress? Or what if they are really successful and make billions of dollars with government subsidies? Does anyone really believe this Congress won’t try and take those dollars too?

Only someone with short-term memory loss.  Or a magical-thinking addiction.

This is an object lesson in the dangers of government by men, instead of by laws.

Advertisements