Christmas came early to US banks, says the New York Times, when Treasury Secretary Paulson decided to use the first installment of the $700 billion bailout money to recapitalize banks instead of buying up their toxic securities. That would be, he claimed the fastest way to get banks making loans again. If Congress didn’t hand over the money at once, recession would hit us!
By October 17, banks had figured out just what to do with all that free money, and making new loans was not part of their plan.
Is it too late for Congress to rein Paulson in again, just to attach a few strings to the rest of the bailout?
5 responses so far ↓
1 Fooled again: Your bailout billions at work : $700 Billion Bailout Plan // Oct 25, 2008 at 6:20 pm
[…] Read the rest of this great post here […]
2 TA // Oct 26, 2008 at 12:54 pm
5 * $25 billion in perspective:
Crazy Scary Fed Charts. Sounds like a fun new kind of Halloween costume.
3 Betsy Devine // Oct 29, 2008 at 12:56 pm
And the New York Times agrees with me–after taking four days to figure out exactly the same point: http://www.nytimes.com/2008/10/29/opinion/29wed1.html?partner=permalink&exprod=permalink
4 TA // Oct 30, 2008 at 2:24 pm
Ah, but it’s just an unintended effect. ;)
5 Betsy Devine // Oct 30, 2008 at 2:41 pm
An unintended effect — I guess that would make the difference between murder and manslaughter. But with all the hype about how Paulson was the financial messiah whose brilliance would save us all, my first inclination is not to shrug off this huge boo boo.