Some heavy hitters are lining up to bash Tim Geithner’s new bailout plan. Nobel Prize-winning economists Joseph Stiglitz and Paul Krugman, along with James Galbraith are among many sounding the alarm. With a hat tip to the NewsDissector blog, here’s our bailout basher roundup…

Geithner Plan Will Rob US Taxpayers
By Reuters

“‘The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak,’ Nobel Prize-winning economist Joseph Stiglitz said… ‘The Geithner plan is very badly flawed. Quite frankly, this amounts to robbery of the American people. I don’t think it’s going to work because I think there’ll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer.’” [Continue Reading]

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Economist James Galbraith: Geithner’s Plan “Extremely Dangerous,” Geithner, Obama Kowtowing to “Massively Corrupted” Banks
By The Business Insider

Part I: James Galbraith Says Geithner Bank Rescue Plan ‘Is Extremely Dangerous’

Part II: Geithner, Obama Kowtowing to “Massively Corrupted” Banks, Galbraith Says

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“The Zombie Ideas Have Won” - Paul Krugman on $1 Trillion Geithner Plan to Buy Toxic Bank Assets
By Democracy Now

PAUL KRUGMAN: A zombie idea is an idea that you keep on killing, because it’s a bad idea, but it just keeps on coming back. And what this is is we’ve had this idea since Henry Paulson came out with his plan six months ago, the Bush administration, that the real problem is that the market is undervaluing all of these toxic assets, and what we need to do is have taxpayers go in and buy them at a fair price, and that will solve all of our financial problems. And that’s what happened. The Geithner plan is a complicated, disguised variant on the same idea. It’s the zombie that you keep killing, and it just keeps coming back.

AMY GOODMAN: Called “cash for trash”?

PAUL KRUGMAN: Yeah, that’s—that was the phrase that was out there six months ago, which I picked up. And yeah, it’s basically saying that, you know, there’s nothing really fundamentally wrong with our banking system; there’s just this crisis of confidence, and so nobody wants to buy, you know, asset-backed securities, nobody wants to buy stuff that’s ultimately backed by home mortgages, and if only we could get people to see that these things are really pretty decent assets, then the banks will be in fine shape. And that’s the trouble. You know, there’s an argument that says maybe they were somewhat underpriced, but to make this the centerpiece of your financial rescue plan is just—well, as I wrote in the column, it leaves me with a feeling of despair. [Continue Reading]

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Financial Policy Despair
By Paul Krugman

“This is more than disappointing. In fact, it fills me with a sense of despair. After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.
And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.

It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.” [Continue Reading]

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Geithner’s Market Rally Spells Taxpayer Ripoff — Nothing for Us to Cheer About
By John Nichols

“Geithner’s bank rescue may have perked up Wall Street but it’s nothing new. They’ve already tried it in Britain and it’s failed.

Yes, it is true: If you offer a trillion dollars to Wall Street, it will perk up… From Wall Street’s perspective: What’s not to like? Hundreds of billions more in federal funds will be used to prop up what even Fox Business News describes as a: ‘Bad Bank Buying Binge.’

The news would be laughable if it was not precisely accurate. ABC News celebrated the run-up by declaring: ‘Dow Soars as Investors Back Bad Asset Plan.’ Bad is good. Toxic is healthy. Geithner is a genius.” [Continue Reading]

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Bend Over and Say, “Uncle Sam”
By Mike Whitney

“Here’s what everyone needs to know: The US government (you) will provide up to 94 percent of the financing (low interest, of course) for dodgy mortgage-backed assets that no one in their right mind would ever buy so that wealthy and politically-connected banksters can scrub up to $1 trillion of red ink from their balance sheets…

There’s no way around the fact that Geithner is a financial industry representative planted in the White House to do Wall Street’s bidding. Institutional bias precludes him from doing his job and operating in the public interest. Thus, the first step in any financial rescue plan must be to remove Geithner, Summers and all the other parasitic Rubin-clones that have infected the present administration and bring in a whole new team. That will prepare the ground for nationalizing the banks and providing debt-relief to the people who need it most, the victims of Wall Street’s Ponzi-credit bubble.” [Continue Reading]

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I Want To Buy Troubled Assets
By Daniel Gross

“Why can’t individual investors get the sweetheart deal Geithner’s plan is offering to hedge funds?

The Geithner plan is designed to benefit professional investors: It provides them with lots of easy credit, limits their losses, and allows them to reap a disproportionate chunk of the benefits if the investments pan out. This will be a boon to outfits such as the Blackstone Group and big hedge funds. But it will not be much of a boon to you, and I don’t mean that in the sense that taxpayers are assuming too much liability. I mean that you, and I, and other small-account holders have no easy way to participate in the plan, and that’s a shame.

The design of the Geithner plan reinforces the notion that there are two sets of rules in the market, one for the really big players (matching investments, generous loans) and another for small investors and homeowners (expensive bailouts and foreclosure).” [Continue Reading]

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Take the Steering Wheel out of Geithner’s Hands
By Arianna Huffington

“Geithner’s Masters of the Universe, the people he still thinks are the ones we should turn to to save the day, are the same people who brought us here. And that is why Geithner either needs to go or keep his job but have his authority stripped and transferred to someone who does not share his Wall Street DNA. Call him or her the “Recovery Czar.” In other words, use any window dressing you want, just take the steering wheel out of Geithner’s hands. It might seem extraordinary to be calling for the resignation or demotion of President Obama’s point man on our financial system.

But let me remind you of a few other things that are extraordinary: the government has spent $2.2 trillion and committed another $7.7 trillion to bolster America’s struggling financial system; $7 trillion of shareholders’ wealth was lost in the stock market in 2008; over 4.2 million jobs have been lost in the last 14 months; 2.3 million houses were foreclosed in 2008, with another 121,756 foreclosures last month alone.” [Continue Reading]

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Obama’s Toxic Advisers
By Robert Scheer

“A great deal is at stake, and we are being asked to support the president’s plans as a matter of trust in a hopeful new leader. But the latest administration plan, announced by Geithner on Monday, seems to be more of the same. We taxpayers are being asked to buy back from the banks the very toxic assets that the members of Obama’s economic team once celebrated as an unmitigated blessing. Only this time, instead of trusting the banks, we will turn over control, but little risk, to hedge funds that are totally unregulated. Here we go again.” [Continue Reading]

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Ok, Geithner is a Wall Street stooge, but what are we going to do? How about we resurrect the Wall Street Scourge… Eliot Spitzer for Treasury Secretary!

Spitzer for Treasury?
By Katrina vanden Heuvel

“Spitzer took on Wall Street’s metastasizing corruption before the meltdown. He defended consumers’ and taxpayers’ rights. He speaks with passion and clarity about what went wrong and what needs to be done to restore integrity to our system. He is chastened by personal scandal, yet untouched by complicity in Wall Street’s public scandals which have obliterated peoples’ savings and devastated our country. Spitzer for Treasury Secretary?” [Continue Reading]

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