Good day for the New York Times today. Nobel Prize winning economist and President Clinton’s Chairman of the Council of Economic Advisers, Joseph Stiglitz stopped just short of describing the Geithner “public private” partnerships for buying toxic bank assets as exactly what it is – a blatant fraud. It is inevitably going to create huge losses for tax payers to benefit the banks and private investors who play along.
“Treasury hopes to get us out of the mess by replicating the flawed system that the private sector used to bring the world crashing down, with a proposal marked by overleveraging in the public sector, excessive complexity, poor incentives and a lack of transparency.”
“So what is the appeal of a proposal like this? Perhaps it’s the kind of Rube Goldberg device that Wall Street loves — clever, complex and nontransparent, allowing huge transfers of wealth to the financial markets.”
Whole thing at “Obama’s Ersatz Capitalism”.