It dents my American pride to admit that a corrupt crony capitalist state like the PRC shows superior leadership and vision on the green retooling of their automotive industry.  Talk about a lost opportunity!  Instead of using the economic meltdown to recast Detroit as I suggested back in November, the Dems have chosen to throw a bunch of money into the bottomless pit of the Big Three – Obama, like a plastic-suit wearing auto dealer,  is even promising to warranty your next GM purchase!  WTF?!?

In retrospect we should have just pulled the plug last fall, and put those billions into Tesla.

While every talking head from Capitol Hill to the late night talk show hosts are focussed on how the corruptly crafted and rushed-through bailout legislation led to the infamous AIG executive incompetence bonuses, the real problem is far more insidious – nothing precludes the TARP recipient firms from using our cash to lobby for favorable legislation – which they have apparently taken to doing with gusto.

I’ve never really bought the argument that corporate lobbying is a form of ‘free speech.’  However, getting that banned is a change I doubt I’ll see in my lifetime.  Still, even the stupidest Federal Judge should be able to see how dangerous it is to allow a private firm to ‘recycle’ tax dollars into lobbying efforts to craft favorable legislation for the recipient.    It’s the type of feedback loop that distorts the market and creates institutional ‘winners and losers.’

• In any governmental bailout of a private firm, we need to insist on the following basic principles:
• The government holds an initial majority stake in the firm
• The goals of the investment and required restructuring and changes are clearly defined and milestones established
• The public stake is reduced in step with the achievement of the milestones
• The firm is barred from any and all political lobbying efforts while the government investment remains.

For the period of time in which the government is a large stakeholder in a private firm, the organization becomes, to some extent, a quasi-governmental organization.  It would be like having the US Post Office spend hundreds of thousands of dollars to lobby Congress to expand their budget!!

Ron points out he tried to amend the Wall Street Con Artist bailout plan to cap executive bonuses, but his provision was stripped out.   He snipes at Obama a bit over the bungling of the Bailout II (which did happen on Obama’s watch), but I think the problem is still Harry Reid, the wrong man for the Senate Majority Leader position.

Ron and Senator Snowe are trying to reintroduce the provision as standalone legislation:

“… he and Snowe have a remedy: they are reintroducing their stimulus provision as a stand-alone bill, only they are getting even stricter with bailed-out institutions. Instead of capping bonuses at $100,000, they are lowering the level to $25,000. The law would cover all recipients of taxpayer TARP money, as well as those firms — like AIG — which have received money outside of the Troubled Asset Relief Program. And it would deal with bonuses issued in 2008. If a company refuses to give up the bonuses, the amount that exceeded $25,000 would be taxed at 35 percent.

“They are either going to have to pay it back or they are going to be taxed,” said the Senator. “And I think that is going to be pretty hard when they are already getting taxpayer money.”

Good luck Senator Wyden!

The New York Times reports tonight, although without any proper attribution to Lewis Carroll:

U.S. Bank Bailout to Rely in Part on Private Money

Wall Street helped produce the global financial and economic crisis. Now, as the Obama administration prepares to unveil a revised bailout plan for the banking system, policy makers hope Wall Street can be part of the solution.

Administration officials said the plan, to be announced Tuesday, was likely to depend in part on the willingness of private investors other than banks — like hedge funds, private equity funds and perhaps even insurance companies — to buy the contaminating assets that wiped out the capital of many banks.

The officials say they are counting on the profit motive to create a market for those assets. The government would guarantee a floor value, officials say, as a way to overcome investors’ reluctance to buy them.

Details of the new plan, which were still being worked out during the weekend, are sketchy. And they are likely to remain so even after Treasury Secretary Timothy F. Geithner announces the plan on Tuesday.

Apparently, those reports of Obama continuing Bush’s “faith-based” initiatives are barely scratching the surface…

Guest post from Spy Buddy:

Well folks get ready for a prolonged recession-the Senate Finance Committee cleared the nomination of Timothy Geithner as treasury secretary.  Is this the best Obama can do? In fact, Geithner could have been a prime candidate for a Bush appointment due to his incompetence or corruption.

First, Geithner didn’t pay his 2001 and 2002 taxes until he was nominated-CNBC has reported the IRS waived Geithner fines, what you or I would have had to pay.  Obama, and other Geithner apologists, say this was an oversight.  Lets see, not paying your taxes for four years in a row is an oversight?  He either thinks he is above the law or he’s just incompetent.

A second reason, and a more important, Geithner should not be confirmed is due to his previous position as president of the Federal Reserve Bank of New York.  There he worked closely with Henry Paulson on several projects, bailing out AIG and TARP- is this an oversight, plain incompetence or corruption? I don’t need to talk about AIG since everyone remembers how AIG executives partied on taxpayer dollars in California. Remember the purpose of TARP was to help provide liquidity for banks so they could lend money to people who were refinancing or lending to small businesses etc. So under this guise, Paulson and gang distributed funds with no attention to ensuring that banks would use it to increase lending.  This is one of the biggest rip offs of public funds since the no bid contracts that the Cheney/Bush administration gave away to their buddies.

Geithner is one of many available bankers and/or economists available to treasury secretary—believe me there is a glut in the market, just check out any street corner in NYC.  Lets get one who can pass the character test and one who pays taxes as well as one who is competent.

Amen to that!  Thanks, Spy Buddy!

*Update* Geithner Says China Is Manipulating Its Currency – no shit, Sherlock!  Let’s see what you plan to do about it.