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From The Ed Schultz Show, Rep. Peter DeFazio (D-OR) says President Obama is not being served well by his economic advisors and that there is a growing consensus from the Congressional Progressive Caucus that the president needs to dump Tim Geithner and Larry Summers. DeFazio added that "We may have to sacrifice just two more jobs to get millions back for Americans."

Schultz: What kind of progress can be made to make sure that TARP goes where it's really going to stimulate the economy--small business and infrastructure?

DeFazio: Well, that's our money. It was borrowed in the name of the American people. It was borrowed to bail out Wall Street which has worked famously for Goldman Sachs and others. You know, we think it is time, maybe, that we turn our focus to Main Street, we reclaim the unspent funds, we reclaim some of the funds that are being paid back, which will not be paid back in full, and we use it to put people back to work. Rebuilding America's infrastructure is a tried and true way to put people back to work.

Unfortunately, the President has an adviser from Wall Street, Larry Summers, and a Treasury Secretary from Wall Street, Timmy Geithner, who don't like that idea. They want to keep the TARP money either to continue to bail out Wall Street if there are future problems or maybe to...

Schultz: So Geithner does not want to give the money to small business--the TARP money?

DeFazio: No. They're saying they've got to keep the money. There may be more needs on Wall Street or maybe they should use it to pay down the deficit. That's absurd. We borrowed the money. How do you pay down the deficit...

Shultz: Should he stay in his job Congressman?

DeFazio: No.

Schultz: You think he should be gone as Treasury Secretary?

DeFazio: I do especially if you look back at the AIG scandal and Goldman and others who got their bets paid off in full--instead of saying " Well you bet, you lost"--they got paid back in full with taxpayer money through AIG. We channeled the money through them. Geithner would not answer my question when I said, 'Were those naked credit default swaps by Goldman or were they a counter-party?' He would not answer that question." I think they were naked credit default swaps, they were bets. They should not have gotten their money back.

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Michele Bachmann was on Glenn Beck's show yesterday -- with Judge Andrew Napolitano sitting in for Beck, who came down with appendicitis after his candidate, Doug Hoffmann, lost in the NY-23 race -- plumping her big Tea Party protest of the House health-care reform bill today on Capitol Hill -- which she calls "Super Bowl of Freedom".

According to ThinkProgress, Bachmann is calling on protesters to “scare” members of Congress into killing health-care reform. “Republican organizers are planning for activists to go into the House office buildings and the U.S. Capitol and confront members directly.”

You have to be a little concerned about the kinds of nutcases she's calling upon to visit their Congresscritters. After all, Bachmann herself is a promoter of far-flung "constitutionalist" conspiracy theories about replacing the American currency, youth re-education camps and Obama-ordered "concentration camps." Napolitano opened the segment with a clip of Bachmann grilling Tim Geithner with her otherworldly questions about the "constitutionality" of the stimulus package.

So of course, they couldn't help but indulge in a fresh round of paranoia about security for today's 'Tea Party':

Napolitano: I have to give you a little bit of a warning. I have a friend in the American intelligence community who lives and works around Washington, D.C., who told me: 'Watch out for Mrs. Pelosi making the security requirements almost impossible to get to this rally.' You guys have to watch out for that, that she doesn't do something to make it very difficult for the folks to come to this gathering at noon tomorrow.

Bachmann: Well, she controls the Capitol. She's a very powerful individual. And she controls ingress and egress, and so, I think it would be a big mistake for Speaker Pelosi to prevent the American people from coming to their House. This is their House, after all. This is why we need to make this emergency 'House Call' on Congress tomorrow.

One can only imagine some of these doofus teabaggers getting lost on the Metro and then blaming Nancy Pelosi for it.

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Amazing, how concerned bobbleheads become about the deficit right after the Republican administration that created it has left the scene of the crime. As people like Paul Krugman keep reminding us, there are obvious economic reasons the deficit cannot be the priority during a major recession. But those facts seem to elude David Gregory during this NBC News’ “Meet the Press” interview with Tim Geithner:

DAVID GREGORY: Let me talk about the deficit and the debt. These are alarming numbers. You've said they are. Let's look at the deficit-- since inauguration day. $1.2 trillion, now $1.4 trillion. It's up 17 percent. The overall debt, inauguration day, $10.6 trillion, now, $11.9 trillion. What's it gonna be a year from now?

TIMOTHY GEITHNER: Well, it's gonna have to come down now. It's-- it's too high. And I think everybody understands this. You know, we got these two central imperatives. Restore growth, create jobs. But make sure people understand we're gonna have to bring those fiscal deficits down as growth recovers. First growth, though. Without growth, you can't fix those long term fiscal problems. But you're not gonna have a recovery that's gonna be strong enough unless people are confident we're gonna have the will to go back to living within our means.

DAVID GREGORY: How do you bring it down, though? Do taxes have to go up?

TIMOTHY GEITHNER: Well, we're gonna have to do-- we're gonna have to make some hard choices. But we're not really at the point yet, David, where we're gonna know what's gonna be the best path forward. The President's very committed to bringing down these deficits. He's very committed to doing so in a way that's not gonna add to the burden of people-- people making less than $250,000 a year.

DAVID GREGORY: I mean, I think a lot of people - I think its fair to say - what are hard choices? I mean, what hard choices have been made so far? Are you gonna raise taxes?

TIMOTHY GEITHNER: We're gonna have to bring our resources and our expenditures more into balance.

DAVID GREGORY: So, it's possible.

TIMOTHY GEITHNER: Well-- again, the President's committed to make sure we get this economy back on track. We'll bring down deficits over time. And--

DAVID GREGORY: But Mr. Secretary you talked about hard choices. So, why can't you give a straight answer as to whether taxes have to come up, when you have a deficit this big?

TIMOTHY GEITHNER: Because David, right now we're focused on getting growth back on track. Okay? And we're not at the point yet where we have to decide exactly what it's gonna take. And I just want to say this very clearly. He was committed in the campaign to make-- he said in the campaign. And he is committed to make sure we do this in a way that is not gonna add to the burden on people making less than $250,000 a year. Now, it's gonna be hard to do that. But he's committed to doing that. And we can do that.

DAVID GREGORY: You can do it. But it's still a chance that you'd have to raise taxes and go back on that, if you've got a debt this big?

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Frontline Oct. 20, 2009. The Warning:

In the midst of the 1990's bull market, one lone regulator warned about derivatives' dangers--and overnight became the enemy of some of the most powerful people in Washington.

You can watch the entire program on line here as well as additional invertiews with Brooksley Born, Gary Gensler, Michael Greenberger, Arthur Levitt and Joseph Stiglitz.

From Frontline's interview with Brooksley Born:

Q: What's the message that you're trying to spread now in the ashes of what happened in 2008 and '09?

BORN: I think we have to close the regulatory gap. ... We cannot afford as a society to go forward with an enormous unregulated market that poses this kind of danger because it’ll happen again if we don't take the appropriate steps. ... We need to take a lesson from the existing futures markets where exchange trading has been safe. As much as possible of the over-the-counter derivatives market should be traded on a regulated derivatives exchange. The transaction should be cleared on a regulated clearinghouse. There should be robust federal regulation of any remaining OTC derivatives market. And personally, I think that remaining market should be limited as much as possible to no more than the customized contracts that are needed for specific businesses to hedge particular business risks. ...

Q: If this moment passes again, the consequences are what from your perspective?

BORN: I think we will have continuing danger from these markets and that we will have repeats of the financial crisis. It may differ in details, but there will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience.

Frontline also put together a video timeline of the events starting in 1987-today.

I highly recommend watching the entire hour at PBS's site, but here's one more portion I wanted to share here.

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From MSNBC's Morning Meeting Oct. 16, 2009. Dylan Ratigan explains how Goldman Sachs managed to make $3 billion in three months investing our tax dollars sent to keep them afloat with no strings attached.

For more you can read his entry at the Huffington Post Goldman Sachs' Black Magic, Here's How They Did It.

Goldman at the apex of the crisis is delivered this money -- which they then use to borrow against at $20 or $30 for every $1. Which at 30x equals $2.1 trillion in available capital.

As one of the only banks in the world with money at the time, Goldman Sachs was able to buy billions in distressed assets around the world at record low prices -- only to watch $23.7 trillion in US taxpayer money be deployed during the past year to re-inflate the asset's values that Goldman had purchased with our tax money.

The question is not why did we bail out the banks.

The question is why did we give the banks billions of our money so they could then buy assets by the trillions with our money and they keep the profits?

The answer is Henry Paulson, former Goldman Sachs CEO who ran the US Treasury, and Tim Geithner, current Treasury Secretary who at the time ran the New York Federal Reserve, willingly delivered Goldman Sachs the $70 Billion -- with no strings attached.

So what can we do?

1. We must demand the return of those investment gains made with America's money - it was stolen from us and we can get it back. Demand Claw Backs - and not from the future but from the past - That is where our money is.
2. We must have an exchange for all credit derivatives -- the current version is riddled with loopholes that let banks avoid transparency by mobbing offshore and prohibiting government regulators from being able to force the use of the exchange by the banks.

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Chris Matthews and Jim Cramer praise President Obama, Ben Bernanke and Tim Geithner for saving us from another Great Depression while failing to note a number of things. One, what caused the financial collapse in the first place that resulted in the need to rescue it. Two, that we still don't know where all of our tax dollars went. And three, that the system is still not safe and as Simon Johnson just pointed out on Bill Moyers Journal, things could worse because the system has not been reformed.

Matthews: Well, I guess the big question I would have Jim is if you had to look say five, ten years from now, looking back to now with the clarity of history, does Barack Obama deserve credit for a) avoiding a second Great Depression as he came into office with a strong stimulus of almost two trillion dollars in fiscal stimulus, huge printing of money, the bailouts etc. and secondly has he really put us on the course to recovery from this recession?

Cramer: Alright, I think it’s a team effort. Chris, first of all Ben Bernanke was late, but really went into high gear and the transition from Bush to Obama was really saved by Bernanke’s actions. Second, Bernanke did a good thing, but also Tim Geithner did a good thing and you could argue well Tim Geithner’s totally Obama’s man. Geithner made everybody feel that the banking system was safe. Once we had the banking system safe we began to have the recovery. So Obama should get a lot of credit for that.

Matthews: Well you know when the politicians wag and the right wing goes after them as they do—that’s the way politics works—they say bailouts, bailouts, bailouts as if there’s something wrong with the guy. They say deficits, deficits, deficits as if there’s something wrong with the guy. But everything I studied on college and grad school was that you’ve got to do those things, both in terms of the sectors of the economy which were in trouble, the financial sectors, the auto industry and you had to do something with regard to the over all economy in terms of printing the money, monetary policy, fiscal policy. The very things he did are things you’re taught you have to do. Am I wrong?

Cramer: No! You’re totally right. I hear those people criticize and I think, did they ever read any history about what this country did wrong between 1929 and 1932? This was exactly—what these pundits are calling for is exactly what created a multi-year depression. No! I mean, Bernanke, Obama, Geithner…they got it right!

Matthews: Well, all you hear from on the right is like Terry Jeffrey’s my pal who sits there like from Human Events on the far right, they come on here as if all you had to do was laissez faire. Step back; let the invisible hand solve the problem. Say’s law is still in effect, everything’s going to clear—they actually say this crap… so loudly they must believe it or else they’re just desperate. But they do believe that doing nothing was the right answer. Just balance the budget.

Cramer: They’re dreamers. Look!

Matthews: Let business solve the problem.

Cramer: Here’s the hand. It wasn’t invisible. It was choking America. We are very lucky that these guys understood history. Now the reason why it’s easy to criticize Obama and why he doesn’t take any credit is we haven’t created any jobs yet Chris.

Matthews: Yeah.

Cramer: And that is bad.

Sadly being humiliated by Jon Stewart was not enough to keep Jim Cramer from ever appearing on my television set again. He was right back on the air pretending it didn't happen. I don't know why anyone would take this guy's advice about anything. Later in the segment he also said this when asked about where we were headed with unemployment.

I think we are at the peak or within .1 [of the peak]. We are not going to breach 10%. I have my neck on the line on that.

Oy.

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David Sirota on CNN's American Morning explaining why the White House throwing Van Jones under the bus was such a terrible idea. They've done nothing but show the right wing that they will cave if they decide to attack a progressive working in the White House.

ROBERTS: The president hired Van Jones to find more green jobs, putting more Americans back to work and helping the environment. Now, Jones is looking for a job himself. He has been under fire for some pointed comments about Republicans and a petition that he signed back in 2004 questioning what the Bush White House knew about 9/11. He has now resigned.

To talk more about that, let's bring in syndicated columnist David Sirota and David Frum, the editor of newmajority.com and former speech writer for the Bush White House.

David Sirota, let's start with you, because you wrote quite a scathing column that appeared on the newleft.org and as well on the huffingtonpost.com, saying you're absolutely outraged by the way the White House handled this.

SIROTA: Van Jones is a national hero for his work on green jobs. He's known as an expert on energy policy, on economic policy. He's somebody who made a mistake, who acknowledged that he made a mistake a long time ago, and he was tossed out by this White House.

And I think what we can learn from what happened is what this White House values and what this White House doesn't value. The White House stuck by Tim Geithner as Tim Geithner was involved, the treasury secretary, in a tax scandal. He's accepted gifts from the banking industry. The White House stood by him.

The White House has stood by other people, like Ben Bernanke, who has really been at the heart of our economic problems. And they're basically putting Van Jones out to pasture because of something Van Jones said was a mistake.

And I think what's going on here is that the White House is listening to the white right wing's political terrorists, people like Glenn Beck, people like conservative activists who have targeted Van Jones because Van Jones is an African-American with a progressive movement background working on behalf of social justice.

That's something, unfortunately, that is apparently, according to the right wing, not allowed in this country.

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The New Yorker has a great profile of Sheila Bair, the populist Republican who's at the helm of the FDIC. (h/t Riverdaughter)

As you may already know, Bair is not well liked by the Wall St. crowd that's running the White House show. (Apparently she has this bizarre idea that her job is to look out for working folk. Crazy talk!) Well, she's very popular with regular people - the administration wouldn't get rid of her, it would make a stink. Instead, they've just neutered her:

These debates entered into the Administration’s discussions about building a new regulatory architecture. In late March, Geithner previewed for Congress some of the key concepts that Treasury wanted. The outline seemed to match the Bair camp’s ideas. [Ladies, has this ever happened to you?] A new authority with the power to take over large financial institutions that posed a systemic risk to the economy was modeled on the F.D.I.C., which, Geithner suggested in his testimony, would be an equal partner with Treasury in resolving such firms if they failed. He seemed to be saying that although he and Bair may have disagreed about how to handle the current crisis, there was much more consensus about how to deal with a future one.

But in the white paper detailing the new legislation, which the Administration released on June 17th, all the new authority to regulate firms that posed systemic risk was vested in the Federal Reserve. During Geithner’s testimony before the Senate, Jim Bunning, of Kentucky, echoing Bair, was incredulous. “It took fourteen years for the Fed to write one regulation on mortgages after we gave it the power to do that,” he said. “What makes you think that the Fed will do better this time around?” In addition, while the March plan said that the “Secretary and the FDIC would decide” how to resolve a failing firm, the new plan said such power should “be vested in Treasury.” Geithner could appoint the F.D.I.C. to do the technical work of cleaning up the firm, but between late March and mid-June — when Bair’s aggressive ideas about how to handle Citigroup leaked to the press — Bair’s agency had been downgraded from Treasury’s equal partner to a sidekick.

The senior Treasury official said that stripping authority from the F.D.I.C. had nothing to do with pressure from the banks. “Making a group decision on something that must be done really quickly is not easy,” he said. “At the end of the day, someone has to have the ability to make a call, and it’s better to have that authority vested in one person.”

When I asked Bair about the plan, she said, “I think it reflected a lot of input from a lot of different agencies, and the private sector, and insurance and consumer groups. It’s a very difficult task to try to balance all the different perspectives and come up with a package, and every compromise is going to have people who are unhappy about various parts of it. So I think it’s a starting point.” I said that she sounded disappointed. “I don’t know if ‘disappointed’ is the right word,” she replied.

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Fareed Zakaria talked to author of Liars Poker, Michael Lewis, about what the future is for Wall Street and the economy, and Lewis is not optomistic due to the revolving door between our government and the financial sector.

ZAKARIA: And we are back with Michael Lewis.

Michael, there are sort of two views on the future of Wall Street. One is, this whole game is over. And sort of, to a certain extent, you've been expressing it a little bit, that, you know, this is a 30-year boom. We're going to look back it the way we did the 1920s, maybe the 1890s.

But there's another view that says there are so many smart people out there, and they are so hungry, and they desperately want to find ways to make money, that you're going to actually see new and interesting ways that these firms will either produce money, or there'll be a whole series of smaller firms -- you know, risk-taking firms like hedge funds on the one side, much more staid banks on the other.

What do you think? What does your gut tell you the future of Wall Street is going to look like?

LEWIS: I think that we are in for another day of reckoning down the road. I just don't know when it is.

I think that they haven't even properly evaluated the institutions. They haven't been honest about what these institutions have on their books. They've had phony stress tests.

So, we're in a kind of, I think, right now, in a period where there's a false sense that it's over, that the crisis is passed. I don't think the crisis is passed.

Now, they haven't all deleveraged. Morgan Stanley did, to its chagrin. But everybody else is still running these huge -- a huge amount of leverage. But that's going to change. I think the general sense that this sort of risk-taking should not take place in a public corporation, especially one that's too big to fail, will express itself in regulation that will prevent it from happening.

But you're right. There are all these smart people. And they're used to making huge sums of money. And it's kind of hard to believe that that will just end.

I don't think it will just end. I think it will find a different expression. I think that what you'll see is hedge funds will become more and more interesting.

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I expect a bit of deja vu, in which Obama tells them he's the only thing between them and the pitchforks:

This afternoon President Obama will tell top executives from 14 credit card companies -- including American Express, Bank of America, Discover, MasterCard and Visa -- that greater consumer protections are coming for their customers, with or without their cooperation.

The House Financial Services Committee on Wednesday passed "The Credit Cardholders' Bill of Rights," a bill from Rep. Carolyn Maloney, D-NY, that would require companies to provide a 45-day notice before any rate increase; prevent the companies from retroactively imposing higher interest rates to existing balances; and ban "universal default," which the companies use to raise interest rates on consumers late in payments to completely different creditors.

Oh yeah, universal default. That's the policy that allows them to jack up your credit card rate because your payment to the phone company was late!

Treasury Secretary Tim Geithner, senior adviser Valerie Jarrett, and National Economic Council director Larry Summers will join the president at the meeting.

An industry source tells ABC News that the executives expect to hear from the White House that "the industry is unpopular right now." The source forecasts that the meeting will be "a carrot-and-stick" deal -- the administration will tell the executives that they need their help in dealing with problems such as high interest rates, but they will emphasize the threat of legislation.

"It will be a come-to-Jesus type of meeting," the source said.

He's also looking into the AIG disbursements to counterparties, which will open a fresh can of worms:

WASHINGTON (CNNMoney.com) -- The top cop tracking the government's $700 billion bailout program said Tuesday that he has opened 20 criminal investigations and six audits into whether tax dollars are being pilfered or wasted.

Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program, released a 250-page report detailing a long list of concerns about government efforts to prop up hundreds of banks, Wall Street firms and auto companies.

Barofsky, whose investigations could lead to criminal charges, told CNNMoney.com in an interview that he wants taxpayers to understand where their money is going. At the same time, he wants to alert officials to weaknesses in TARP that could invite corruption or fraud.

Bug - or feature? Hmmm.

"Our recommendations are forward looking and there are no vulnerabilities that can't be addressed," Barofsky said. "The balance of what we're trying to do is to inform, bring transparency and make appropriate recommendations."

The report reveals that Barofsky is looking into whether bailout decisions were influenced by those who stood to benefit from them and whether companies receiving bailout dollars are adhering to caps on executive pay.

Barofsky's report also makes several recommendations to Treasury Secretary Tim Geithner and other officials charged with implementing the bailout. Among them: Require all TARP recipients to detail how they use bailout dollars and safeguard a new mortgage rescue effort against scams.

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This Week featured Tim Geithner this week, and George Stephanopoulas wasted no time is confronting him with Krugman's "despair" comment on his economic plan. Geithner sidestepped the question but did hint that they'd make sure banks would restructure "when they need to restructure":

STEPHANOPOULOS: [...] You laid out what to do about these legacy toxic assets in the banking system this week. And a lot of people are wondering, will it actually work? The stock market definitely seemed to like it, so did a lot of experts. As you know, the Nobel Prize-winning economist Paul Krugman was not a fan. And I want to show what he wrote this week in The New York Times.

He said when he read this plan, it gave him a sense of despair. And he went on to say: "Financial executives literally bet their banks on the belief that there was no housing bubble and the related belief that unprecedented levels of household debt were no problem. They lost that bet and no amount of financial hocus-pocus, for that is what the Geithner plan amounts to, will change that fact."

Financial hocus-pocus.

GEITHNER: George, this is a piece of a series of initiatives we've put in place to help get the financial system doing what it needs to do, which is to provide the credit necessary for recovery. You know, economies depend on financial systems. They're what is -- provide the oxygen, the blood that economies need to grow.

STEPHANOPOULOS: But he says it's just not going to work, that these banks are insolvent, and that even if you put more capital in them, eventually you're going to have to take them over.

GEITHNER: But I just wanted to -- let's step back for a sec. So this is piece of a broad framework of initiatives we're undertaking to help restore the strength of the financial system. Part of our plan -- a core part of our plan involves making sure banks have enough capital to provide the lending we're going to need to get recovery back on track.

Now banks are going to need -- some banks are going to need some large amounts of assistance, and we're going to make sure that that assistance comes with conditions, designed to make sure they restructure, provide accountability on boards of management, that these institutions emerge cleaner, stronger going forward.

STEPHANOPOULOS: But one of the things you're hearing from the banks is in part because they don't want all of these new restrictions, they may not sell these legacy assets.

GEITHNER: That is a risk. And it's very important that people recognize that. To get out of this, we need banks to take a chance on businesses, to take risk again. We had a long period where banks were taking too much risk. The challenge for us is that they take too little now.

And for us to get through this, we need investors and banks to be willing to take a change again on providing credit to that business that has got a great idea and needs to grow, expand.

STEPHANOPOULOS: Well, one of the other criticisms is that the investors, especially in the plans to buy up these toxic assets, are not taking all that much of a risk. They're going to put up $6 and they're going to get 93 percent from the government. We will share on the upside, yes, but they're protected against huge losses.

GEITHNER: George, let's just step back for a sec. The problem we're facing on our financial system is that we -- banks made a bunch of loans, backed real estate that are now facing losses. And those loans are clogging up the financial system.

They're taking up room that could otherwise be used to provide new credits to a business or a family. Now we have two choices, we can let -- leave that as it is, hope that banks earn their way out of this over time. That would be a mistake. That would leave us with a strong -- with a deeper, longer recession.

We're not prepared to adopt that basic strategy.

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I don't think Tim Geithner is the right person to fix the mess we're in since he's too close to those on Wall Street that caused the problem to begin with, but how ridiculous is George Will in this clip? Even after the giant mess that the "markets" have created with no regulation, Will is still doing his best job of channeling Ronald Reagan's mantra of let the markets take care of themselves and government can't solve our problems because it is the problem. Whether Geithner can fix the mess or not we sure need regulations put back in place and quickly IMO which will be up to the Congress to get passed. Will does his best to conflate Geithner's troubles with government regulation being bad.

Will: This is a complicated society with trillions of decisions made every day driving this. That's why you have markets rather than bureaucrats to allocate wealth and opportunity.

Reich: The markets failed George. Let's be clear about that. The markets failed.

Will: Just you wait till the government gets at it. If you think that this is a failure, just you wait.

Reich: Well it's already failing. Look at, we have the worst economic conditions we have had. We had a market fundamentalist as President. We had market fundamentalism as the guiding economic philosophy and what happened? We got in this mess George.

Will: Sixty two days ago Mr. Geithner was the indispensable man and never mind his little tax problems, he was indispensable. As de Gaulle said---graveyards are full of indispensable men.

Is Will an indispensable man too? Raise your hands. Geithner... bad. Therefore regulation... bad. Free market... good. Bad man trying to mess up free market...very bad.

To listen to Will is like listening to a man who has been living in a cave and totally cut off from society and all forms of communication these last eight years. The financial sector has already melted down and we're hanging on by a thread, but not in Will's alternate reality. Does he really want to live in a society where the free markets rule everything and the government takes care of nothing? Apparently so. I'd like to see him try to live in a place that actually espouses the virtues he holds so dear.

Need a cop to come to your house??..you're on your own and buy more guns. Want some traffic lights working in your neighborhood??...just call in Blackwater. Want to drive on any of the roads in this country??...pay a toll and hope they don't jack up the prices too high. Want your phone to work??...well the phone company decided that your area isn't profitable enough to keep service there so too bad. Want your lights turned on?...well the electric company decided that a big industry was more profitable than you were to provide service to.

Don't you dare let the government interfere in any of those free markets....right George Will? Heaven forbid who knows what might happen if they did.

(John Amato helped with the post)

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I actually hope this isn't as bad a plan as I (and Atrios, and Paul Krugman and numerous other economic bloggers -- Brad DeLong is in a distinct minority here) think it is. I really do, because the alternative is too upsetting to contemplate:

WASHINGTON — The Obama administration formally presented the latest step in its financial rescue package on Monday, an attempt to draw private investors into partnership with a new federal entity that could eventually buy up to $1 trillion in troubled assets that are weighing down the nation’s banks and clogging up the credit markets.

At least partly in anticipation of the program, which has been widely publicized, Asian and European markets were sharply higher. Index futures on Wall Street were also significantly higher.

Initially, a new Public-Private Investment Program will provide financing for $500 billion in purchasing power to buy those troubled or toxic assets — which the government refers to more diplomatically as legacy assets — with the potential of expanding later to as much as $1 trillion, according to a fact sheet issued by the Treasury Department.

At the core of the financing package will be $75 billion to $100 billion in capital from the existing financial bailout known as TARP, the Troubled Assets Relief Program, along with the share provided by private investors, which the government hopes will come to 5 percent or more. By leveraging this program through the Federal Deposit Insurance Corporation and the Federal Reserve, huge amounts of bad loans can be acquired.

The private investors would be subsidized, but could stand to lose their investments, while the taxpayers could share in prospective profits as the assets are eventually sold, the Treasury said. The administration said that it expected participation from pension funds to insurance companies and other long-term investors.

At least Obama's confident in it. For whatever that proves to be worth.

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Mayor Mike Bloomberg told NBC's David Gregory that Secretary Geithner was "absolutely" the right person to head the Treasury. "Tim Geithner is the guy I would want there. He's smart. He is a work-a-holic. He's been there. He's been part of the financial system for a long time. He understands how things work, markets work, how people react," said Bloomberg.

Gregory posed the question to Gov. Arnold Schwarzenegger. "You said you supported Secretary Geithner. You still have confidence in him?" The governor simply answered, "Yes."