Geithner’s Plan: It’s Not Transparent and It’s Still a Bailout

Let’s just skip to Robert Reich’s conclusion:

Geithner’s Plan: It’s Not Transparent and It’s Still a Bailout

… In other words, Geithner and Fed Chair Ben Bernanke continue to do pretty much what Hank Paulson and Bernanke did: They hide much of the true costs and risks to taxpayers of repairing the banking system. Those risks and costs should be put on the people who made risky bets on the banks in the first place – namely bank shareholders and creditors. Shareholders of the most troubled banks should be wiped out entirely. Bank creditors- except depositors – should take major hits. And top executives who were responsible should be canned. But Geithner and Bernanke don’t want to take these steps for fear of spooking the Street. They think it’s safer to put the costs and risks on taxpayers — especially in ways they can’t see.

Geithner’s plan is better than the first Wall Street bailout but make no mistake: It’s not transparent, and it’s still a bailout.

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