Het Neoliberale Geloof 399

Have Geithner's Zombie Ideas Won? Paul Krugman on the "Cash for Trash" Program
By Amy Goodman, Democracy Now!. Posted March 24, 2009.

Krugman on Geithner's toxic assets program: "It’s the zombie that you keep killing, and it just keeps coming back."

Editor's note: The following interview by Democracy Now!'s Amy Goodman with economist and NY Times columnist Paul Krugman continues AlterNet's coverage on this crucial political moment for the Obama administration and the country on the issue of what to do with the collapse of the financial and banking industries. Yesterday on this topic, AlterNet ran an editorial and articles by Bill Greider, Matt Taibbi and Frank Rich. In the coming days, look for more coverage and articles about activist campaigns sprouting up on this issue.

Amy Goodman: Treasury Secretary Timothy Geithner has unveiled the Obama administration’s plan to finance the purchase of up to $1 trillion in so-called toxic assets from banks and other ailing financial institutions. The plan relies on private investors, namely hedge funds and private equity firms, to team up with the government to relieve banks of assets tied to loans and mortgage-linked securities. There have been virtually no buyers of these assets thus far because of their uncertain risk. As part of the program, the government plans to offer subsidies in the form of low-interest loans to coax private funds to form partnerships with the government to buy troubled assets from banks. This is intended to unclog the balance sheets of banks and allow them to resume normal lending.

Also, the Obama administration this week is expected to announce new proposals for financial regulation, executive pay, accounting standards and other issues, ahead of the G20 summit in London on April 2nd. The new economic proposals come as Congress is to begin debating the administration’s $3.6 trillion budget proposal for next year.

Meanwhile, public outrage over the AIG bonus scandal has further undermined support for Timothy Geithner as Treasury Secretary. AIG is paying out over $165 million in bonuses after receiving a $170 billion taxpayer bailout. Geithner has been criticized in Congress and elsewhere for not doing more to block the AIG bonuses and his overall response to the financial crisis.

In an interview broadcast [Sunday] on 60 Minutes, President Obama expressed strong support for Geithner. He was interviewed by 60 Minutes correspondent Steve Kroft.'
Lees verder: http://www.alternet.org/story/133054/have_geithner%27s_zombie_ideas_won_paul_krugman_on_the_
%22cash_for_trash%22_program/