Thee can relax, Mr. Bones: our intrepid friends, the hedge-fund Democrats [1], now have the Crawford Crash as good as licked:
The plan to be announced next week involves three separate approaches.
(A) In one, the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money that those partnerships will need to buy up troubled assets that banks want to sell.
(B) In the second, the Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money.
(C) In the third piece, the Treasury plans to expand lending through the Term Asset-Backed Securities Loan Facility, a joint venture with the Federal Reserve.
An extraordinarily interesting agenda! I ought to be scrupulous, though, and mention before any analysis that all this comes straight from our old buddy Major Leaker, now evidently the War Department's mole at Treasury. The NYTC scribblers say nothing more about where the press release came from than to mention "people briefed on the plan" and "administration officials" eventually -- in their sixteenth paragraphette, unless I have miscounted. To dodge mentioning the good major, the scribblers make it sound as if two little birds named Hope and Expectation had been whispering in their ears:
The Treasury Department is expected to unveil early next week its long-delayed plan (...) The plan is not expected to impose restrictions on the executive pay of private investors (...) it is expected that the government will provide the overwhelming bulk of the money (...) The hope is that such a generous taxpayer subsidy will attract private investors ....
That brings them down to the point where Maj. Leaker dimly appears as "people briefed on the plan." Thee will perceive, sir, that Expectation and Hope and the passive voice are quite adequate to bear aloft the banner of nontransparency unassisted by even the vaguest allusion to particular organisms. Naturally we shall have to wait for some time to see whether the whole community of hired scribblers take to this dolce stil nuovo en masse. I rather wish they wouldn't, but possibly my reluctance only indicates the imminent approach of Dr. Alzheimer: one cannot seriously expect the journalism schools to pick one set of banalities and stick with them forever.
Anyhow, it is clear enough what is going on here; to have such a press release signed by Tiger Timmy [2] himself, attested in deficituary red ink by seven witnesses, and solemnly sealed with debt-ceiling wax is not indispensable.
I suppose there is some slight possibility that this is a
trial balloon rather than a plain press release, meaning that the whizkids and President Summers will reconsider, if the autoleakage goes down very badly with Wall Street and/or Televisionland. On the other hand, the fact that they released it after business hours on a Friday does not suggest that they are attempting to gauge public opinion. What it suggests is that they expect nothing very good from Vox. Pop. or from universal Hooverville and intend to go ahead anyway. (But God knows best about hedge-fund Democrats!)
Moving on to analysis, I think the first thing to point out is that Geithner von Hindenburg wants to work around the pestiferous Legislative Branch as much as possible. Where it is entirely constitutional for the FDIC and the Federal Reserve Board to conduct themselves as Secretary von Hindenburg and Bernanke von Ludendorff would have these independent agencies would be a matter to hesitate about if they were me, but of course the Twin Titans are not thee or me and cannot be losing any sleep over quaint Madisonian technicalities. Perhaps Sen. Byrd might look into it, however. In practice, the bucks for (A) have already been authorized under the species of TARP, and with (C), why, Marshal von Ludendorff has the right to print as much monopoly money as he likes -- everybody knows that!
That leaves only prong (B) of Timmy's trident. I suspect his whizkids stuck it in the middle so as to attract as little notice as possible, on the model of that list of AIG counterparties the other day. To be sure, being the middle item of only three seems a little thin, camouflagewise. It does look, though, as if Major Leaker did no more than mention prong (B) to his NYTC enablers. There seems no elaboration of what I have already quoted about it anywhere in the rest of the press release, whereas (A) gets lots and lots of attention, mixed with background material not really required by anybody who has paying attention lately.
Perhaps we had better have Sam play that one again:
[T]he Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money.
I smell something decidedly fishlike here: Secretary Geithner von Hindenburg is to ‘hire’ so-and-so, whereupon so-and-so ‘puts up’ money. That very curious division of labour sure sounds to me as if GvH were "hiring investors," which is not, I believe, the sort of language that Hoovervillains typically talk. What do thee think, Mr. Bones?
It would be patently corrupt for Timmy to hire (say) the perp Blankfein in his personal capacity in order that (say) Goldman Sachs quâ corporation should help fund Geithnerio-Bernankean schemes. Even if they were really President Summer's schemes or Mr. Obama's -- or even Uncle Sam's thoroughly bipartisan schemes, endorsed by Representatives von Böhner and von Cantor both, and by Neocomrade Senator M. McConnell of KY to boot! -- that arrangement would stink to high heaven. Whereas it would just be nonsense for Scrooge to hire Cratchit to make widgets (or to keep one of the various sets of ScroogeBank books) and then expect a revenue stream to flow from Cratchit to Scrooge instead of in the other direction.
Thus the CliffsNotes version of Prong (B) does not parse or construe, Mr. Bones, and the CliffsNotes version must have been all that Major Leaker was authorized to convey to the New York Times Company. After Neocomrade R. Santelli and Mr. Cramer of CNBC, who can be surprised that the NYTC’s business ‘journalists’ seem not to have noticed anything remarkable here that might demand a little clarification? Not crooked, only dumb, that is how I diagnose Messers "EDMUND L. ANDREWS, ERIC DASH and GRAHAM BOWLEY."
So it looks as if we humble are on our own, sir. Thee will remember my own tentative hypothesis about Bailoutgate, which may be a tad more paranoid than Crawford Crash times absolutely call for: whoever gets shafted, it sure as [exp. del.] won't be Goldman Sachs. If we take Geithner von Hindenburg's ‘hire’ in isolation, he has already made it plain that GS is his very favorite employment agency, has he not?
Thinking of ourselves as potential shaftees of the hedge-fund Democrats, however, we probably ought to worry more about Timmy's "put up" than about his ‘hire’. The perp Blankfein and his corporation are to supply "private money that each of the firms puts up on a dollar-for-dollar basis with government money." OK, sure, fifty cents from GS and fifty cents from USA, so far it is plain enough -- but what on Gore's green earth does the GSA, Goldman Stacks of America, DO with her mixed-economy dollars once they have been forged? Since this mystery meat is listed as a separate prong, it would seem natural to suppose that the GSA will do something other than what the FDIC does under prong (A) and the Federal Reserve does under prong (C). But what that "something other" would be, who can conjecture?
Doubtless we will just have to stay tuned and try to figure out what the Twin Titans are actually doing with their Uncle Sam's money and the perp Blankfein's corporation's loans and gifts from Sam.
Meanwhile it has occurred to me that prong (B) is, in a minor and peripheral way, yet another Geithnerio-Bernankean end-run around Congress, inasmuch as Timmy and Ben and President Summers and Mr. Obama cannot possibly intend to ask the Senate to confirm these proposed hires. Why, even a Neocomrade M. McConnell of KY might accidentally think to ask the candidates some potentially ruinous question about just what it is that they understand themselves to be hired to do! Fort mauvais that would be, obviously. (Yuck.)
Happy days.
___
[1] Remind me, Mr. Bones, to have the pet google go try to dig up the name of the inventor of that near-Homeric epithet.
[2] Our own epithet is hereby extended to cover Herr Teodor Geithner von Hindenburg at the U.S. Treasury as well as Mr. Timothy Gorton Ash of Hooverville West and the Guardian.
No comments:
Post a Comment