Brian, this is your problem. You base all your arguments off this:
“As Geithner said”
Geithner stating things does not make them facts.
What about this option?
How about a government controlled bankruptcy where the bondholders lose everything since that is what you deserve when your bonds are attached to a bankrupt company?
The bank shareholders would lose everything because that is what happens in a bankruptcy.
The current banks would probably emerge from the controlled bankruptcy with new management and boards as we should have no confidence In those people. If new banks needed to form to take their place, there are mechanisms for raising capital through IPOs.
The books would now be cleaner, the right people would have lost their money, and we would have different management. If the gov’t had to kick in extra money to help smooth it out, then so be it.
The same people that are saying this couldn’t have worked, also said the same thing about the car companies going through bankruptcy. They were wrong.
Paulson and company did it their way because it saved the bondholders/shareholders (extremely wealthy people) from losing their money. These people were making the decisions for their benefit at the expense of the other 99.9% of the country. Paulson was one of those rich people. So were his friends. He saved himself and his friends.
Now Geithner has the audacity to spin it like he saved the world and the worst part is that some people are believing him.
Brian, you never addressed the fact that Geithner oversaw the lending that started the meltdown.
