The Old TARP Bait and Switch

Yes, ladies and gentlemen the Bush Administration has once again pulled the old "bait and switch" on the American people.

A couple of months ago, this administration was talking about the troubled assets on the bank balance sheets. They wanted to create a market for those assets by purchasing them. One last time, they resorted to fear mongering by telling the public of serious consequences if we didnt do anything. They said this was critical. Congress gave them what they wanted to the tune of $700 billion dollars.

Then, they figured out what everyone already knew. There was no way to figure out what the assets were worth b/c the market for them was broken in the first place. So, paying market price wasnt going to work b/c it would put the banks out of business. And this is what they were trying to avoid. When they finally realized this they decided to change the plan and provide the banks w/capital at overpriced valuations.

Then last week Paulson changed the plan completely to now focus on consumer assets. What this really means is more free money for the automakers. More artificially easy financing for US consumers so they can buy US autos from companies that really should fail. For all of you who are against the bailout, you should be ticked about this. For all of you who supported the bailout b/c it was needed to save the financial system, you should be ticked b/c the automakers could very well get another freebie via TARP w no strings attached.

Watch out. This is not what most people thought the TARP was going to be.