I have to say this but I think the people in the Bush Administration could screw up a wet dream! I just wonder how long it took the the a-holes on Wall Street to convince Paulson to go back on his word. My feeling is that Congress should just shut the whole thing down until Obama is inaugurated. The Bush Administration cannot be trusted to acted responsibly.
A Bottom-Up Bailout Rather Than Trickle-Down
Hank Paulson has just about burned through $300 billion, and it's not clear what the public has got out of it. Perhaps things would be worse without the bailout but they're certainly no better. Wall Street banks have not significantly stepped up their loans to small businesses, college students, car buyers, or distressed homeowners. Much of the auto industry is on the verge of bankruptcy. And the rate of foreclosures is rising.
What happened to all the money? About a third has gone into dividends the banks are paying their shareholders. Some of the rest into executive salaries and bonuses. Another portion toward acquisitions designed to raise share values. Another chunk for bailing out giant insurer, AIG.
That's not what taxpayers bargained for. Paulson originally told Congress he'd use the money to buy mortgage-backed securities that were clogging the financial system. He'd create a market for them by holding a kind of reverse auction, buying them from the banks at the lowest prices they'd be willing to sell them for.
