This business with the government taking non-voting stakes in the big banks is a master stroke of j-j-jenius.
Remember: this is a liquidity problem, not a solvency problem, and that is why they are forcing this money on the banks.
Think about the possibilities...
Pelosi is trying to be too polite with her plan to grease the economy. It takes a real man like Paulson to serve up a a truly epic fucking for America.
Pelosi wants to run the printing presses and sprinkle money over all the people to spend, spend, spend, all the while giggling and twitching her nose and waving her wand like a fairy.
Paulson, on the other hand, is thinking like a pro. Go ahead and run the presses, but give the money to the banks. Now the banks can loan us our money which will allow them to repackage that debt into leveraged instruments. Paulson will have turned Pelosi's $300 billion in $9 trillion dollars. It's us against the future, and the future is more than welcome to try and take our market share away. Bring it on, future!
I think the Paulson plan is so brilliant that you can easily see the other possibilities. Because he cannot reasonably be expected to care about anything other than the well-being of the financial institutions, Pelosi might be able to hit him in his blind spot.
After Hank and Paul finish their print run of dollars, Pelosi can fire up another run to purchase food and clothing for all of us. Why should she do this? Because we all need the same amount of food and clothing, but we all earn different wages. She could order the banks to cut our payroll checks C/O the I.R.S. The I.R.S. could direct 100% of that money into stock market index funds. Stock brokers could be directed to only process Buy orders and the stock market would only go up and up. The only sell orders would be those directed by the government upon an individual reaching the retirement age of 70... or possible 87.
The benefits are endless. By carefully controlling our diets, we would be healthier and could work longer hours. The government could purchase our clothes in far fewer sizes and reap the benefits of bulk purchasing power.
Anyone caught unemployed could be forced to start a business through the International Business Development program run by the banks. This program would use the immense resources of the banks to purchase the vast majority of the world's wheat and rice crops. By selectively reducing the supply of food to weak nations, vast pools of labor could be created which are willing to work for nothing more than a bowl of rice per day. Virtually all polluting industries would locate their plants in these nations.
The term Developing Nations would apply to those nations undergoing the belt-tightening process. The banks would not be allowed to profit from the extra food, and would donate it to our internal food program. They would obviously get a tax break from this.
Banks would be able to take advantage of natural famines and swoop right in with factories, jobs, and bowls of rice. Older, less productive workers in these countries could gradually be allowed to retire by instituting breeding programs to ensure a supply of young and strong workers. Drugs such as amphetamines could also boost productivity.
The government could borrow money from the banks to purchase the goods from these factories and distribute them to the people right here in the USA. In time, demand will be met and people can safely become unemployed in a kind of Don't-Ask-Don't-Tell policy while still having their names appear on the payroll so their checks continue to flow into the market for their retirement.
As we become wealthier, people can take a day off more frequently(wink, wink), and do so at an earlier age to pursue such things as study medicine to supply their own health care. Since old, wrinkled, retiring people won't need all the money they will make in the stock market, a large portion of that money could be taken without their permission to fund self-serve community hospitals, oil exploration, and weapons research.
The possibilities are endless, and it all starts with appropriate use of tax dollars, such as propping up insolvent illiquid banks.
Now I know what Biden means when he says paying taxes is patriotic.