By Matthew Rothschild on March 24, 2009

Tim Geithner’s at it again, doing somersaults, with hundreds of billions of federal money flying out of his pockets in the process, all to distract us from the more sensible course of action, which is to nationalize the insolvent banks.

Instead, he wants to scrub their assets clean by having the government and some private speculators buy up their bad bets.

Geithner calls it the Public Private Partnership Investment Program, and if he were playing scrabble, he’d be all out of Ps.

But don’t be confused. The public is taking the biggest risk, whereas the private speculators, for a tiny investment, can gain quite a lot.

Here’s the deal. Say a bank has a bad mortgage loan that it is holding for $100,000.

The government will set up an auction to determine what the mortgage really is worth.

Say the highest private bid for the mortgage is $84,000.

The government will provide $72,000 in a loan guarantee, and then the private investor would put up only $6,000, which the government would match with its own $6,000 stake.

So the government, you and I, are on the hook for $78,000 whereas the private investor has only $6,000 of skin in the game.

But get this: The private speculator gets to control the management of the asset, and not the government, even though we’re on the hook for about 93% of the risk.

“The Treasury intends to provide 50 percent of the equity capital,” Geithner’s fact sheet says, “but private managers will retain control of asset management subject to rigorous oversight from the FDIC.”

Geithner infamously said, just a few days after he became Treasury Secretary, that “we have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system.”

And he is doing his best at that, which is all the worse for us.

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By Wendell Berry

Manifesto: The Mad Farmer Liberation Front

Love the quick profit, the annual raise,
vacation with pay. Want more 
of everything ready made. Be afraid 
to know your neighbors and to die.
And you will have a window in your head.
Not even your future will be a mystery 
any more. Your mind will be punched in a card 
and shut away in a little drawer.
When they want you to buy something 
they will call you. When they want you
to die for profit they will let you know. 
So, friends, every day do something
that won’t compute. Love the Lord. 
Love the world. Work for nothing. 
Take all that you have and be poor.
Love someone who does not deserve it. 
Denounce the government and embrace 
the flag. Hope to live in that free 
republic for which it stands. 
Give your approval to all you cannot
understand. Praise ignorance, for what man 
has not encountered he has not destroyed.
Ask the questions that have no answers. 
Invest in the millennium. Plant sequoias.
Say that your main crop is the forest
that you did not plant,
that you will not live to harvest.


Say that the leaves are harvested 
when they have rotted into the mold.
Call that profit. Prophesy such returns.
Put your faith in the two inches of humus 
that will build under the trees
every thousand years.
Listen to carrion—put your ear
close, and hear the faint chattering
of the songs that are to come. 
Expect the end of the world. Laugh. 
Laughter is immeasurable. Be joyful
though you have considered all the facts. 
So long as women do not go cheap 
for power, please women more than men.
Ask yourself: Will this satisfy 
a woman satisfied to bear a child?
Will this disturb the sleep 
of a woman near to giving birth? 
Go with your love to the fields.
Lie easy in the shade. Rest your head 
in her lap. Swear allegiance 
to what is nighest your thoughts.
As soon as the generals and the politicos 
can predict the motions of your mind, 
lose it. Leave it as a sign 
to mark the false trail, the way 
you didn’t go. Be like the fox 
who makes more tracks than necessary, 
some in the wrong direction.
Practice resurrection.

Wendell Berry is a poet, farmer, and environmentalist in Kentucky. This poem, first published in 1973, is reprinted by permission of the author and appears in his “New Collected Poems” (Counterpoint).

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