Our masters in Congress are running around in ever tightening circles, bewildered by the disaster brought on by a Republican philosophy of non-regulation on the one hand, and Democratic inaction on the other.
Well, never you mind. After 48 hours of the deepest thought Washington’s financial wizards have done an end run around Congress and come up with a plan to solve the last financial crisis…a version of the Resolution Trust Corporation.
Hang on to your hats, gang, this ain’t your father’s RTC. Back in the day the RTC simply took over the properties of the failed Savings and Loan banks. That stuff had real value… land and buildings. This time around the suggestion is that we save Wall Street by actually buying all the phony paper it holds. (Bargain price half a trillion rapidly depreciating dollars.)
Two problems: No one knows exactly what that paper is worth, and there seems to be no notion of what to do with it once we own it.
Maybe we could use it to paper the National Outhouse.