Treasury Secretary Henry Paulson announced yesterday that the original bailout plan -- to use $700 billion in taxpayer money to buy troubled mortgage-backed securities -- has been changed. Now, he says, the government should buy more stock in banks and other, non-bank lenders. Among those non-bank lenders? Credit card giant American Express.
This just strikes me as wrong, and I talk about why over at The 36-Hour Day:
Along with regulatory mistakes that made a monster out of the financial industry and some crazily complex securities, one of the big reasons our economy is tanking right now is that, for years, Americans have been living way beyond their means — buying homes they can’t afford using subprime mortgages, for example. Giving taxpayer money to a company that’s suffering because taxpayers aren’t using it to rack up more debt doesn’t make sense. ... [More]
So, if the government gives American Express and Capital One some bailout money to keep them afloat, what's next? High-end department stores asking the government for help because people aren't buying as many designer duds? Weigh in (or sound off) at Work It, Mom!