'Bailout Funds' to 'Allow' Main Street to Invest
Yesterday’s New York Times had this article about the Obama administration’s proposal to have mutual-fund-style “bailout funds” that ordinary mom-and-pop investors can buy into:
U.S. May Enlist Small Investors in Bank Bailout
By GRAHAM BOWLEY and MICHAEL J. de la MERCED | April 8, 2009
During World War I, Americans were exhorted to buy Liberty Bonds to help their soldiers on the front.
Now, it seems, they will be asked to come to the aid of their banks—with the added inducement of possibly making some money for themselves.
As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds.
The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars. But there is another, deeply political motivation as well: to quiet accusations that all of these giant bailouts will benefit only Wall Street plutocrats.
Read the rest of the article.
The fantastic Mike Prokosch responded with this letter to the Times (who knows whether they’ll print it):
To the editor:
The Administration’s schemes to bail out Wall Street range from bad to worse, but the latest is a real disaster: get all of us to invest in the toxic assets the banks are trying to sell. “It is really, really important to allow Main Street in,” said one anonymous bank hack. ALLOW us in? Haven’t they already taken enough of our pension funds, our homes, and our taxes, with the bailout tab at $8 trillion and counting? It is past time to get rid of Tim Geithner, Larry Summers, their toxic plans, and the too-big-to-fail banks, and replace them with efficient, not-for-profit financial service companies that put our money where we want it and then get out of our lives.
Mike Prokosch, Dorchester, Mass.