If You Read Only One Thing About the BARF

James Galbraith calls Tim Geithner's latest giveaway to Wall Street the BARF - the Bad Assets Relief Fund. Details remain sketchy about what this will and will not do, but if you read only one thing about it, make sure to read this snippet from the New York Times:

As intended largely by Geithner, the plan stops short of intruding too significantly into bankers' affairs even as they come onto the public dole.

The $500,000 pay cap for executives at companies receiving assistance, for instance, applies only to very senior executives. Some officials argued for caps that applied to every employee at institutions that received taxpayer money.

Abandoning any pretense about limiting the moral hazards at companies that made foolhardy investments, the plan also will not require shareholders of companies receiving significant assistance to lose most or all of their investment.

This snippet should go next to the updated dictionary definition of kleptocracy. And you'll notice that Geithner effectively admits the plan would likely be rejected by the public if it had any sort of say in the matter. How does he admit this? By specifically structuring the plan to spend over $1 trillion without asking Congress for a dime. Knowing that Congress would probably reflect the public's simmering anger at this kleptocracy and therefore reject or reform this plan, Geithner has structured it to draw cash from various governmental agencies like the Federal Reserve that are insulated from congressional - and therefore public - control.

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