Finally, A Plan...But Too Late?

Finally, the Obama administration is taking measures to repair the issues that are at the heart of our economic problems. This comes under the category of better late than never. The heart of the economic malaise we find ourselves in has always been those so called “toxic” assets, and their attendant valuation by a flawed mark to market rule. It caused a paper loss for the banks and a credit freeze when the banks were forced to stop lending because of minimum capital requirements. Just so you know, cash flows into banks have never been higher, and absent the toxic asset, banks would be making more money now than any previous time in history. They are sitting on tons of cash, but can’t loan it because of fear of further bond markdowns.

What is so irksome, and tragic for our country, is that the primary problem was known in September. The original TARP request for funds was to be used to fix the bond problems…but was used by the Bush administration for amything but after it got the money, including bailout money for General Motors and Chrysler. As the bond values continued to deteriorate, the financial crisis grew worse as home and car sales plunged. It grew in geometric proportions. The Bush administration excuse: we didn’t know how to value the bonds.

Obama, knowing a good crisis when he sees one, decided to use the economic panic to push through a whole slew of social agenda issues which had nothing to do with the problem at hand…and the situation continued to deteriorate. Only AFTER Obama got his out of control “stimulus” social engineering spending package passed, did he finally move to address the primary issue. The stock market is a consensus on the future of the American economy. The recovery of the market began when Tim Geithner finally released his bank recovery plan a few days ago. In addition, Congress is finally reviewing the use of the mark to market rule, which has destroyed our financial institutions.

And swimming around this mess in both the Bush and Obama administrations is a core of financial geniuses, centered around Tim Geithner, who’s reason for the delay in doing this is open to conjecture. You can’t blame a “change in administration” for the delay. There is no difference. It’s the same thing.

The Geithner plan is a good one, but only has a chance at working now. Had it been implemented several months ago, it would have succeeded. The continually growing economic collapse and resulting political cesspool have greatly diminished its prospects. It is too embroiled in the disgusting and shameful behavior of Congress as it hammered our publicly owned company, AIG, for honoring contractual obligations. It is too embroiled in Obama’s bankrupting budget putting this country in a debt position of trillions of dollars from which there can be no recovery.

I am glad that the surgeon is finally going in to repair the heart. I fear that it may be to late to save the patient.