Sunday, March 15, 2009

Goolsbee and Ghoulish Corporatism

Private money will join hundreds of billions in taxpayer funds to help flagging U.S. banks, said Austan Goolsbee, economic adviser to President Obama. Uncle Sam will provide $1 trillion in low interest loans, which can be leveraged two to three times. The government may provide guarantees on toxic assets purchased on the cheap by private firms.

How much will they pay? The Carlyle Group can buy back affiliate debt for 23 cents on the dollar and postpone taxes for four or five years. They'll likely get toxic instruments at deep discounts, using taxpayer financing.

Mr. Goolsbee commented on President Obama's health care reform. Obama is open to taxing employer provided health insurance benefits. This was a George W. Bush strategy. If the employer loses deductibility and the employee retains it, expect a huge dump onto the worker.

The U.S. Chamber of Commerce could finally rid their members of that pesky health insurance benefit. President Obama met with the Business Roundtable last week. They clearly state the unfair burden of health insurance on American companies trying to compete in a global economy.

Corporafornication remains firmly in play. A.I.G.'s $165 million in bonuses for dragging the firm into a $170 billion black hole proves it.