About Me & This Website
My Positions
On Facebook
Contact Me

  DougCo School Board Loss
  Pro-Caucus Chairman
  Free the Delegates
  Clinton Surplus Myth
  Taxes, Rich & Poor
  Clinton Surplus Myth, Pt. 2
  Financial Crisis
  Obama's Economy
  More articles...

Obama Leaning Towards Republican Banking Plan?   February 6th, 2009
A preview suggests that Obama's financial sector rescue may be the Republican plan       


More observations...

Given all the bad news about a potential trillion-dollar bail-out, there was a surprising glimmer of potentially good news as it relates to how the Obama administration may be planning on addressing the problems in the financial industry. It appears that he may possibly be considering what amounts to the Republican plan that I've been supporting since September 2008 when House Republicans initially brought it up.


The guarantee programs, combined with other bank assistance measures to be announced Monday, could eventually insure trillions of dollars in troubled assets, analysts said, potentially sticking taxpayers with billions of losses from covered mortgage and other real estate loans, if they sour...

"The administration's plan will seek to minimize the upfront costs [of TARP 2] so that the remaining, uncommitted TARP funds are sufficient for the short term," said a confidential financial industry memo on TARP provided to Fox Business. "Asset guarantees have the advantage of being less expensive from a federal budgeting perspective than outright [asset] purchases."...

Some costs in the next phase of TARP are expected to be offset by fees or premiums the government will charge firms for providing loan guarantees, the financial industry memo said.

At this point this is just rather vague and tentative information--more definitive information will be available on Monday when Treasury Secretary Timothy Geithner announces the administration's broad plan to address the problems in the financial sector. The fact that there's continued mention of a "bad bank" is potentially worrisome, but the article itself indicates that the administration has been using the term "bad bank" really loosely... so at this point it's not even clear what "bad bank" means.

But inasmuch as it seems the administration is considering insuring the toxic assets rather than buying them, this looks to be good news and something in which we can support the administration.

Again, we'll have to wait until Geithner's announcement on Monday to know for sure what the plan is. But amidst all the partisan attacks going back and forth about the stimulus package, this is something that I think we'll be able to agree on. Let's just hope it's real.

 Go to the article list