A coup?

Nobel Laureate Krugman Slams Geithner Bailout Plan

Nobel-prize winning economist Paul Krugman said in remarks published on Monday that the latest U.S. Treasury bailout program is nearly certain to fail, triggering a sense of personal despair.

U.S. Treasury Secretary Timothy Geithner on Monday unveiled a plan aimed at persuading private investors to help rid banks up to $1 trillion in toxic assets that that are seen as a roadblock to economic recovery.

"This is more than disappointing," Krugman wrote in The New York Times. ""In fact it fills me with a sense of despair."

"The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt," the Princeton University economist said, citing weekend reports outlining the plan.

"This isn't really about letting markets work. It's just an indirect, disguised way to subsidize purchases of bad assets," he added.

This adds to the merit of Matt Taibbi's Rolling Stone piece called The Big Takeover

People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

Krugman is correct: one-way bet!