UPDATE: Brad DeLong notes that there is no requirement, under the bailout bill, for halfway measures and delays:
Every other country that is in this business is nationalizing the banks and injecting capital into them. Only the United States is operating on the asset side along. It’s unlikely to work, and Neel is now responsible.
Time to shift the focus of the TARP: it shouldn’t be buying up assets, it should be injecting capital and taking equity instead–which it can do, the way that Dodd and Frank have written it. But it probably won’t do until Paulson is replaced.
The rest of this post can now be read as an explanation of why that last sentence is true.
The book is being written:
- Appoint a crony you brought with you to Treasury to run the program. Refer to him as “a former executive” in the press release because it sounds More Authoritative*:
[Neel] Kashkari, a former executive at Goldman Sachs, is the assistant Treasury secretary for International Economics and Development. He joined Treasury in July 2006 and worked on several of Treasury’s initiatives in response to the housing crisis – including the formation of the mortgage industry alliance Hope Now.
- Admit that you’re going to be picking your friends for all the other jobs as well, while trying to make it sound as if it were a virtue forced upon you, not something for which you have been preparing** for months:
The Treasury on Monday also released its guidelines for how it would hire firms to manage asset purchases.
It cited the need to begin the program urgently. Asset managers and other private-sector agents involved in running it may be hired “through other than full and open competition,” the Treasury said in a statement.
The department will post help wanted notices on its Web site and applicants will be reviewed in a two-stage process after they’ve expressed interest.
Stage 1: Do I owe him a favor, or will he owe me one? If not, no.
Stage 2: Will he find me a job on 21 January 2009? If not, no.
Further chapters as the details expand.
*He was a VP at Goldman, which is technically “executive-level,” but not exactly close to C-level.
**I was going to say “should have been preparing,” since the recession is now four quarters old, until I realised that Paulson has been preparing—for the coming kleptocracy.