Tim Geithner is unveiling a public-private partnership to try to deal with the toxic assets still on the books of the nation’s banks. One wonders how a private component will change the central dilemma that has hobbled officials: how to price those assets.

But the administration and the financial hooligans in Congress made this entire enterprise a whole lot harder. The New York Times reports:

The plan relies on private investors to team up with the government to relieve banks of assets tied to loans and mortgage-linked securities of unknown value. There have been virtually no buyers of these assets because of their uncertain risk.
As part of the program, the government plans to offer subsidies, in the form of low-interest loans, to coax private funds to form partnerships with the government to buy troubled assets from banks.
But some executives at private equity firms and hedge funds, who were briefed on the plan Sunday afternoon, are anxious about the recent uproar over millions of dollars in bonus payments made to executives of the American International Group.
Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits on the firms, according to people briefed on the conversations. The executives also expressed worries about whether disclosure and governance rules could be added retroactively to the program by Congress, these people said.

Honestly, wouldn’t you be stark raving mad to go into business these days with the investment firm of  Geithner, Rangel, Reid & Pelosi? Let’s say you’re the CEO of a hedge fund or another financial institution. You’ve watched AIG executives cowering in their homes as the mobs descend. You know that if you accept aid from the government every corporate expenditure and salary will now be fodder for the populist mob in Congress. You are expected to undertake all of that, plus the risk that the assets you are acquiring are of unknown value, to help out the Obama administration? It’s hard to imagine what CEO would do that.

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