How To Create Bailouts Forever

Conn Carroll / April 13, 2010

Treasury Secretary Timothy Geithner stumps for Sen. Chris Dodd’s (D-CT) finance reform bill in today’s Washington Post:

As the Senate bill moves to the floor, we must all fight loopholes that would weaken it and push to make sure the government has real authority to help end the problem of “too big to fail.”
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Crucially, if a major firm does mismanage itself into failure, the Senate bill gives the government the authority to wind down the firm with no exposure to the taxpayer. No more bailouts.

Excuse us if we don’t take the Secretary of Wall Street Bailouts’ word on this. To the contrary, what the Dodd bill actually does is create a new $50 billion fund to be used in “emergencies” for restructuring firms deemed too close to bankruptcy. And who gets to decide when there is an emergency and which firms are too close to bankruptcy?  You guessed it: Treasury Secretary Timothy Geithner. The Dodd bill is thus nothing less a permanent extension of Secretary Geithner’s TARP powers. (more…)