Leading economist Laurence J. Kotlikoff is deriding the Obama administration's plan to dispose of "toxic assets," claiming that the "scheme" will do nothing to help the U.S. economy but will help banks profit at taxpayer expense."It's one thing for the U.S. Treasury Department to overpay banks for their toxic assets on the prayer that bank shareholders will do something besides pocket it — something that will help the economy,"
Kotlikoff, a professor of economics at Boston University and a research associate of the National Bureau of Economic Research, writes in The Boston Globe.
"It's another thing to set up a complex leveraged auction scheme to surreptitiously make the transfer.
And it's yet a third thing to set up a scheme that will lead the banks to overbid for their own toxics to garner even larger windfalls and end up with the toxics still in their hands."
Treasury Secretary Timothy Geithner and White House Economic Advisor Lawrence Summers are telling the market that they* will match, dollar-for-dollar, bids to buy a toxic asset...
[Any confusion re: who's money will be used when 'they' match the over-priced bids? Recommended > ]
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