Quote of the day comes from Neel Kashkari:
Treasury Assistant Secretary Neel Kashkari, who is heading up the government’s implementation of the rescue plan, defended the department’s actions, saying that no one should expect the plan to solve all of the nation’s economic problems. "It’s not a stimulus, it’s not an economic growth plan," Mr. Kashkari told lawmakers. "It’s an economic stabilization plan."
You understand the difference, right? An economic stimulus plan is what happens when the economy is looking shaky and the government spends lots of money in an attempt to stop things getting worse. An economic stabilization plan, on the other hand, is what happens when the economy is looking shaky and the government spends lots of money in an attempt to stop things getting worse — and minimize the number of job losses at Goldman Sachs at the same time.
Incidentally, when it comes to revisionism, the Democrats are just as bad as Paulson and Bernanke:
Lawmakers were especially critical of Treasury Secretary Henry Paulson’s announcement earlier this week that the $700 billion rescue plan likely wouldn’t be used to purchase troubled assets from financial institutions. When conceived during negotiations between Treasury and lawmakers, the plan originally was to have the federal government buy up the assets in order to unfreeze credit markets.
"I think it’s fairly obvious that Congress would have never passed the [rescue plan] had it known how Treasury would marshal the resources it was given," Rep. Dennis Kucinich (D., Ohio) chairman of the subcommittee, said during his opening remarks.
No, Dennis, that’s not obvious at all. As I recall, the main criticism of the TARP was precisely that buying up toxic assets was a silly use of $700 billion, and that it would be much better to just inject that money directly into the banks in the form of preferred equity — which is exactly what Treasury ended up doing. If you’re willing to vote for a vague plan to shore up the financial sector by buying mortgage bonds, you’ll definitely be willing to vote for a much more concrete plan to shore up the financial sector directly.