Dave L: obama careening to disaster

esther wrote sth similiar on atrios: it doesnt help that u subsidize millions of bad assets to millions of taxpayers so giving the nefarious back-room deals a million owners and thus names. Shit stays shit even if u strew it. And the dream that it will be fertilizer one day is a little bit too faint for me

Obama Administration Careening Towards Disaster (And Taking the Country With It) -- Dave Lindorff

Six months after the failed Bush administration effort to "rescue" the U.S. financial system, and after two months of failed efforts by his own new administration, at an expense to the American public of several trillion dollars and counting, the Obama Administration is announcing plans to blow another $1 trillion in a massive taxpayer giveaway to investors who will be subsidized in an effort to get them to buy the so-called toxic assets on the books of the nation's biggest banks.

The problem with this plan is that its goal -- getting these zombie banks to start lending again -- is not going to work. It doesn't matter how good the balance sheets of the banks are. Good companies, and even individuals and families with good credit, are simply not borrowing. As I wrote last month in an article titled "Follow the Money" in the magazine Treasury and Risk, the problem isn't that banks are too weak to lend (though the zombie banks certainly are), it's that the strong banks don't want to throw money at bad borrowers.