Absolutely amazing. Even Bush wouldn't have dared to do this:

Banking chiefs, who have come under sharp criticism for not making more loans even as they have accepted billions of taxpayer dollars to prop themselves up, say it is the markets, not the banks, that are squeezing American borrowers.

The Obama administration hopes to jump-start this crucial machinery by effectively subsidizing the profits of big private investment firms in the bond markets. The Treasury Department and the Federal Reserve plan to spend as much as $1 trillion to provide low-cost loans and guarantees to hedge funds and private equity firms that buy securities backed by consumer and business loans.

The Fed is expected to start the first phase of the program, which will provide $200 billion in loans to investors, in early March.

Yes, you read that right, you don't need to go to the optometrist. Obama believes that global credit markets can be revived by shoveling as much as $1 trillion dollars to hedge funds and private equity firms to effectively subsidize their profits in bond transactions.

Under Bush, Paulson and Bernanke initiated the policy of trying to ignite a recovery by pouring trillions into the banks. As we all know, this policy has failed as the banks predictably hoarded the money, but the failure has not encouraged Obama to abandon it, but, rather, to expand it, by putting even more money directly in the hands of hedge fund and private equity fund managers. Instead of recognizing that the existing system of global finance and credit provision is irreparable, Obama continues to expend unlimited sums to recreate it, and he has already expressed his intention to consider cuts in Social Security and Medicare benefits to pay for it. Truly, he's a disciple of the Chicago School of Economics.

As for the intended recipients of these funds, they are among the most contemptible hypocrites in recent memory. How often have we seen these fund managers lecture us about the virtues of the market and the evils of government intervention as they enriched themselves? How often have we heard them assert that regulations protecting workers, consumers and the environment are horrible inefficiencies that must be relaxed, if not removed, with the most ideal system being one in which the market regulates itself. Now, they are running to get a spot near the front of the line so that they can start receiving their government money. And, did I forget to mention that these fund managers pay a much lower tax rate on their income that nearly all of us??

Labels: Bailout of Finance Capitalists, Barack Obama, Credit Crunch, Global Recession, Neoliberalism, Sub-Proletarianization of America