With all that money, how will they get any work done?
I’m sure they’ll blow through it pretty fast.
Here’s some other things Robert Johnson has said…
(Source: Bill Moyers Journal; Published February 27, 2009)
On Friday, February 27, responding to continuing troubles at Citigroup, the Obama administration unveiled a complex stock transaction that would increase the nation’s stake in the failed bank to 38%. According to experts, by purposely avoiding a more than 50% ownership stake in the bank, the Obama administration remains consistent with its publicly stated opposition to nationalizing major banks. The move increases the risk to taxpayers, but also potential reward, should the bank turn around and become profitable.
Robert Johnson, former managing director of Soros Fund Management and an expert in emerging markets, believes the government’s approach — which he calls “drip intravenous capital injection” — wastes taxpayer money and won’t solve the financial crisis. The government’s approach, Johnson argues, is too cautious. Recent developments in Central Europe only reinforce that the world faces a possible economic collapse, Johnson told Bill Moyers on the JOURNAL, in which “the architecture of the integrated world would be shattered.”
Johnson calls for more drastic intervention, but thinks nationalization is the wrong word, “People talk about nationalization. I just call it restructuring. Restructuring is a part of capitalism. That’s how the airlines get restructured when they go through bankruptcy. Or you might have to deal with the auto industry, how you deal with venture capital projects. Do the same thing with the banks.” Johnson explained on BILL MOYERS JOURNAL how a restructuring would work:
I would ask for letters of resignation from the top executives of all the major banks […] You might not honor all those letters, but you’d have them. I would then say, “The stock is worth zero. The balance sheet is too far negative to continue risking the taxpayer’s money.” The examiners, somewhat like FDR did in the bank holiday, would examine the depth of the hole in those balance sheets.
Fill that hole with money, taxpayer’s money, to recapitalize. Send them back out into the marketplace where people know they’re wholly capitalized. And the last thing I would do is I would separate the toxic assets from the bank that you put back in the marketplace.
So everybody knew the resulting creature was sound and confidence could rebuild. Inner bank credit could start to flow again, because they aren’t afraid of each other.
(So seizing private businesses is now the new Capitalism? What more warped terminology and definitions are we in store for?)