Monday, March 23, 2009

Obama's Economic Team

Stolen from spanking fresh NY Mag cover story. It's a doozy.

"With their budget, they have laid out a vision that, as former Labor secretary Robert Reich puts it, “reverses and repudiates the economic philosophy that has dominated America since 1981.” Obamanomics isn’t merely the end of Reaganomics, in other words. It’s the end of Rubinomics, too."

The plan:

First, the government would create public-private partnerships, in which a handful of hedge funds and private-equity groups, backed with taxpayer dollars and guaranteed against big losses, would buy up the toxic assets from the banks. Once the banks’ balance sheets were cleaned up, the government would inject the necessary capital into those banks to keep them solvent until private investors stepped in to fund the newly healthy banks. At the same time, the government is administering the so-called stress tests to determine which of the nineteen biggest banks are dangerously undercapitalized and will require injections of government dough (in exchange for preferred stock) to stay afloat if the economy worsens.

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